International Accounting

Transactions with real estate: Tax and non-tax implications

Vol. 21, Iss. 7, JULY 2018

Received: 4 December 2017

Received in revised form: 16 April 2018

Accepted: 1 June 2018

Available online: 16 July 2018

Subject Heading: Tax and taxation

JEL Classification: Н25, Н26

Pages: 822–837

Lavnik R.V. OOO Mostaks, Moscow, Russian Federation

ORCID id: not available

P'yanova M.V. Financial University under Government of Russian Federation, Moscow, Russian Federation

ORCID id: not available

Importance As prescribed by new amendments made to the real estate tax treatment on January 1, 2014, real estate taxes shall be assessed on the basis of cadastral value of items. Having to bear greater tax burden, agents of real estate transactions need to optimize consequences of such transactions.
Objectives The research aims to study tools taxpayers use to optimize their tax burden when handing real estate deals and related tax and legal risks.
Methods Based on methods of description and generalization, we identify certain areas for tax burden optimization, which agents of real estate dealings use, and determine strengths and weaknesses of each tool, inherent risks. Pre-trial and court proceedings of cadastral value disputes were examined through methods of comparison, statistical data analysis, our own assessments.
Results We note a common tendency of growth in the number of taxpayers who litigate the cadastral value of real estate. We also identify tax implications of real estate alienation by category of taxpayers and property purpose. The article presents tax and legal risks of agents of real estate dealings in case when real estate is sold at an implausible price.
Conclusions It is legitimate and effective to decrease the cadastral value of real estate items to regulate the tax burden of owners, however it has some constraints. Legal and business structure and applicable tax treatment determine whether property alienation is reasonable. There is no unambiguous legal practice in deals when property is appraised below the market value, thus making it difficult to forecast unfavorable tax and other consequences.

Keywords: real estate taxation, cadastral value, court action, tax implication, property alienation, tax risk


  1. Tkacheva M.A. [Formation and development of the system of cadastral evaluation of real estate for taxation purposes in Russia]. Ekonomika i predprinimatel’stvo = Journal of Economy and Entrepreneurship, 2013, no. 12-2, pp. 725–730. (In Russ.)
  2. Pavlova V.A. [Contesting cadastral value: Present and past]. Imushchestvennye otnosheniya v Rossiiskoi Federatsii = Property Relations in the Russian Federation, 2015, no. 12, pp. 38–45. (In Russ.)
  3. Olenchenko A.V., Kholodova K.I. Problema ukloneniya ot nalogooblozheniya pri realizatsii fizicheskimi litsami nedvizhimogo imushchestva. V kn.: Obshchestvo v epokhu peremen: Sovremennye tendentsii razvitiya [The issue of tax evasion as part of individuals’ transactions for sale of real estate. In: Society during the time of changes: Contemporary trends in development]. Novosibirsk, Siberian Institute of Management RANEPA Publ., 2014, pp. 182–183.
  4. Kryukov S.V., Lapshina A.S. [Transition to a new system of real estate appraisal for purposes of taxation improvement]. Tavricheskii nauchnyi obozrevatel', 2015, no. 4-1, pp. 107–111. (In Russ.) URL:
  5. Loginova T.A. [Reform of taxation of immovable property: Social aspect]. Ekonomika i predprinimatel'stvo = Journal of Economy and Entrepreneurship, 2015, no. 9-2, pp. 763–769. (In Russ.)
  6. Kurkov I.I., P'yanova M.V. [Taxation of real estate of individuals in Russia: Problems and prospects]. Nalogi i nalogooblozhenie = Taxes and Taxation, 2015, no. 4, pp. 289–299. (In Russ.)
  7. Loginova T.A. [The ways of tax optimization of holding companies]. Finansovyi zhurnal = Financial Journal, 2015, no. 2, pp. 33–41. (In Russ.)
  8. Tikhonova K.V., Ushanly V.A. [Contesting results of cadastral value measurement]. Ekonomika i ekologiya territorial'nykh obrazovanii = Economy and Ecology of Territorial Formations, 2015, no. 4, pp. 55–59. URL:
  9. Kozlova E.V., Kozlov V.V. [System approach to challenging cadastral value of land]. Imushchestvennye otnosheniya v Rossiiskoi Federatsii = Property Relations in the Russian Federation, 2014, no. 12, pp. 46–58. (In Russ.)
  10. Semkina T.I., Sorokin A.V. [Taxing real property based on cadaster value]. Finansovyi zhurnal = Financial Journal, 2017, no. 2, pp. 20–26. (In Russ.)
  11. Elovatskaya T.A., Danilova L.N. [Mechanism components in a property tax charging of organizations: A current state and optimization directions]. Ekonomika i predprinimatel'stvo = Journal of Economy and Entrepreneurship, 2017, no. 8-2, pp. 1077–1081. (In Russ.)
  12. P'yanova M.V. [On reforming property of physical persons' tax in Russia]. Belorusskii ekonomicheskii zhurnal = Belorussian Economic Journal, 2016, no. 3, pp. 93–105. (In Russ.)
  13. Murzin A.D. [The cadastral cost as basis for the taxation of real estate]. Ekonomika i ekologiya territorial'nykh obrazovanii = Economy and Ecology of Territorial Formations, 2017, no. 3, pp. 67–72. URL: (In Russ.)
  14. Polyakova M.S. [Sale of real estate: Specifics of taxation and accounting]. Nalogovaya politika i praktika = Tax Policy and Practice, 2015, no. 8, pp. 74–80. (In Russ.)
  15. Mal'tsev A.A. [Legal capabilities of changing the cadastral value of real estate items]. Khozyaistvo i pravo = Economy and Law, 2016, no. 2, pp. 91-96. (In Russ.)
  16. Soboleva E.A. [Ways of protection of the rights of the buyer in the agreement of buy-sell lines a company with limited liability]. Mezhdunarodnyi zhurnal gumanitarnykh i estestvennykh nauk = International Journal of Humanities and Natural Sciences, 2017, no. 5, pp. 168–172. (In Russ.)
  17. Zhuzhoma Yu.N. [Contestation of the debtor's transactions: The risk of entrepreneurship]. Nauchnyi zhurnal NIU ITMO. Seriya: Ekonomika i ekologicheskii menedzhment, 2014, no. 1, p. 33. (In Russ.) URL:
  18. Alekberova N.N. [The problems of legal qualification of stimulated and fraudulent deals in civil law]. Pravo i politika = Law and Politics, 2013, no. 6, pp. 825–831. (In Russ.)
  19. Antysheva E.R. [The questions related to the recognition of transactions void and tax consequences as a consequence of such transactions]. Bukhuchet v stroitel'nykh organizatsiyakh = Accounting in Construction Companies, 2015, no. 8, pp. 40–45. (In Russ.)

View all articles of issue


ISSN 2311-9381 (Online)
ISSN 2073-5081 (Print)

Journal current issue

Vol. 21, Iss. 8
August 2018