Land plots for individual housing construction (IZHS) can be bought not only from developers or on the secondary market. Municipalities also actively involve unused land plots in circulation - for them, these are plans for the development of cities and settlements, as well as one of the ways to replenish the budget from sales and taxes. You can buy land for sale from local authorities through auctions. Plots are put up for sale both for sale in ownership and for rent for the purpose of building a house. The plot can be bought from the city below its cadastral value after the completion of construction. Another way is to get non-delimited land plots without bidding.
We will tell you how you can buy land plots cheaper than market value from the municipal authorities to build a house.
Buying land ownership at auction
One of the ways to purchase a land plot is to buy it out at an auction. Such tenders are carried out by regional authorities and municipalities. All information about the auctions is posted on the website torgi.gov.ru, information about the auctions in a particular settlement on the websites of the administration. It is not difficult to take part in the auction - you need to submit an application and pay a deposit. The winner is the one who set the highest price, if only one person participated in the auction, he receives the land at the starting price, which is usually below market and often equal to the cadastral price.
Such auctions are no different from the already familiar and popular sale of apartments by auction. If everything is usually clear with apartments and their cost and liquidity is not difficult to assess, then each land plot has its own unique characteristics, it may have an unfavorable location far from the infrastructure, or some encumbrances, or relief, says the CEO of Russkaya Sotka Ilya Terentyev. Quite often the price can be declared below the market, but during the auction it rises above it, says Maxim Leshchev, General Director of Geo Development.
Unlike buying apartments at auctions, bidding for land plots is less popular among end buyers and the number of participants is usually smaller, so there is an opportunity to become the only participant in the auction and get a lot at the starting price, says Ilya Terentyev. According to Maxim Leshchev, private investors who understand this market more often participate in auctions with land plots in the Moscow Region, and not end buyers - for many it is difficult and incomprehensible, you need to understand the nuances, as well as assess the real cost of land.
Land lease auctions
Local authorities often offer the right to lease a land plot for individual housing construction. The land is put up for auction with the technical conditions for connecting to the engineering infrastructure and the approved urban planning plan of the land plot, which indicates the limiting parameters of its development. One of the conditions of the auction - an individual residential building must be erected on the site; usually three to five years are given for construction. Such auctions are becoming more and more popular among end buyers, for local authorities it is a guarantee that long-term construction will not appear on the site.
The main advantage of the auction for the purchase of the right to lease a land plot with subsequent construction is the ability to redeem it at a price lower than the cadastral price. In Moscow, the post-construction redemption value is 40% of the cadastral value . Well, there are examples of more profitable deals - in Mytishchi, the cost of buying out a land plot with a completed property is only 3% of the cadastral value.
Each municipal entity of the Moscow region has such documents, and the cost of the redemption will vary, but it will always be significantly lower than the cadastral value. Having studied the relevant documents, you can calculate in advance the cost of buying out the land. Data on the cadastral value are posted on the official portal of Rosreestr.
Trading with the right to lease is certainly a more profitable option for those who want to acquire a land plot and build a house on it, Ilya Terentyev believes. According to Maxim Leshchev, this makes it possible to save money on purchases, as well as to defer payments for the land plot. But it is necessary to count that the cost of rent during construction and the subsequent redemption in the amount did not exceed the market value of the site, the expert warns. It is also worth comparing the cost of buying out a land plot or leasing it for 49 years - perhaps the lease will be cheaper or less costly for the budget than a one-time payment of the full amount, adds Maxim Leshchev.
