Land Reform of 2015

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Land Reform of 2015

A new federal law №171- FL dated by 23.06. 2014 (the law) declares significant changes in the Land Code, making providing of state and municipal land to citizens and legal entities much easier. These changes come into force since 01 March, 2015.

What is the purpose of this law and who will all the innovations touch?

The explanatory note to the draft federal law "About Amendments to the Land Code of the Russian federation and some legislative acts of the Russian Federation with regard to improving the procedure of granting land plots owned by the state or municipal property" (further - the explanatory note) of the State Duma Committee on land issues and construction says: "Nowadays normative legal regulation of the procedure of granting land plots, including those allotted for building, is rather contradicting and has many drawbacks and omissions, that gives public authorities and local self-government a possibility for abuse."

Thus , one of the key changes is elimination of corruption component from the procedure of granting land plots, still the main purpose is first of all development of legal regulation of town-planning activity and improvement of business atmosphere in the field of constructing.

To realize the above mentioned purposes legislators set the following tasks:

  • to increase the turnover of land;
  • to simplify maximally the procedure of granting land plots, to make it clear;
  • to reduce the time of providing land plots.

The explanatory note says that "The simplification of the procedure of granting land plots suggested by the law must result in the reduction of budget expenditures at all levels connected with preparation of land plots for sale. The simplification of the procedure of granting land plots will also contribute the development of civil turnover of land and consequently it will cause significant raise of income in the appropriate budgets.

Let's analyze some concrete innovations suggested in the project:

1. According to the existing rules of law one interested in the possibility to own a land plot must:

  • to carry out the formation of the land plot;
  • to provide determination of the permitted use of the land;
  • to acquire the rights to a land plot as one being provided according to the Land Code of the Russian Federation.

Moreover, different normative acts of the Russian Federation (the Town Planning Code of RF, the Land Code of RF, the Forest Code of RF, the Federal Law of RF №66-FL dated by 15.04.1998 "About horticultural, gardening and suburban non-profit association of citizens") demand to prepare a package of documents as a reasons for the formation of a land plot, the list and the content of which is either not established or established vaguely. In makes land development difficult.

The law gives a more distinct definition of the document, on the basis of which the formation of the land plot provided for building is carried out.

2. The current law of the Russian Federation suggests two ways of granting land plots:

  • non-negotiable (with preliminary coordination of the place of the object location);
  • at auctions, contests (without preliminary coordination of the place of the object location).
  • The law will make changes to an existing order, namely it is suggested:
  • to carry out the provision of land plots without auctions for the purpose of building important infrastructure objects, to some categories or citizens for housing, subsidiary farming and in some other cases. According to the changes the maximum time necessary for providing a land plod must be reduced from three years to three months.
  •  to substitute the coordination of the place of the object for the obligatory preparation of documentation concerning the land planning and formation of land plots, which will be carried out by a person interested in getting a land plot, that will exclude the necessity of having numerous coordination.

3. According to the amendments public authorities and local self-government will get a duty to put up land plots for auction (except those reserved for state or municipal needs, with restricted turnover and so on) on the basis of applications from citizens and legal entities. It's necessary to mention, that it is suggested to establish a closed list of cases in which the provision of land plots is refused, also the law suggests to consider the cadastral cost of the land plot as the starting price at the auction.

Also public authorities and local self-government will get a duty to publish information about the existence of spare land plots, suggested for building and other purposes, the facts about which are in the Unified State Register of rights to immovable property and transactions with it and in the State Real Estate Cadastre on the official websites in the information and telecommunications network "Internet".

4. The project includes a possibility for municipalities to control land plots with not delimited state ownership and simultaneous termination of powers of the municipal areas in cases of finishing the development of land use.

5. According to the issues of the law the owner of kiosks, stalls and shops "on wheels" will be released from the duty to enter into lease agreements for the occupied land, the same changes concern the owners of advertising constructions.

6. The changes made also touch upon socially significant problems, such as urbanization, lack of qualified specialists in the regions and localities with small quantity of inhabitants, particularly in accordance with the law:

  • granting land plots for citizens for free use (according to the list of specialties set by the laws of the Russian Federation of subjects) for housing, subsidiary farming is provided. Except it granting land plots for individual, not only commercial, horticulture, gardening, conducting country farming are provided;
  • citizens are given the right to get land plots for individual use without any payment, if these plots have been used for five years in accordance with the allowed regulations. The law of the Russian Federation gives the right to establish lists of municipalities, in which such provision of land spots is possible; this will stimulate migration of people to the areas needing human resources.

Possible negative effects of the approved law:

On the whole there are some positive tendencies in future changes, but to achieve the aims set it is necessary to work out a clear mechanism of implementation of the mentioned norms. This mechanism should eliminate any abuse from the part of public authorities and local self-government.

Even now it's possible to distinguish some problems, which can appear while implementation of norms of the new law:

  • Connection of redemption price and cadastral cost may result not in reduction of the price of land, but in its increase, because cadastral cost is often higher than market price. It is clear from widespread litigations related to the reduction of cadastral cost;
  • Termination of so called "dacha amnesty" makes the question of legalization of unauthorized constructions unsettled and suspended;
  • Exemption from obligatory lease agreements on land under the advertising constructions may lead to vulnerability of the owners of such constructions;
  • Priority of granting land plots to people capable to suggest their integrated development will result in the distribution of land among large entities, but not among the small-scale businessmen and individuals;
  • The size of the lease payments for state-owned land plots and those owned by municipalities is significantly lower than the tax on land owned by individuals. Thus, in order to stimulate individuals to transfer land as property it is necessary to suggest tax incentives except vague possibilities of guaranteed defense of the right to property and a possibility of free use of the land plot. Otherwise ordinary citizens will not use their right to transfer land as property.






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