Compliance
Russia Compliance Spotlight: Navigating Property & Transport Tax Exemptions under Law 425-ФЗ
Law 425-ФЗ introduced sweeping adjustments to property and transport tax exemptions—this article breaks down new eligibility, which vehicles qualify, and how families with children are affected.
By NomadicTax Research Team • 5 min read • August 18, 2026
## What is Law 425-ФЗ about?
Federal Law No. 425-ФЗ, adopted on **28 November 2025**, introduces changes to multiple chapters of Russia’s Tax Code starting from **tax period 2026**. The law revises **property tax**, **transport tax**, and **real estate valuation methods**, among others, for individuals and entities. ([nalog.gov.ru](https://www.nalog.gov.ru/rn77/news/activities_fts/16586443/?utm_source=openai))
## Core changes relevant for individuals and families
- **Transport tax exemptions:** Heroes of the Soviet Union/Federation and holders of the Order of Glory (all three classes) are now exempt from transport tax for **one vehicle** with the maximum computed tax in their regional jurisdiction—but **not for cars taxed with a ×3 coefficient or for air/water vehicles (except motorboats)**. Effective tax period 2026. ([nalog.gov.ru](https://www.nalog.gov.ru/rn77/news/activities_fts/16586443/?utm_source=openai))
- **Property tax deductions for families:** Physical persons with **three or more children under 23 years old, in full-time education**, now receive deductions on property tax based on cadastral cost—5 m² per child for apartments/rooms, or 7 m² for houses. Applies to tax period 2026. ([nalog.gov.ru](https://www.nalog.gov.ru/new2026/?utm_source=openai))
- **Real estate located in special regime zones exempted:** Properties in territories declared emergency zones or where forced relocation has been enacted are now fully exempt from property tax during such periods. ([nalog.gov.ru](https://www.nalog.gov.ru/new2026/?utm_source=openai))
## How valuation and filing have shifted
- Real estate complexes considered “commercial/office” are added to regional lists where **cadastral value** becomes the tax base—this tends to increase tax as opposed to previous book or market value measures. ([nalog.gov.ru](https://www.nalog.gov.ru/rn77/news/activities_fts/16586443/?utm_source=openai))
- Starting **August 1, 2026**, delivery of tax notifications shifts for those registered via ЕСИА—automatic notifications via the unified portal, reducing paper correspondence and moving communication to digital channels. ([nalog.gov.ru](https://www.nalog.gov.ru/rn77/news/activities_fts/16586443/?utm_source=openai))
## Actionable checklist for taxpayers
1. **Review if you're eligible**—do you hold the Order of Glory, a Hero title, or a title with specific exemptions? Does your family composition qualify for child-based deductions?
2. **Audit your property portfolio**—check if any property is in mandatory evacuation zones or has been affected by emergency regulations.
3. **Adjust tax planning accordingly**—if you own multiple vehicles, choose which one you’ll claim the exemption for (remember excluded types).
4. **Update contact method and portal registration**—to ensure timely notification delivery via Госуслуги if registered in ЕСИА; otherwise, notification may default to paper mail or visit to tax office.
### Example
Maria lives in Moscow with three full-time university-aged children under 23. She owns a two-bedroom apartment and a large family car subject to a 1× coefficient. She will receive:
- Property tax deduction of 5 m² per child = **15 m²** subtracted from cadastral value for tax base.