Enterprises occupying state-owned or municipal land must register private ownership or lease tenure of land plots until January 1, 2008. The Ministry of Economic Development and Trade drafted the amendments to encourage land privatization by medium-sized and large business by reducing the redemption price and lease payment.
The bill fixes the redemption price for plots housing privatized enterprises at no higher than 20% of the cadastral value of the plots for Moscow and St. Petersburg and no higher than 2.5% elsewhere.
Minister German Gref said only about 25% of the total land subject to re-registration had been privatized or leased since the law came into effect three and a half years ago. "The main problem is uncertainty with future lease charges and the high redemption price," he said.
The redemption price currently equals five to 30 times the amount of the land tax for settlements with a population of 500,000 to 3 million people, five to 17 the amount for settlements with fewer than 500,000 people and three to 10 times the amount for out-of-town land.
Gref said the redemption price would fall by more than 50% for Moscow and St. Petersburg, Russia's two biggest cities, and by an average 90% for the whole of Russia against 2006 if the bill is passed. The total expenses of enterprises on redemption will decline by 75%, the minister added.
The bill also says 80% of the cadastral value of the plot acquired at the new redemption price in Moscow or St. Petersburg will be charged if the plot is then used for purposes other than its current use.
Alexander Shokhin, head of the Russian Union of Industrialists and Entrepreneurs, suggested redemption payments by installments during a period of three years.