Prospects for the Transformation of Real Estate into a Source of Increasing the Financial Capacity of Territorial Communities

Abstract

Real estate is one of the basic assets of functioning of the territorial community. However, due to improper activity or inaction of local self-government bodies, it remains only a nominal asset of the administrative-territorial unit and does not contribute to increasing the financial capacity of the territorial community. The article is aimed at identifying and suggesting possible ways to transform real estate into a source of increasing the financial capacity of the territorial community. In the course of the study, the extant obstacles were highlighted, including corruption schemes that cause local budgets to lose revenues from rent and alienation of communal property. It is noted the need to intensify the activities of local self-government bodies in the direction of inventory of all communal real estate, to establish its market value and increase the transparency of operations for the provision of communal real estate for rent. The possibility of development of municipal rental housing in large cities is considered. Special attention is paid to the real estate, which is privately owned as a quasi-asset of the territorial community, which ensures revenues to the local budget in the form of the tax on a real estate other than the land plot. The analysis of changes in the situation of the real estate market in 2020-2021, which indirectly affect the filling of local budgets with proceeds from the tax on a real estate other than the land plot, was carried out. The possible ways to increase the financial capacity of territorial communities by strengthening the role of communal and private real estate within the assets of the territorial community are identified, suggested, and substantiated.

Keywords

• real estate
• territorial community
• asset
• rent
• real estate tax