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26/07/2026
Sunday
THIS DAY IN HISTORY:
26 July 
1970 The independence of the Maldives was proclaimed.
1970 The independence of the Maldives was proclaimed.
1970 War on the Indians was declared in Boston
1970 A war on the Native Americans (the Indians) was declared in Boston. From 15 to 100 pounds was promised for the scalp of one Indian.
1970 Tsar Alexei Mikhailovich convened the boyar Duma and the Council of the Patriarch to collect all the old laws and put them in order.
26 July
1970 The independence of the Maldives was proclaimed.
1970 The independence of the Maldives was proclaimed.
1970 War on the Indians was declared in Boston
1970 A war on the Native Americans (the Indians) was declared in Boston. From 15 to 100 pounds was promised for the scalp of one Indian.
1970 Tsar Alexei Mikhailovich convened the boyar Duma and the Council of the Patriarch to collect all the old laws and put them in order.
KS SUPPORTED BUSINESS IN A DISPUTE OVER DOUBLE LAND TAX
The Constitutional Court of Russia supported developers in a dispute over the taxation of plots for individual housing construction. The court recognized as unconstitutional the practice in which the land tax at a rate of up to 1.5% was simultaneously applied with the increasing coefficients of 2 and 4. This refers to plots for individual housing construction that are used in business activities.
The relevant position is set out in Constitutional Court ruling No. 52-P dated July 21, 2026. The court concluded that the current provisions of Articles 394 and 396 of the Tax Code allow for contradictory interpretations and do not allow taxpayers to determine the actual amount of their obligations in advance. The dispute arose over the plots for a cottage village. The issue was raised by a complaint from Corner Kazan, a company that owns plots in Kazan with the permitted use of "individual housing construction." The company used the land for the construction of a cottage village.
When calculating the land tax for 2023, the inspection applied the 1.5% rate set by the city authorities. At the same time, the tax authorities used the 2 and 4 coefficients, which are applicable to plots where housing construction has not been completed within the specified timeframe.
The 2 coefficient applies for the first three years after the registration of the land title and until the construction of the house is completed. If construction is delayed for more than three years, the 4 coefficient is applied. In combination with a 1.5% rate, the actual burden could reach 3% or 6% of the land's cadastral value, respectively.
The company challenged the assessments, but the arbitration courts of three instances supported the tax authority. In January 2026, the Supreme Court also refused to transfer the cassation appeal for consideration by the Economic Board, after which the applicant appealed to the Constitutional Court.
The coefficients were created for a preferential rate
The Constitutional Court drew attention to the history of regulation. Initially, coefficients 2 and 4 were applied to plots for residential construction, which were subject to a preferential rate of no more than 0.3%. This mechanism was intended to encourage landowners to develop their land and complete construction projects more quickly.
Even with the application of the coefficients, the final tax burden under the preferential rate was limited to a maximum of 0.6% or 1.2% of the cadastral value. This remained below the overall maximum rate of 1.5%, which was set for other land categories.
Since 2020, plots for individual housing construction used for business have been excluded from the category of lands subject to a preferential rate. Municipalities now have the opportunity to set a tax rate of up to 1.5% for these plots. However, the legislator has not adjusted the rules for applying higher coefficients. The possibility of simultaneously using the maximum rate and coefficients was not explicitly discussed during the adoption of the amendments. Some courts allowed the tax to be multiplied at a rate of 1.5% by increasing coefficients, while others considered such a burden disproportionate and pointed out the lack of direct permission in the Tax Code.
The new rule will take effect from the next tax period.
The Constitutional Court emphasized that all elements of the tax obligation should be formulated clearly and unambiguously. A taxpayer may not be required to pay more than is directly provided for by law, and the unequal application of the same rules violates the principles of equality and legal certainty.
The court ruled that starting from the new tax period, the coefficients of 2 and 4 would no longer be applicable to individual housing plots used for business purposes and subject to a tax rate of up to 1.5%. An exception may be made if the federal legislator explicitly introduces and justifies a different procedure.
The ruling applies to the future and does not automatically recalculate previously paid taxes for previous periods and the current year. An exception has been made for Corner Kazan, as well as for taxpayers who filed a lawsuit before the Constitutional Court's decision and whose cases are still being considered. The dispute with the Kazan company is subject to review.
The relevant position is set out in Constitutional Court ruling No. 52-P dated July 21, 2026. The court concluded that the current provisions of Articles 394 and 396 of the Tax Code allow for contradictory interpretations and do not allow taxpayers to determine the actual amount of their obligations in advance. The dispute arose over the plots for a cottage village. The issue was raised by a complaint from Corner Kazan, a company that owns plots in Kazan with the permitted use of "individual housing construction." The company used the land for the construction of a cottage village.
When calculating the land tax for 2023, the inspection applied the 1.5% rate set by the city authorities. At the same time, the tax authorities used the 2 and 4 coefficients, which are applicable to plots where housing construction has not been completed within the specified timeframe.
The 2 coefficient applies for the first three years after the registration of the land title and until the construction of the house is completed. If construction is delayed for more than three years, the 4 coefficient is applied. In combination with a 1.5% rate, the actual burden could reach 3% or 6% of the land's cadastral value, respectively.
The company challenged the assessments, but the arbitration courts of three instances supported the tax authority. In January 2026, the Supreme Court also refused to transfer the cassation appeal for consideration by the Economic Board, after which the applicant appealed to the Constitutional Court.
The coefficients were created for a preferential rate
The Constitutional Court drew attention to the history of regulation. Initially, coefficients 2 and 4 were applied to plots for residential construction, which were subject to a preferential rate of no more than 0.3%. This mechanism was intended to encourage landowners to develop their land and complete construction projects more quickly.
Even with the application of the coefficients, the final tax burden under the preferential rate was limited to a maximum of 0.6% or 1.2% of the cadastral value. This remained below the overall maximum rate of 1.5%, which was set for other land categories.
Since 2020, plots for individual housing construction used for business have been excluded from the category of lands subject to a preferential rate. Municipalities now have the opportunity to set a tax rate of up to 1.5% for these plots. However, the legislator has not adjusted the rules for applying higher coefficients. The possibility of simultaneously using the maximum rate and coefficients was not explicitly discussed during the adoption of the amendments. Some courts allowed the tax to be multiplied at a rate of 1.5% by increasing coefficients, while others considered such a burden disproportionate and pointed out the lack of direct permission in the Tax Code.
The new rule will take effect from the next tax period.
The Constitutional Court emphasized that all elements of the tax obligation should be formulated clearly and unambiguously. A taxpayer may not be required to pay more than is directly provided for by law, and the unequal application of the same rules violates the principles of equality and legal certainty.
The court ruled that starting from the new tax period, the coefficients of 2 and 4 would no longer be applicable to individual housing plots used for business purposes and subject to a tax rate of up to 1.5%. An exception may be made if the federal legislator explicitly introduces and justifies a different procedure.
The ruling applies to the future and does not automatically recalculate previously paid taxes for previous periods and the current year. An exception has been made for Corner Kazan, as well as for taxpayers who filed a lawsuit before the Constitutional Court's decision and whose cases are still being considered. The dispute with the Kazan company is subject to review.
22.07.2026
