Top

6. Appropriate Regulation
6.1 Fair Tax Regime
6.2 Professional Services
6.3 Capital Markets
In-Country Assessment Information

 

6. Appropriate Regulation

Goal – A comprehensive regulatory regime that is transparent, efficient, simple in its implementation and that leads to accurate reporting of property values and prudent protection from market risks

back to top

6.1 Fair Tax Regime

 

Core Question: Do market participants feel the overall tax rate is fair and participate in formal transactions? Strong – while property and profit rates are low compared to OECD countries, taxes and fees are still considered high. This leads to tax evasion, which is one feature of a shadow economy.

 

Transfer Tax

6.1.1   What is the total property transfer tax including all duties and payments? 0.2% – Very Strong

 

Overall Tax

6.1.2   What is the overall tax rate on entrepreneurs (as a percentage of profits)?  54.1% – Ranking –  64th out of 185, Strong– Trend ­

Source: Doing Business  2013– Paying Taxes & Registering Property, World Bank
www.doingbusiness.org/data/exploreeconomies/russia

 

Divestment

Survey Question

SQ 24  What is the tax on profits for foreign investors when divesting property? 9% – Very Strong – Foreign investors enjoy numerous tax benefits, which has a favorable effect on the investment climate.

Source: The Chamber of Commerce and Industry of the Saratov Province

back to top

6.2 Professional Services

 

Core Question: Are the professional services necessary for efficient and transparent property markets available and appropriately regulated and supervised? No – Very Weak, the government does not regulate the work of agents and appraisers.

 

Asset Valuers

Survey Questions

SQ 25  Are property valuers licensed and/or certified by the government? No – Very Weak


SQ 26  How effective are mechanisms in place to discipline valuers who engage in misconduct?  None in place – Weak, none in place outside the professional organization.

Civil Society Resource: The Russian Society of Appraisers www.sroroo.ru/

 

Brokers & Agents

Survey Questions

SQ 27  Are real estate brokers and agents licensed and/or certified by the government? No – Very Weak

SQ 28  How effective are mechanisms in place to discipline brokers or agents who engage in misconduct? Weak, none in place outside the professional organization.

Civil Society Resource: Russian Guild of Realtors www.rgr.ru/

 

Mortgage Professionals

Survey Questions

SQ 29  Are mortgage professionals licensed and/or certified by the government? No – Weak, no separate profession outside traditional banks

SQ 30  How effective are mechanisms in place to discipline mortgage professionals who engage in misconduct? Unknown

 

back to top

6.3 Capital Markets

 

Core Question: Are capital markets well-regulated and diversified enough to provide financial resources to private-sector entrepreneurs and innovators? No – Very Weak, the lack of government guarantees for investment in Russia, along with a level of political stability that foreign investors consider insufficient, often leads to capital drain.

 

Capital Flows

6.3.1   What are the business impacts of rules on foreign direct investment? Significant – Very Weak – Ranking  128th   out of  144, Score  3.5 out of 7, the low level of financial transparency in the market is a barrier to growth in investment.

 

Security Exchanges

6.3.2   Is the regulation of securities exchanges transparent, effective and free of influence from government and industry? No – Very Weak, Ranking  114th out of  144; Score  3.4 out of 7

Source: The Global Competitiveness Report  2012-2013, World Economic Forum
www.weforum.org/issues/global-competitiveness

 

Securitization

6.3.3   What is the depth of asset-backed securities, mortgage-backed securities, high-yield bonds and highly leveraged loans? Very Strong – 10th out of 60 countries

Source: Financial Development Report  2012, World Economic Forum

www.weforum.org/issues/global-competitiveness

 

 

back to top

In-Country Assessment Information (as of February 2012)


Taxation

FQ23  What is the level of taxation for small businesses? Are any of those taxes an excessive burden on small businesses? Are any tax discounts provided for small businesses?

Taxation in the Russian Federation, including taxation of real property purchases, is governed by the Tax and Land Codes and by the laws and regulations of constituent entities and local governments. The rates of the property and land taxes have no economic basis, despite the transition to a single tax on real property. A fairer tax system would help prevent schemes to avoid taxation by structuring real estate sales transactions in certain ways and would enhance the quality and safety of services provided by professionals in this field.

 

Professional Services

FQ24 What is the experience of small businesses in dealing with professional property market service providers such as real estate agents, brokers and valuers?    

Modern professional real estate services (agency, appraisal and mortgage services) are available. However, the law provides excessive discretion in appraisal of property.

 

Source: The Chamber of Commerce and Industry of the Saratov Province

 

back to top