Fees increased for changing the permitted use of Moscow land plots – what investors should know

30/11/2020

Since 19 November 2020, an adjusted mechanism now applies for calculating fees for changing the type of permitted use (the “TPU”) of a Moscow land plot. Such a fee may be payable by a private owner or the lessee of publicly owned land plots (except for those in federal ownership). The approval of the new calculation procedure has led to a significant increase in the amount to be paid for changing the TPU. Even before acquiring the relevant site, investors must now take into account the cost of changing the TPU in the financial model of the planned project. As a result, the changes introduced will negatively affect the investment performance of development projects and increase construction costs. In turn, the purchase or lease cost for end users will rise.