Home » Psychotherapy » Can the cadastral value be higher than the market value? Cadastral and market value of an apartment: what is the difference? What is the difference between the cadastral market value.

Can the cadastral value be higher than the market value? Cadastral and market value of an apartment: what is the difference? What is the difference between the cadastral market value.

Real estate in Russia, as in any other country, is one of the most important and valuable segments of market relations, which is subject to state accounting, control and payment of taxes. Therefore, all issues related to real estate are strictly regulated by Russian legislation. It's the same sale non-residential premises, purchase of land, exchange, apartment rental, inheritance, donation, other actions.

To perform the above actions, you need to know the value of real estate, be it a plot of land, other land, an apartment, a house. The price that the owner has the right to ask for his real estate will depend on this value. Banks also rely on this indicator before applying for a loan, as well as court decisions in disputes about the division of property. Moreover, the most important indicator for the state of the value of real estate (a plot of land, an apartment, a house) is the assessment of tax.

At the same time, it is important to separate two basic concepts in real estate valuation: the value itself - declared as the amount above which the owner cannot sell the object, and the price - expressed in monetary value, which may be equal to or lower than the cost.

The essence of market value

Market value is a concept that is probably familiar to almost everyone. It represents a certain amount, which consists of the assessment of the exchange of real estate. In other words, this is the most likely price in a competitive market that can be given to a specific property, land plot. At the same time, if we are talking about the purchase and sale of an apartment, other real estate, rent, both parties must be as aware as possible about it and act voluntarily in their interests.

Another important feature of the market value is the fact that it is established without taking into account taxes and other financial costs for completing the transaction.

The essence of cadastral value

- a relatively new concept, but it does not at all displace market valuation. This cost is established by conducting an examination (evaluation) by employees of the cadastral registry service in in the prescribed manner. This takes into account the intended purpose of the apartment, house, land, commercial land plot, other real estate, as well as commissioning and area.

In other words, the registered value is a state assessment with the entry of the assessment into the register.

Calculation of the cost of an apartment, non-residential building, land plot, and other real estate is carried out for the purpose of:

determine the tax on the property (land plot);
calculate tax in cases of purchase and sale, exchange, rental of an apartment;
re-register housing or land as inheritance;
arrange property on a mortgage or loan;
determine the price for exchanging equal living space or a plot of land;
re-register property under a gift agreement.

Relationship and difference

Since market and cadastral values have different ratios to each other, the register price is still, in a sense, based on the market price. This is already evidenced by the fact that when calculating the cadastral valuation, average price real estate in the region, and not between everyone. Of course, not in its pure form, but taking into account legislative norms and cadastre rules. Similarly, in addition to demand, the list price is now taken into account in the market valuation.

The difference in these two estimates is that the market price has more general characteristics and strongly depends on demand, and the cadastral system focuses on the pricing policy of each region separately. Therefore, it often happens that the cadastral price may be lower than the market price, rarely higher or equal, and this affects the tax that the owner pays. Often such issues have to be challenged in court.

It can also be noted that the difference between market and cadastral value is based on the influence of demand on the one hand and intended use on the other.

In the cadastre, the intended purpose is a very significant indicator; for example, the price of an agricultural plot of land will be calculated taking into account the income from it.

Real estate valuation

Today, any actions regarding a plot of land, dacha land, apartment, house, non-residential premises, or other real estate are legally impossible without registering it and without calculating the cadastral value. These issues are dealt with by government bodies, namely Rosreestr.

Such an assessment can be carried out once every five years, but not less often. This is due to the fact that the cadastral price, like the market price, does not stand still and is constantly changing, but it should not be much lower than it.

An examination is being carried out
commission of the register authority after the owner submits an application for registration (registration of real estate). If all documents along with the application were submitted correctly and were approved, the property is included in the list, in order of which the cadastral valuation will be carried out. But even after this stage you need to wait until the assessment is approved. Only when the data is entered into a single electronic database of the state real estate register will the owner be given all his legal documents.

Typically, the assessment is carried out within thirty days after submitting the application, and within the next ten days all decisions made on the cadastral value must be approved.

You can find out the cadastral value by address or number online and for free using the widget below.

Despite the fact that this widget is used to order a paid extract from the Unified State Register of Real Estate, before ordering you can find out the cadastral value of the property completely free of charge.

Establishment and inconsistencies

Once the cadastral price is approved and entered into the Rosreestr database, it becomes available to all interested parties.

You can view and check in the future how much it has changed in several ways:

If the cadastral value can be revealed to be lower than the market value (rarely is it higher, it is also equal) or the information is entered incorrectly, differs from what was entered in the passport, the owner does not agree with the calculation of the tax amount, he has the right to submit an application to Rosreestr for revaluation of the apartment , land plot, other real estate.

If after this it was not possible to restore justice, it makes sense to file a lawsuit and challenge the decision of the state registry. The court will determine the final amount of the value of the disputed property.

The difference between the market and cadastral value of an apartment is not always obvious. In practice, there are more often cases when the market value is higher. The opposite situation is less favorable for the owner, as it entails a greater tax burden.

The concept and features of the market value of an apartment

The market value of an apartment is the price set by the owner of the property in accordance with consumer demand and competition.

Features of market value:

It is formed on the basis of the principle of reasonableness;
Set by the owner himself based on similar proposals;
Market conditions influence;
Not permanent;
Used to carry out civil transactions (purchase and sale, pledge, lending, exchange and others).

Factors influencing the market price:

Exchange rate;
Political events, structure and its features;
Seasonality;
Location (district, distance from the center);
Infrastructure;
Type of building;
Worn;
Construction costs;
Number of storeys;
Square;
The quality of the repairs performed;
Arrangement of furniture and appliances.

The concept and features of the cadastral value of an apartment

The cadastral value of an apartment is the value established by special government bodies on the basis of legislation on valuation activities.

Features of cadastral value:

The mass valuation method is used;
Established only by independent cadastral appraisers, to whom the state has assigned the appropriate powers;
The procedure is strictly regulated by law;
Used to calculate the tax burden;
The calculation is based on data previously entered into the real estate cadastre;
It is periodic (revision is carried out once a year or once every 5 years).

Factors influencing the cadastral value of an apartment:

Market prices for a specific property;
Economic situation in the country (region, locality);
Monthly average wages specific region;
The cost of the land plot on which the apartment is located;
Type, category, size, deterioration of the building;
Location and total number of rooms in the building;
Form of ownership;
Possibility of generating income from commercial activities (if the property is sold under a lease or social tenancy agreement);
Number of storeys.

The ratio of market value and cadastral value

Market value is unofficial, but the indicator is more objective;
The cadastral valuation does not take into account a number of factors (for example, seasonality, consumer demand, general condition market, availability of high-quality repairs, furniture, equipment);
The cadastral indicator is not as flexible as the market indicator;
Market value is manifested through the balance of supply and demand, competitiveness, and cadastral value through material analysis;
The cadastral value is based on a calculation mechanism, which can cause significant errors and, as a result, lead to inflated prices.

In practice, there are often cases of government agencies overestimating the final cadastral price by several times compared to the market price. This results in a larger tax payable on the property.

Where are they used?

The cadastral value of the apartment is used:

When entering into collateral obligations;
During the privatization procedure;
At mortgage lending;
When resolving property disputes in courts;
When calculating property tax and other fees.

Market value is used:

When withdrawing an object for government needs;
In mortgage and collateral legal relations;
Buying or selling an apartment;
In case of bankruptcy of the debtor;
For free transactions;
When determining the amount of a non-monetary contribution to authorized capital;
When making management decisions.

How to find out or determine cadastral and market value

You can find out the cadastral value in one of several ways:

Cost calculation using the official website of Rosreestr (information may not be relevant due to outdated data);
According to the information in the electronic cadastral passport of the apartment (paid service, about 200 rubles);
According to a cadastral passport on paper, received at the BTI when registering ownership of an apartment or a cadastral certificate (if the document is missing or it is known that the information contained in it is outdated, you must order a new copy);

It is important to understand that it is impossible to calculate the cadastral value yourself, since only authorized persons have access to special documents on the basis of which the indicators are compiled. In addition, cadastral valuation standards are constantly changing.

You can determine the market value of an apartment using one of several methods:

Income method (the method is based on the liquidity of the apartment and does not take into account the price of other similar offers);
Cost method(calculated based on the costs incurred during the construction of the facility and is more often used for unfinished construction projects);
Comparative method (takes into account a combination of factors, but may not take into account some individual indicators).

Market value calculation can be carried out:

By independent efforts (without special knowledge or experience, the likelihood of obtaining objective data decreases);
With the help of an independent appraiser, a realtor licensed to carry out this type of activity (at the end of the examination, a document is issued that has legal force and can act as an evidence base when challenging the cadastral value or when entering into obligations).

The cadastral value can be equated to the market value in the following cases:

An appropriate decision has been made by a court or a specially authorized commission;
If it is not possible to create and apply a mathematical model of the value of an object;
Property value data varies widely among individual information sources;
Objective calculation of cadastral value is impossible or difficult when using existing methodological recommendations;
Cadastral value indicators disproportionately exceed market value indicators.

Difference of coefficients and cases of excess of one indicator over another

Each region has its own calculation coefficients. You may notice that the cost of apartments in the western part of the country is much higher than in the eastern part. This is due to territorial coefficients taken into account by the cadastre and cartography authorities. The difference per square meter can reach several hundred thousand.

Cases where the cadastral value exceeds the market value are not common; the reasons for this may be:

The apartment is located in a new building;
Expensive building materials were used in the construction of the house;
The cadastral valuation was carried out on the basis of incorrect data entered into the real estate cadastre.

The excess cadastral value directly affects the amount of tax. To exclude an overpayment, you can dispute it in one of the following ways:

Out of court (by filing an application with a special commission under Rosreestr);
In court.

Conclusion

Cadastral and market values are completely different categories. Market indicators reflect collective perception and the most probable cost, while cadastral indicators are more unified, approved for a long period and are not able to cover the influence of all factors.

In cases of transactions in which the subject is real estate, owners are often faced with such concepts as the cadastral and market price of the object. At the same time, it is difficult for many to determine the difference between these categories, which is necessary when selling property. That is why it is especially important to answer the question of how the cadastral value differs from the market value.

Market price indicators are of particular importance when concluding real estate transactions. Such a value is formed only due to those features that are observed on the market in a specific period of time. In addition, the market value of an apartment directly depends on the economic and political situation as a whole. Respectively, this indicator very changeable. Moreover, the cost may be higher or lower in different regions.

The most big problem market price is that it may differ depending on different times. You can buy an apartment for one price, which was higher than that set at the time of its sale. That is, it is this market indicator that affects the transaction itself, increasing the risks of its completion.

Most often, the market price is necessary when concluding the following contracts:

purchase and sale agreement;
exchange or gift;
pledge;
inheritance;
loan agreements.

Determining this cost of an apartment is very important, since no one wants to overpay extra money, and this can happen if price indicators that are valid at the time of concluding the contract are not established.

Main feature market value is also the fact that it is always determined regardless of taxes or other costs.

Prices in real estate markets often differ in how they are determined. It is often based on such things as the average cost of properties of similar type or category. Similar properties are compared and approximate market prices are determined. This factor also indicates the volatility of prices in the market, their inconstancy.

One of the main ways to determine the market price is to contact experts who independently evaluate the property. Based on such research, a certificate is issued, which the owner presents in case of transactions. With different assessments, expert opinions will have more weight, but the certificate is usually valid only for a while due to the volatility of market value.

Cadastral indicators were introduced when the obligation to collect property taxes arose. They allow you to calculate tax payments taking into account the characteristics of a specific time period. This price has always been distinguished by the fact that it was based on certain criteria that in no way depend on the economic situation in the region, as well as the popularity of a particular object. That is why we can say that there is nothing in common between the market and cadastral prices.

If it is necessary to determine the cadastral value of a land plot or other similar object, it is necessary to rely not on the characteristics of similar property, but on specific characteristics:

the area where the plot or house is located;
building materials;
infrastructure;
area of apartments and houses;
period of existence of the building;
other similar characteristics.

Such criteria primarily create a difference between the price indicators according to the cadastre and those indicators offered by the real estate market.

It is the cadastral value that is entered into the register, and depending on it, the amount of tax that will be levied on the property will be determined.

When determining the cadastral value, an assessment method is also used, which will be based on the criteria proposed above.

At the same time, the goals of such calculation of the price of any real estate object are determined:

Determination of the amount of property tax.
Re-registration of housing.
Calculation of tax in case of concluding civil contracts.
Registration of loans or mortgages.
Re-registration of property in the event of a gift or exchange of property.

The cadastral value also helps to determine the possible market price, since if the cadastral figures are higher, then one may doubt the profitability of the transaction and conduct an independent assessment.

The relationship between market and cadastral value raises many difficulties. Some owners believe that they are almost identical and differ only in the ways they are defined, that is, in the characteristics used for this. However, this is not true. In fact, cadastral and market values have nothing in common. In addition, it is almost impossible to encounter cases where the price is the same in both the first and second cases. It is believed that this can only happen in old houses that have low demand.

There are situations when the market price is significantly higher than the cadastral price. And this is explained by the fact that the cadastre determines its indicators based on certain characteristics of the object, while the market sets prices taking into account the demand and popularity of a particular area. Ideally, they should be completely identical, but as mentioned above, today this occurs exclusively in old houses.

In fact, most often the cadastral value can prevail over the market price, that is, the difference in some cases reaches twenty percent.

The difference between cadastral and market value is determined most accurately by considering a number of provisions:

The market price of land or a house is considered the most objective indicator compared to cadastral indicators, since it is based on the prices of similar property, and not on the characteristics of a specific object, as happens when determining the cadastral value.
Differences in characteristics. The cadastral price does not reflect criteria such as demand and market position, which ensures some stability of the indicator.
Cadastral indicators are determined using a special method - material analysis, since the object itself and its main characteristics are studied. In the case of market value, aspects such as competition, demand and popularity are examined.
Often the cadastral indicator is set too high; this is worth paying attention to when concluding transactions, since, unlike market prices according to the cadastre, the valuation does not always take place using sufficient funds for this purpose.
Cadastral prices are usually not as flexible as those on the real estate market.

There may be other differences that will appear both in the process of determining the indicators under consideration and in their application in the case of concluding transactions and selling property.

It should also be said that cadastral prices can only be determined by authorities. Property assessments are carried out regularly, at least once every five years, so the indicators are relevant and correspond to the characteristics of the property. In addition, the owner himself can revaluate his property, thereby determining its cadastral price.

With the market price everything is different. To establish it, other market indicators are simply analyzed, reflecting the level of competition, demand, and so on. At the same time, in fact, the law does not in any way establish the concepts of cadastral value, but says a lot about the market price. This is explained by the fact that many authorities recognize each of these prices as similar to the other, hence there is no need to pay attention to each indicator separately.

In addition, it should be said about the influence of one price on another, namely the cadastral price on the market price. This effect is practically not observed, since they have no relationship with each other. It is precisely because of certain differences that the absence of such an influence occurs, since the cadastral value is based on subjective characteristics and requires regular revaluation every five years, while market indicators are unpredictable and can change without determining a specific frequency.

The lack of influence of one price on another explains the differences in cadastral and market value indicators. Due to its unpredictability, the market price most often exceeds cadastral indicators.

The cadastral price is also considered more smooth; it is always based on specific time periods. Comparing one cadastral value with the one that existed previously is meaningless; accordingly, the cadastre indicators are more accurate and constant. Market value is unpredictable, which makes it more flexible, but fickle.

Increased cadastral price

In practice, there are cases when the cadastral price is determined much higher than market indicators. This happens because all research is carried out superficially and insufficiently detailed. It is necessary to evaluate each premises, which is not carried out by the authorities. This does not allow the price to be set correctly. As a result, the market value is significantly lower than the cadastral value, and this can significantly affect the course of the planned transaction.

In order to understand the consequences of exceeding the cadastral value, it is necessary to consider the reasons for this phenomenon:

the size of the cost according to the cadastre affects cash, coming to the budget, since it is this indicator that determines property taxes;
rates for cadastral value are irrelevant, since they were developed during a period when prices for apartments and land plots increased greatly due to reforms, and then no changes were made;
Some factors are not taken into account, namely the working capacity and payment capabilities of the population, employment in the region and other similar criteria that would reflect the possibility of setting specific prices.

Also, depending on the subject of the Russian Federation, there may be other reasons that have a significant impact on the size of the cadastral value, since each individual region has its own characteristics of the construction and maintenance of residential buildings.

In some cases, the condition of the apartment has a significant impact. The market usually inflates prices only when apartments are in good repair, new technology, good equipment, but often these characteristics are missing. This automatically affects the market price, lowering it, but without changing the cadastral value in any way, since it is based on other criteria. Accordingly, there is an obvious overestimation of cadastre indicators over those established by the market.

The most advantageous situation for the owner in the case of the purchase and sale of an existing property is the excess of the market value over the cadastral value, which allows one to avoid large amounts of taxes.

In a situation where the prices offered in the register do not suit the owner, he can always contact the relevant authorities and even the court in order to challenge the existing indicators. Ultimately, everything may remain unchanged, or changes will be made to the information contained in the registry. In any situation, when concluding transactions, all prices, both cadastral and market, must be clarified, and, if necessary, a revaluation of existing property must be carried out.

Thus, indicators from the cadastre and the real estate market have nothing in common with each other. The difference between the cadastral price and the market price is primarily manifested in the methods of determining these indicators, as well as the subjectivity and objectivity of each of them. In cases where the cadastre figure exceeds market prices, you can always challenge these results, otherwise inflated taxes will be imposed.

Calculating the cadastral value of real estate and entering data into the unified state register is a prerequisite for taxation.

As a result of the coordination of the Land and Tax Codes, the cadastral value of the real estate used is calculated in order to determine the amount of taxes. The difference between cadastral and market value is that when calculating the price of the first type, many subjective indicators are not taken into account.

Features of calculating cadastral value

The cadastre calculation is carried out by employees of specialized state services, which initially respect the interests of the government. Laws on state real estate valuation recommend using only general rules for calculations, therefore the real market value of an apartment or house will always differ from the cadastral value of a land plot or apartment.

The market price of real estate depends on a variety of factors that are not taken into account when determining the register and cadastral value. The housing market dictates certain conditions when conducting real estate transactions. At the same time, many homeowners and tenants are interested in the question of how the cadastral value differs from the market value.

Significant differences between the actual value and the estimated value appear due to the following reasons:

increased or decreased market demand for housing;
time of season;
market recovery or decline;
assessment flexibility;
competitiveness;
ratio (balance) of supply and demand;
unreasonable overestimation of the cadastre value.

The state tax base consists of budget revenues in amounts that depend on the size of the cadastral value of real estate. The answer to the question why the cadastre became higher than market prices lies in the following:

When the tax reform came into effect, there was a certain rise in real estate prices.
Over time, land has changed in price, many rates have lost their relevance.
Low solvency of the population.
When determining cadastres, the location of the objects being assessed is not taken into account.

To make price calculations more similar to reality, special coefficients are used. With their help, the cadastral and market value of a land plot or other real estate object are close in value to each other. However, it is very difficult to achieve a complete match.

To clarify the price, the values of market prices for similar objects in a given region are often taken into account. But, because the law does not regulate the number of objects being compared; the result does not always satisfy the interests of the parties. Often no one checks the sources of information and the relevance of prices, which means more mistakes are made.

When is cadastral value needed and methods for calculating it?

The difference between market and cadastral prices plays a significant role in calculating tax rates. In other words, the higher the official estimate, the greater the financial burden placed on citizens. At the same time, it is necessary to know it in the following cases:

when privatizing a state-owned facility;
when using an apartment, land or house as collateral;
to determine the tax on the sale of land;
for obtaining a mortgage;
to resolve property disputes.

List of documents required to obtain the result of assessing the cadastral value of a real estate property:

Papers certifying the right to own real estate.
A copy of the owner's passport.
Technical and cadastral passports.
Documents on encumbrances.
Land survey plan.
Lease agreements and statements.

Legal entities also need to have documents certifying their status, a power of attorney from the customer, details of documents (passports, certificates of ownership, etc.)

There are cases when the cadastral and market values differ greatly from each other. The state cadastre can be several times higher than the real price. Methods and rules for calculating cadastral prices are set out in official advisory documents approved before 2000.

It also states that there should be no differences between them, since theoretically the methods are designed to obtain the real selling price of real estate.
The following parameters are taken as the basis for official government calculations:
type of buildings and category of real estate;
what form of ownership;
on what territory is the object located;
description of the features of the land plot;
terms of purchase/sale;
for commercial objects, the estimated income (from rent, trading activities, etc.) is included in the calculations;
description of the terrain of the site;
general condition of the property.

Is it possible to challenge the assessment of the state cadastral value?
By a court ruling, market and cadastral prices can be equated to each other. Thanks to this, many clients of independent appraisal companies reduce their tax burden legally. Just submit statement of claim to the court and attach a package of necessary documents:
an extract from the Unified State Register of Real Estate with the disputed value of the cadastral price of real estate;
a certified copy of the certificate of ownership;
official confirmation of the unreliability of assessment information;
additional documents.

What is needed for the large cadastral valuation to be equal to the market indicator? After all, the higher the cadastre, the greater the tax deduction rate for individual. In order to equate the high rate of the registered state assessment with the real market value, it is necessary to obtain a court decision.
What determines the market value of real estate
This indicator is directly dependent on supply and demand. The volume of its value is formed according to the strict laws of economics. The real cost of housing is constantly changing; it can either skyrocket or fall sharply. It is the market price indicator that appears when performing various transactions and concluding legal facts with real estate objects:
Purchase/sale of housing.
Apartment exchange.
Using real estate as collateral.
When applying for a loan.
Taking out a loan.
Giving.
Entry into the right of inheritance.

The above list does not include all cases when it becomes necessary to use the market value of a property.
It is supply and demand that determine the real price of a housing property. In accordance with economic laws, neither a house, nor a plot of land or an apartment will ever be sold at a price that does not correspond to reality. This indicates that there are certain criteria that include not only the construction cost of the facility.
List of additional factors influencing the formation of the market value of housing:
age of the building;
prestige of the location of the house and the area;
comfort of the internal environment;
timing of the last repair and its quality;
availability and condition of plumbing fixtures;
quality of internal communications;
provision of heating and air conditioning devices;
number of storeys;
elevator operation;
garbage removal, etc.

The current market value of the property is determined by independent experts with whom an agreement is concluded.

Professional employees of specialized companies evaluate cottages, houses, apartments, land plots for the current period of time and immediately formalize everything necessary documents. After six months or a year, prices change dramatically, and if necessary, value indicators will have to be clarified again.
When calculating the cadastral value of a property, the following items are not included in the list of defining indicators:
prestige of the area where the housing is located;
redevelopment of the apartment;
recent renovations, etc.

The market is closest to the real value, compared to what is included in the state real estate cadastre of the State Property Committee. Sometimes these data coincide. Most often this happens when evaluating apartments located in old buildings.
In new buildings, new expensive building materials are used for wall fences, roofing, design of elevators, etc. Therefore, a higher value of the cadastral value of residential premises is entered into the State Property Code. But at the same time, the market price may lag due to the fact that the new area is not sufficiently promoted, there are few roads, and the infrastructure is poorly developed.
The discrepancy between market and cadastral prices for housing reaches an average of 30 - 100%. Fluctuations occur in any direction, both increasing and decreasing prices. These quantities do not have a mutual influence on each other.

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