In 2020, summer residents can expect five new legislative changes that will impact gardening practices. The innovations apply to both individual landowners and the boards of non-profit partnerships and associations—the chairman, accountant, and initiative group.
Water intake licensing
This law has already been dubbed the "water tax." While this year, gardening community administrations were free to obtain a license for wells used for irrigating their dachas, starting in 2020, the registration of title documents will be mandatory. Effective January 1, 2020, all gardening non-profit partnerships will be required to obtain a license for a shared well. To register such a well, a state fee must be paid and the license itself must be purchased, costing between 5,000 and 10,000 rubles, depending on the region. Failure to obtain such documents may result in a fine of up to 1 million rubles.
Private well owners needn't worry—the new legal amendments are unlikely to affect their installations. A permit for deep-well water intake mechanisms is required under the following conditions:
- the volume of daily water produced is more than 100 m33;
- the consumed water is used not only for personal needs;
- the installation affects underground veins or blocks them.
No tax on wells, pools, and man-made ponds is expected in the near future. Therefore, hiding small wells and boreholes is pointless. In most cases, the financial burden of acquiring a license will fall on the shoulders of gardening cooperative members.
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Reduction of the tax rate
Summer residents can also expect some pleasant changes in 2020: the tax rate for common lands in gardening associations (SNTs) will be reduced to 0.3% of the cadastral value. Previously, there was an unfair practice where summer residents paid more for public spaces like roads, driveways, and garden pits than for their own plots.
The area shared by the SNT will be subject to a lower percentage of the cadastral value. This decision was made after the rate for land designated for gardening was also reduced from 1.5% to 0.3%.
Liquidation of the DNT
Starting in 2020, the term "DNT" (dacha non-profit partnership) will be eliminated from the category of suburban cooperatives. Thus, the concept of a "dacha" no longer exists legally. All organizations registered under this status will be given the opportunity to formalize a new form of governance: SNT (Sunny, Non-Profit Partnership) or ONT (Household, Non-Profit Partnership), without incurring any additional fees.
On ONT lands, you can construct sheds and non-permanent structures for storing garden tools, greenhouses, toilets, and small architectural features. Residential buildings—houses for year-round residence with a residence permit and seasonal houses—can be constructed on SNT lands.
Harvest tax
Permits are required to sell produce grown on your own plot. A financial incentive has been established for conscientious gardeners: those who obtain a certificate from the local authority stating that the fruit and vegetable produce was grown on their plot and belongs to them or their family members will not have to pay sales tax on the harvest.
This measure is being introduced to prevent dacha thieves and speculators from selling their produce at provincial and public fairs. It's unclear how the administration will verify that vegetables or fruits were grown on a specific plot.
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Donation of a dacha
Starting in 2020, you can reduce the tax rate on a gifted dacha. This tax deduction will be similar to the personal income tax deduction for apartments and townhouses. If the dacha is transferred as a gift or inherited, and the three-year ownership period does not expire on January 1, 2020, then taxable income can be reduced by the amount of costs incurred in registering the property.
Only employed citizens can count on a personal income tax deduction: working pensioners, individuals who have not reached retirement age and are employed under the Russian Federation Labor Code, whose employer contributes to a pension fund, compulsory medical insurance, or income tax.
In 2020, summer residents will face a number of changes related to the payment of fees, taxes, and tax deductions. Summer cottage associations must choose a new form of government. The administration must obtain a well license if one was not issued in 2019 or earlier.