Property tax on buildings with high energy efficiency

Federal Law No. 286-FZ of 30 September 2017 left it to the regions to decide whether to grant property-tax relief for newly commissioned properties that have high energy efficiency, or a high energy-efficiency class.

A CG expert view

From 1 January 2018 the relief provided for in paragraph 21 of Article 381 of the Tax Code applies only if the region has adopted a law to that effect. The Tax Code provides a number of reliefs for organisations in respect of properties that have a high energy-efficiency class, where Russian legislation provides for an energy-efficiency class to be determined for such properties. The reliefs in question are a property-tax relief for newly commissioned properties, for three years from the date the property is registered, and an increased depreciation coefficient of up to two.

Until recently, owners of energy-efficient buildings did use these reliefs, though not without difficulty. The views of the Ministry of Finance shift, however, and may soon lead to a serious collision between the taxpayer and the tax authority.

Letter of the Ministry of Finance of Russia of 3 February 2017: it confirmed that the relief may be applied to newly commissioned items of movable and immovable property, including buildings, that have a high energy-efficiency class, if they have an energy passport.

Letter of the Ministry of Finance of Russia of 29 May 2017: it clarified that the relief may be granted if an energy passport is in place at the moment the property is registered.

Court practice is uneven, although for the most part decisions are given in the taxpayer's favour.

The current body of rules governs how an energy-efficiency class is determined only for apartment buildings. For other property there are no rules for determining an energy-efficiency class. That may lead practice to change, towards refusals of the relief in paragraph 21 of Article 381 of the Tax Code for properties such as shopping centres and business centres,

explains Sergei Pivovarchik.

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