When construction is treated as complete: Law No. 487-FZ

Tomorrow, on 1 March 2025, Federal Law No. 487-FZ of 26 December 2024 comes into force. It amends the Town Planning Code of the Russian Federation and clarifies the moment at which construction of a capital construction project is complete.

The moment at which construction is complete, and the project is commissioned, is now fixed clearly:

A project is treated as complete from the day a permit to commission it is received (or a notice of compliance, in the case of individual housing construction and garden houses). From that date it becomes a fixed asset and is subject to property tax.

What this changes

Previously the tax authorities and owners disputed the moment from which the tax should be charged: from the date the project was in fact ready, or from the date the documents were completed. That uncertainty has now been removed. The tax is charged strictly from the moment the permit to commission the project is received.

What deserves attention

• If your project is commissioned after 1 March 2025, property tax must be charged under the new rules.

• If the permit to commission it was received before that date, the previous procedure applies.

Over 10 years of advising owners of real estate, we have more than once seen the date on which a project was taken into the accounts as a fixed asset become the cause of a dispute with the tax authority. The problem was not only a difference of view between the taxpayer and the inspectorate. It was the absence of clear criteria. Some took the view that the moment of taxation should be the receipt of the permit to commission the project. Others took it to be actual use, for example the letting of premises once the finishing fit-out was complete.

The uncertainty has now been removed. For new projects, taxation is tied to official commissioning. That not only reduces the risk of disputes and of additional assessments, but also makes the tax burden more predictable for business. Sergei Pivovarchik, managing partner of Consul Group, comments.

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