In 2020, owners of garden plots can expect a number of new changes. Land tax rates are being changed at the legislative level, and incentives are being introduced for gifting a garden plot. Gardeners should be aware of new fines for improper water use and the latest news on dacha registration.
What changes await summer residents in 2020?
On January 1, 2020, the law requiring simplified registration of a plot in a gardening association expires. To obtain a plot of land, an extract from the minutes of a gardening association meeting was sufficient. Following the changes, this simple set of documents must be supplemented with a developed plan for the future building and a boundary plan. This significantly increases the financial burden and the time required to obtain all necessary approvals.
A new garden tax for summer residents, effective 2020, has raised concerns, affecting thousands of private farms across the country. Bill No. 483530-7 amends the Russian Tax Code to include monitoring and taxing income from the sale of summer cottage harvests.
The bill's creation stems from numerous farms that, in an attempt to avoid taxes, operate under the guise of private households. They sell their produce from their gardens, bypassing stores and evading taxes. They often employ hired labor without formally registering the workers.
Law No. 483530-7 will not affect the dachas and gardens of ordinary citizens. It aims to bring entrepreneurs out of the shadows through simplified registration and minimal accounting of expenses and income. Illegal farms can quickly register a patent and begin operating within the legal framework.
Documents required for the sale of crops
A law requiring taxation on the sale of produce grown on a private dacha comes into effect on March 1, 2020. It requires all gardeners wishing to sell fruits and vegetables from their own gardens to obtain a patent and pay taxes on sales to the compulsory health insurance fund and pension contributions.
In reality, the "garden law" has many nuances. It applies to individuals who own large plots of land, covering several hectares. It allows them to avoid registering as a private entrepreneur and instead purchase a temporary permit for a season or year. The following categories of gardeners are exempt from filing documents and paying gardening taxes:
- owners of small summer cottages with a land plot of up to 0.5 hectares;
- not using hired labor.
Certificates certified by the gardening association's administration serve as confirmation. If the plot area exceeds half a hectare, a one-time tax of 13% must be paid upon sale of the harvest.
Calculation of land fees
Among the innovations of 2020 is the establishment of a land tax rate of up to 0.3% of the cadastral value. The law applies to all public or non-commercial plots registered in gardening associations. The reduced rate applies only to summer cottages used for personal farming and not for profit-making.
Tax rates will vary by region. The final amount is approved by municipal authorities. Preferential rates are also regulated by local legislation but must not exceed 0.3%. This new measure applies to garden association plots designated for driveways and parking.
Water tax
Many garden plots use water for their own needs, which they extract from wells in their yards. This reduces the cost of installing water mains and eliminates the need to lay pipes throughout the property. New legislation calls for the introduction of a kind of water tax.
Starting January 1, 2020, all owners who drill a well on their property must obtain a special license. In 2019, obtaining a license was free and optional, and its availability was not verified by environmental authorities. In future tax periods, the fee for obtaining this document will be up to 7,500 rubles.
New conditions for donating a plot of land
In 2019, the Tax Code required all citizens to pay income tax on every type of income received. Residents were required to pay a 13% tax on land donations, while non-residents were required to pay a 30% tax. The cadastral value was used as the basis for the calculation.
Tax was mandatory for the sale of a dacha owned by the recipient for less than three years. Since the new year, tax deductions have been available for such property. The tax amount can be reduced in the following situations:
- If the recipient provides documentary evidence of the expenses associated with the re-registration and receipt of the dacha as a gift.
- Reduce the payment by the amount of personal income tax (PIT) if the recipient was not related to the donor.
Close relatives still don't have to pay taxes on gifted dacha plots. However, they can only sell or re-gift it after three years. Otherwise, they will have to pay 13% of the cadastral value to the budget.
Ways to deal with debtors
The tax amount is determined based on the cadastral value of the property, so it must be calculated in advance. The tax service notifies each taxpayer via letter or mobile phone notification. You can register on the Ministry of Taxes and Duties website and periodically check the information in your personal account.
If payment is refused, tax inspectors collect documents and refer the case to court. After a decision is made, an order for forced collection is sent to the enforcement service at the debtor's place of registration. The land tax amount, plus any additional fines, penalties, and court fees, is withdrawn from the bank account in certain installments.
As a means of enforcement, bailiffs can seize real estate and summer cottages. Often, the defaulter's driving privileges are restricted. Effective methods include travel bans, which prevent the debtor from leaving the country until the debt is paid.
In 2020, changes to the tax code will come into effect. Summer residents are advised to study the new rules for calculating and paying taxes when gifting a garden plot or registering it as their own. This will help avoid penalties and unpleasant situations when registering a well, which could restrict the debtor's travel and work.
Natalia
Cipollino is resting!!!!!!!!!!!!!!!!
Sergey
There is not enough information on calculating the tax for the plot.