Landlords in Russia potentially face fiscal penalties for tax evasion by the year 2025.
The Federal Tax Service (FNS) in Russia has intensified its control over the housing rental market, a move that could potentially impact a significant portion of Russian property owners engaged in rentals.
In an interview with Gazeta.Ru, Senator Olga Epifanova forecasts that by 2025, around half of Russian apartment owners engaged in rentals could face tax penalties. This prediction comes as the FNS monitors advertisements, analyses bank transfers, and cross-verifies data with Rosreestr, all in relation to the housing rental market.
Particularly large cases of unpaid taxes in the Russian housing rental market may lead to criminal prosecution, if the debt exceeds 2.7 million rubles over three years. Fines for unpaid taxes can reach up to 40% of the debt amount, making it a costly oversight for property owners.
Senator Epifanova, an arbitrage manager at the Russian Ministry of Justice, advocates for creating favorable conditions for the legalization of rental income to prevent 'draconian measures' in the housing rental market. This call is especially relevant for 'professional landlords' or private investors in the Russian housing rental market.
As the FNS's actions unfold, the Russian housing rental market may see an increase in the number of 'professional landlords' or private investors seeking to legally declare their rental income. This shift towards legalization could potentially lead to a decrease in the number of unpaid tax debts and criminal prosecutions related to unpaid taxes.
Affected private rental property owners facing increased tax scrutiny and potential criminal proceedings due to unpaid taxes can seek support from specialized tax advisory firms, legal defense organizations specializing in tax law, and potentially associations of property owners or landlords that provide guidance on compliance with new tax regulations. However, no specific publicly known institutions for this exact purpose are currently highlighted, so consulting professional tax and legal experts experienced with the Federal Tax Service’s enforcement is advisable.
The goal of creating favorable conditions for the legalization of rental income is to allow citizens to legally declare their income in the Russian housing rental market, thereby contributing to a more transparent and regulated market. As the FNS continues its crackdown on the housing rental market, it remains to be seen how property owners will respond and whether the market will move towards increased legalization.
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