Property Tax and Capital Gains Tax

Taxes on Real Estate Ownership

Corporate Property Tax (Russia): maximum rate of 2.2% of cadastral value (for certain objects — cadastral base). Objects: buildings, premises, structures on the company’s balance sheet.

Property Tax for Individuals: rates 0.1–0.3% (residential real estate), up to 2% (commercial, high-value). Tax base — cadastral value minus deductions (20 sq.m for an apartment, 50 sq.m for a house).

Land Tax: 0.3% (agricultural, residential development) or 1.5% (other). Base — cadastral value of the land.

Tax on Income from Property Sale

Minimum holding period: 5 years (3 years for sole residence, inheritance, gifts from close relatives) — after this, personal income tax is not paid.

Calculation when selling before minimum period: Personal income tax 13% of (sale price - purchase price) or property deduction 1 million rubles. If selling for less than cadastral value × 0.7 — the base is not less than cadastral × 0.7 (anti-undervaluation).

UAE: no capital gains tax on real estate and no tax on rental income for individuals. Transfer Fee for transaction — 4% (Dubai Land Department). Property Registration Fee.

Practical Task

An individual bought an apartment in Moscow in 2021 for 8 million rubles. Sells it in 2024 for 12 million rubles (cadastral value — 10 million rubles). This is not the only residence. Calculate the personal income tax payable in two ways and choose the optimal one.