Property tax is probably the most discussed budget payment. And the property tax rate causes constant discussion: individuals and legal entities are dissatisfied with its high size; authorities, on the contrary, are trying to maximize it. What is so special about this tax and how does it differ from its brothers? We will try to understand this issue.
What is the essence of property tax
The property tax rate should apply to all tangible objects that are owned by a particular person. If you strictly follow the definition, then this number must include all real estate, land and vehicles. However, for the last two categories own articles of the Tax Code are defined. This means that they are kept separate records and calculations. Therefore, property tax as a term began to apply exclusively to residential and non-residential buildings, as well as premises inside them. And it is not so important that it will be - a room in a communal apartment, a share in a residential building, a skyscraper or an industrial complex - all these are taxable objects.
It is clear that property can have a different purpose. Entrepreneurs use it to conduct business, citizens exploit it as housing. The property tax rate takes this specificity into account. That is why higher rates are applied to commercial real estate, and they are calculated in a completely different way. In this case, the fact of the operation of the object does not play any role; ownership automatically includes tax assessment.
The Tax Code determines that property tax, or rather, its size, should be established by local authorities. The federal center sets the main directions of calculations, recommends coefficients and sets the maximum tax rate, above which it is impossible to rise. The rest is already in the hands of the regional authorities.
What is the difference between tax for organizations and for citizens
Naturally, legal entities face the most difficulties with this payment. The corporate property tax rate depends on many factors. Among them can be noted the categories of taxpayers, the intended purpose of the property, the types of economic activities and sectors of the economy where it is used, as well as much more. But neither the place of origin of capital, nor the form of ownership affects the rate.
For citizens, relationships in this area are built on several other principles. As with organizations, the tax rate on property of individuals is fully calculated by local authorities. However, the final tax amount is calculated by the tax inspectorate, relieving citizens of this burden. Tax officials receive the rate from the administration of the region, and the value of real estate in square meters from the technical inventory bureau. The rest is a matter of technology.
It is noteworthy that this department is obliged to notify the population of the timing of payment and the amount of tax. Recently, these notifications have been sent much earlier than the appointed date in order to coordinate them in case of any comments in time. A feedback form must be attached to the current notice. You can make corrections in person by visiting the tax office.
It is known from practice that the property tax rate is a constant category, but sometimes the signs accompanying it have to be checked. Most often, errors are associated with the size of the shares in the total property, as well as with the size of the benefits. The latter are established not only by the federal center: local authorities also have the right to introduce their benefits to citizens. They didn’t pass the necessary resolution on time - and this is the inconsistency.