St. Petersburg Deputies Criticize Abolition of Land Purchase Benefits

On January 28, the St. Petersburg parliament approved in first reading a bill that radically changes the conditions for purchasing land from the city. Now, most tenant companies will lose the right to preferential purchase and will be required to pay the full cadastral value.

The document removes provisions that provided a discount for businesses occupying at least 70% of the plot area with buildings for social, cultural, or sports purposes. Also abolished is the possibility of purchase for 25% of the cadastral value for other categories of tenants.

The preferential procedure will remain only for residents of special economic zones, participants in strategic investment projects, and industrial enterprises.

The authors of the initiative — Governor«s representative Konstantin Sukhenko and Deputy Chairman of the Committee on Property Relations (KIO) Maxim Pokhil — explained the need for changes by the low demand for the benefit. Since the beginning of 2021, only 190 plots have been purchased.

During the discussion, the project faced harsh criticism from deputies. Speaker of the Legislative Assembly Alexander Belsky repeatedly demanded that officials explain the purpose of the document.
«You are proposing harsh measures, essentially giving no choice. And if you further raise the rent, what will entrepreneurs do then?» asked Belsky.

In response to Pokhil«s assertion that the methodology for calculating rent is already established and the benefit was almost unused, the speaker sharply replied:
«We are asking you about the goal. Whether the law was used or not is another matter... You stated that this way budget revenue will increase. Stop talking nonsense; in the world, lost profit is not calculated that way. Do you think business will rush to buy land for 100 percent of the cost? You must honestly tell business: you will pay higher rent, and we will not allow you to buy the land.»

Deputy Alexander Rassudov stated that abolishing benefits for investors who have already calculated their projects is «not very decent behavior.» He also pointed to the constant changes in rent calculation methodologies and the increase in cadastral value, which deprives businesses of the ability to plan.

The criticism was supported by the head of the «United Russia» faction Pavel Krupnik:
«If no one bought at 25%, then who will buy at 100% of the cadastral value? This is the most difficult time for business since World War II.»

Despite objections, the bill in first reading was supported by 35 deputies. The city administration asked to expedite the procedure, but parliamentarians insisted on standard timelines. The second reading is scheduled in two weeks.