Land property relations

The following activities are included in the sphere of land property relations in Moscow:

• Land development and use;
• Lease and management of personal property and real estate owned by the city, primarily buildings and premises located within residential and commercial buildings;
• Privatization, leasing and trust management of companies owned by federal or municipal authorities;
• Management of the city’s stakes in share capitals of joint-stock companies and other entities. All of the abovementioned matters are supervised by the Moscow City Land Property Complex, which consists of two departments: Moscow City property department and Moscow City land resources department.

Land property relations are high-priority for branch executive authorities, as they are closely connected with the economic interests of nearly all entities, and they provide the majority of non-tax revenues of the city’s budget.

The Moscow City property department, acting on behalf of the owner, the city of Moscow, has the following key goals in terms of improving the property management system:

• a considerable increase in revenue from the use and management of the city’s property;
• an increase in the market value of real estate owned by the City of Moscow;
• the capitalization of joint-stock companies, whose shares are owned by the city through trade on the stock market.

In recent years, the Moscow City property department implemented the Moscow City Government’s policy on the increase of revenues from the use of non-residential buildings owned by the city, thanks primarily to a transition to the leasing of non-residential buildings at market prices, provided that certain categories of tenants retain the benefits they already have.

Moscow is not only the capital of the Russian Federation, but also an independent region in terms of land property relations. According to the Russian Constitution and the Moscow Charter, land property, managed by the city, is divided into two main types:

• federal land property on the territory of one of the regions of the Russian Federation, which is state property of Russia — land plots with buildings and premises in which the legislative, executive and judicial authorities of Russia, the General Prosecutor’s Office, the Central Bank, the Pension Fund, etc., are located;
• federal land property of the region of the Russian Federation-Moscow.

The most common form of land use in Moscow is long-term leasing of land plots on which residential and non-residential housing is located.

Moscow City land resources department oversees all matters related to land leasing in Moscow.

When changes to the federal legislation regulating the purchase of land on which privatized companies are located became effective, the number of deals on land sale and purchase has increased considerably. At the same time, however, the main principle, which the Moscow City government has been consistently promoting, has remained unchanged: if a privatized company continues to operate without any changes to its core activities and retains its number of employees, it is entitled to bid for the purchase of land on which the company is located at 20% of the cadastral value. The new regulation, for instance, allowed the confectionary holding Krasny Oktyabr (Moscow) to purchase its land for a mere RUB 180m. Meanwhile, an investor who plans to close down the existing operations and use the plot of land for a different purpose will have to purchase it at 100% of its cadastral value. This approach has proved effective in helping the city retain jobs and develop industrial production.