In the new year for developers owning land in Moscow, the fee for changing their intended use will increase. The relevant resolution was adopted by the mayor’s office. Now, companies’ costs for this procedure may increase by 50-70%, which will lead to an increase in real estate prices, market participants fear. They are sure that officials are thus trying to at least partially close the deficit in the capital’s budget.
The Moscow authorities have changed the rules for calculating payments for changing the type of their permitted use (VRI) for developers who own land plots , found “Kommersant” in the text of the Mayor’s Decree No. 2226-PP dated December 28, 2021. It follows from this that now payments for them will increase when the purpose of the sites is changed from industrial or administrative-business to residential. The Department of City Property of Moscow did not provide comments.
For the first time, officials have significantly increased payments for changing VRI plots at the end of 2020. But then it affected only sites leased by developers from the city. For them, costs have doubled within the old city limits and eight times in New Moscow (see Kommersant dated November 24, 2020).
change of VRI lands for their owners. It provides a formula with a large set of coefficients, including the cadastral value of the site, whose purpose is changing, the future volume of construction on this site and the cost of it. This suggests that in each specific case, the amount of payments for the change of the VRI site will be flexible.
The innovation will mainly affect developers building in New Moscow, since in this area most of the land is owned , while in the old boundaries of the city, developers rent land from the city, Timur Ryvkin, director of the department of housing and land development at Colliers, notes. Almost 98% of the sites in New Moscow are privately owned, ILM partner Andrey Lukashev confirms. So, GC “A101” and Sezar Group, all sites in New Moscow belong to the right of ownership, Kommersant was told in the companies. prices in new buildings in New Moscow may rise by at least 10%. At the end of 2021, according to Dataflat.ru, the average cost of housing in new buildings in this area reached 190 thousand rubles. for 1 sq. m.
Interviewed by Kommersant, developers are sure that the new rules will lead to an increase in costs when changing VRI plots within the old boundaries of Moscow. Depending on the coefficients that the mayor’s office will apply, the costs of developers for this procedure may increase by 50-70%, says Andrey Basov, vice president of the Development Country. “This will significantly increase construction costs,” agrees Stanislav Frolov, head of the development unit at Inteko Group of Companies. Now the developer will start the project with only calculations, and by the end of the project, the projected amounts in the estimate may change dramatically, says a Kommersant source from among large developers. into the ownership of plots leased from the city. Companies that manage to do this before April 1, 2022 will be able to set off the cost of buying out plots against the fee for changing the type of their permitted use. But taking into account that payments for the change of private land plots are significantly increasing, it will become more profitable for developers to build on leased sites, Stanislav Frolov believes.
However, the new document introduces a number of innovations for tenants. So, the mechanism for calculating rates is changing for them – they will grow as the profitability of the construction project increases. Thus, the mayor’s office wants to indirectly participate in the excess profits of developers, Andrei Lukashev believes. According to CIAN, in 2021, the total revenue of housing developers in Moscow and the Moscow region increased by 42%, to 1.86 trillion rubles. Thus, the net profit of PIK Group in the first half of 2021 increased by 3.9 times, to 69.4 billion rubles, LSR – by 2.2 times, to 5.7 billion rubles, Samolet Group – by 4, 6 times, up to 3.2 billion rubles
In addition, for tenants of urban land, rates will increase if construction is delayed. If earlier in the first year of delay, developers paid an additional 1.5% of the cadastral value of the land, now it is 20%, says Pavel Zhelnovod, managing partner of Nova Consulting.
All innovations with an increase in payments for developers are associated with an attempt by the mayor’s office to reduce the shortage of funds in the budget, another interlocutor of Kommersant is sure. It follows from the draft budget of the capital for 2022 that the deficit this year will be about 372 billion rubles.
Daria Andrianova
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