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Land and Property Policy

20.08.2015, 15:32

Rent-to-buy option for city properties extended until July 2018

Rent-to-buy option for city properties extended until July 2018

Alexander Prokhorov, first deputy head of the Department of City Property, has described the procedure for the preferential buyout of city property at a news conference on extending the privatisation period for leased city property.

“The preferential right to buy city property in and of itself is an effective tool to support Moscow businesses. However, in the course of our dialogue with the business community, we have come to the conclusion that this procedure needs adjusting. The amendments introduced to the federal law make the privatisation process more favourable for the business sector. One of the most significant amendments, proposed by the Department and long awaited by leaseholders, was the extension of the instalment payment plan from three to five years,” he said.

Considering the demand for this service, the preferential buyout option was extended until 1 July 2018.

“Today we’re seeing a significant rise in applications from those who would like to own the properties they lease. To compare, in 2014, the number of purchase contracts was triple the number of those concluded in 2011-2013, totaling 1,500. In the first six months of this year alone, the Department has already concluded around 1,000 contracts,” Mr Prokhorov said.

Before the end of the year, revenues from the privatisation of city properties are expected to gross 15 billion roubles, he said. In 2016, this indicator should be no less than 18 billion.

The preferential buyout right can be used by small and medium-sized businesses that lease city property (under contracts signed no later than 1 July 2013) and that have no rent arrears.