The obligation to conduct property valuation is established by the law “On valuation of property, property rights and professional appraisal activity”. The most common case of valuation for individuals is property taxation.
In all cases, the transfer of ownership of an object of real estate, except cases of inheritance and / or receipt of a gift of property, the value of which is taxed at zero rate (that is, the parties are family members of the first degree of kinship – parents, husband or wife, children, in including adopters), it is necessary to determine the estimated value of the property.
The subjects of valuation activity according to the law on evaluation are:
business entities – natural persons registered in the procedure established by the legislation are entities of entrepreneurial activity, as well as legal persons, regardless of their organizational and legal form and form of ownership, which carry out economic activity, which includes at least one appraiser, and which received a certificate of the subject of valuation activity in accordance with this Law;
bodies of state power and bodies of local self-government, which received the authority to carry out appraisal activities in the process of performing functions of management and disposal of state property and / or property in communal ownership, in which the appraisers work.
In cases of independent valuation of property (valuation of property carried out by the entity of valuation activity – an entity), a report on valuation of property is prepared. In cases of independent valuation of property by a state body or local government, an act of property valuation is drawn up. Requirements for property valuation reports and property valuation acts are established in accordance with Article 12 of the law on valuation.
Thus, the report on the valuation of property is a document containing conclusions about the value of the property and confirms the performed procedures for assessing property by the subject of valuation activities. Requirements to the contents of the report on the assessment of the property, the procedure for its registration and review are established by the provisions (national standards) of property valuation. The content of the property valuation report should include sections that reveal the content of the procedures performed and the legal framework used to evaluate the property.
It should be noted that, as stipulated by paragraph 57 of the National Standard No. 1 “General Principles of Appraisal of Property and Property Rights”, approved by the Resolution of the Cabinet of Ministers of Ukraine dated September 10, 2003, No. 1440, the validity period of the report (and, consequently, the conclusion on the value of the property as an integral part thereof) is indicated by the appraiser only if necessary or in cases established by law specifically for certain situations.
The duration of the reports, for example, in the following situations:
– privatization or sale of state or communal property in a competitive manner – 6 months from the date of assessment;
– lease of state or communal property – 6 months from the date of evaluation;
– enforcement proceedings – 6 months from the date of signing the assessment;
– expert monetary valuation of land – 12 months from the date of assessment;
– “estimated value” of the property, determined for tax purposes – 6 months from the date of the assessment.
When taxation of income from the sale of real estate is a comparison of prices and valuation value to determine the tax base on the income of an individual from the sale of real estate. The proceeds from the sale of the property are determined on the basis of the price specified in the contract of sale, but not lower than the estimated value of such an object, calculated by the authority authorized to carry out such an assessment in accordance with the law and registered in a single database of the assessment reports. In other words, the higher price (whether indicated in the contract or in the property valuation report) will always be taken as the basis for the tax calculation. It will be appropriate to note that the contract may indicate a price significantly lower than the estimated value determined in the property valuation report. The lower price will have no impact on taxation, but such cases occur when the property needs to be sold promptly or the value of the property specified in the contract has an impact on further legally significant actions with it, such as the division of property under the lawsuit of one of the spouses.
Consequently, the valuer should register the property valuation report in a single database of assessment reports. An assessment report that is not registered in a single database of assessment reports without an assigned unique number in accordance with the requirements of the legislation is invalid.
The only database of assessment reports is the information and telecommunication system, which includes a database and an electronic definition of the value of the module (for the purpose of verifying the value of objects of taxation made by the subject of valuation activity). A single database of evaluation reports provides for the placement, creation, storage and disclosure of all information about the property and its value (except information on the normative monetary valuation of the land), the electronic determination of the estimated value, the automatic exchange of information and documents with authorized electronic platforms and the use of services with automatic information exchange, accessed through the Internet.
The inclusion of information from evaluation reports into a single database of assessment reports is carried out by valuation entities through authorized electronic platforms. Use of such a base appraisers of property, as well as notaries. Earlier entry of evaluation data and entry into the evaluation register was free of charge; at present, the use of authorized electronic platforms is payable. An authorized electronic platform has an integrated system of information security and provides registration of subjects of valuation activities, placement, receipt and transmission of information and documents to a single database of evaluation reports in order to verify the estimated value of the property, use of services with automatic information exchange, access which is carried out through the Internet.
A single database of assessment reports should ensure the preservation and proper protection of all information about real estate whose estimated value is determined and verified, and the ability to access this information by notaries and supervisors within the authority. Proper information protection is provided by automatic exchange of information and documents between a single database of assessment reports and authorized electronic platforms.
According to the Ukrainian Association of Appraisers, taking into account the provisions of the Law “On Access to Public Information”, access to non-personalized information of the Single Database of Reports should be open, with unauthorized public access to it by an unlimited number of persons. Most of the information on the main state registers (for example, the State Register of Real Property Rights, the Unified Register of Legal Persons, the Uniform Register of Public Formations) is open to all users either free of charge or for a nominal fee.
The database contains statistical and analytical materials. She, with the help of the electronic module, compares the “market price” with that which is defined by the appraisers in the report.
The main elements of comparison are the characteristics of such property in the place of its location, physical and functional characteristics, terms of sale, etc. The average market price of a property similar to an object of valuation is the price equivalent to the probable price for which the sale / purchase of a property similar to an object with an appropriate term of service may be realized on the established valuation date. The result of the electronic determination of the estimated value performed by the Unified module is applied within the range of plus or minus 25 percent of the indicator value. That is, the valuator is allowed to allow a deviation at the established price of the object within the limits of 25 percent.
In the event of a discrepancy more than the planned SPF, the appraiser’s report will not be accepted into the database, and will not be assigned a unique number. In general, it should be noted that the report on the valuation of property entered into the database can have 4 statuses: “confirmed”, “registered”, “checked”, “denied”. The status “registered” receives all reported reports and depending on the verification by the module of electronic determination of the estimated value and receipt of information during the certification of transactions, the notary or the person who acts on the transaction on the alienation of movable property, the assessment report acquires status “confirmed “,” Checked “,” denied “.
A single database of evaluation reports monitors the evaluation report for the absence of violations during its compilation and in the event of its completeness, correctness and conformity, including the conformity of the estimated value of property, property rights to market prices, registers the assessment report with the assignment of a unique number to it . After assigning a unique number, the automated identification of the subject of valuation activity is carried out.
A valuator who does not agree with the results of the verification of the estimated value of a single database of assessment reports, has the right within 10 days to apply to the State Property Fund of Ukraine with a request for a review of the assessment report in accordance with the law on assessment. The State Property Fund of Ukraine considers such a statement no more than five days.
During the certification of transactions for which the law of Ukraine provides for the receipt of the evaluation report by the notary, the notary checks the registration of such a report in a single database of assessment reports and the presence of a unique number assigned to him.
In the course of transactions for the sale (exchange) of real estate between individuals, the notary certifies the relevant agreement in the presence of the estimated value of such real estate and a document on payment of the tax to the budget by the party (parties) of the contract and quarterly submit to the controlling authority at the location of the state notary office or private notary office information about such agreement, including information about its value and the amount of tax paid in accordance with the procedure established by this section for filing weekly calculation.
We can state that the digital revolution has already taught computers to calculate the market price. We will soon see how another profession – the appraiser disappears.
And for the rest it should be remembered about the responsibility, which is provided for making knowingly false information in the database of reports. The website of the State Property Fund of Ukraine states that there has recently been a practice in which the unified database of assessment reports for tax purposes, and the calculation and payment of other mandatory payments, which are performed in accordance with the law, was made to make false information from simulated reports on an estimate for their use in the future period and avoiding the procedure for verifying the estimated value of the object of evaluation. In the event of the discovery of such facts (information from simulated assessment reports), the relevant information will be transmitted by the electronic module to the law enforcement agencies to take measures on grounds of the crimes provided for in Articles 190 “Fraud”, 358 “Falsification of documents, seals, stamps and forms, sale or use of forged documents, seals, stamps, 365-2 «Abuse of authority by persons providing public services», 366 «Service falsification», 384 «Deception of court or other authorized body» Criminal Code of Ukraine.
At present, there are a number of cases in the register of court decisions imposing sentences with sanctions in the range of 3 to 5 years imprisonment for a significant devaluation (5 times) of expensive real estate (from 5 million UAH). For example, we refer to the decision of the Boryspil City Court http://www.reyestr.court.gov.ua/Review/64410640 in a criminal proceeding regarding the accusation of the appraiser in the actions expressed in the valuation of real estate in the amount of UAH 5 million when the market the cost was 11 million UAH.
However, one of the legal options for optimizing taxation can be considered the way of making real estate on the balance of a limited liability company and, in the future, the possibility of alienating corporate rights.
At the same time, for the purpose of tax optimization, lawyers and lawyers are ready to analyze your situation and to offer lawful and at the same time the most advantageous mechanisms of legal registration of the transfer of ownership of real estate.