Business on a personal subsidiary farm
Good afternoon, dear readers!
Do you have a personal subsidiary farm (PSH) where you grow vegetables, poultry or cattle for your own consumption? Does it happen that you have an abundance of products and you sell them to neighbors or in the local market? Turn your subsidiary farm into a profitable business!
What is the relevance of business in organizing and developing private household plots
Personal subsidiary farming is a form of activity that generates income, but is not considered an enterprise. Its advantages are that when selling their products, the owner of a private household does not need to be afraid of a tax audit or sanitary inspection.
In addition, the status of the owner of a personal subsidiary farm gives you the right to state support in the form of subsidies and preferential credit terms. You can engage in personal farming on the basis of ownership of the land plot.
If you do not have land in your property for farming, you have the right to rent it from agricultural land or territories that are considered part of the settlement. The size of the allotment is determined by the local administration.
Its maximum area is from 0. to 1 ha. It is not allowed to build a residential building, hotel or other capital structure on this territory, but it is allowed to install greenhouses, warehouses, temporary pens for animals and birds.
If you do not have large start-up funds, but you are not afraid of the need to work a lot with your hands and your head, then a business plan for a private household is a great idea for starting a family business.
Income from the sale of products grown on a personal backyard is not taxed. The only mandatory payment is land tax. Whether to register with the Pension Fund or not, you decide for yourself.
The import substitution policy, which has been in effect in Russia for several years, is helping to increase the interest of buyers and investors in small agricultural enterprises, as well as to increase the volume of products they produce.
How to register a private household - read a detailed article in our magazine.
Private household plots or personal subsidiary plots are a legally enshrined small form of economic activity. Registration of such a business allows you to engage in breeding poultry and livestock, growing vegetables or fruits. To start official activities in this area, it is necessary to obtain rights to the land where the private household plots will be located.
Permission to maintain and use a personal subsidiary farm is not required, since it occurs simultaneously with the acquisition of land ownership or the conclusion of a lease agreement. The only thing that will be required is to open private farms in the local self-government body.
Private household: what is it and what are the benefits
Private subsidiary farming is not an entrepreneurial activity. At the same time, it is allowed to produce and process agricultural products for personal use. The surplus is allowed to be sold. Personal subsidiary plots are:
- breeding of livestock, bees, poultry and other animals;
- growing horticultural crops;
- use of land for plowing and haymaking, etc.
Activities at private farms are considered non-commercial as long as members of the same family work on the site. Benefits follow from this:
- Products are not subject to taxes.
- No accounting required.
- State registration as an entrepreneur is not required.
All questions regarding private household plots are regulated by the Law of the Russian Federation N 112-FZ "On personal subsidiary plots" dated 07. 7. 003
The number of animals on the site is limited only by the requirements of the sanitary services. There can be any species of plants and animals, the main thing is that it does not contradict the legislation of the Russian Federation.
For example, plants containing narcotic substances can lead to a fine or criminal prosecution. This issue is regulated by the Criminal Code of the Russian Federation (Article 231 “Illegal cultivation of plants that contain narcotic drugs or psychotropic substances or their precursors.” A complete list of such plants can be found in the Decree of the Government of the Russian Federation of November 27, 2021 No. 934
Today, more and more people are starting to think about running a personal subsidiary farm. It is quite possible to consider this form of activity as a way of additional or main income. Is everything as simple as it seems at first glance, and what pitfalls can be encountered along the way? Below we will talk about how to open private farms and correctly build your relationship with the state from a legal point of view.
What is LPH
Federal Law No. 112 of 07. 7. 003 defines the legal aspect of the activity of private household plots. Based on this, you can make a quite capacious definition of this term:
That is, when running such a farm, the goods received are mainly aimed at meeting the needs of the family using this plot. At the same time, the sale of the surplus is not subject to taxes and fees, since a private household is not considered as an organization or entrepreneurship.
A plot of land is required to run a private household plots. It can be owned or rented. The size of this site is limited to 0.5 hectares by law. A residential building can also be located on this land. But even here there are some restrictions: the area for construction should not occupy more than 10% of the total area of the site, and on the land provided for field land, housing construction is generally prohibited. However, greenhouses and outbuildings are permitted in the field.
Procedure for registration of private household plots
For registration of the farm, permits are prepared for the conduct of certain activities. Private household plots do not need to be registered as an enterprise. An activity permit comes from the moment of registration of the land plot.
To account for this type of activity, you must submit an application to the administration of the settlement at the place of registration. There they will make an entry in the household book. For correct registration, the following data may be necessary:
- name and data of the owner or tenant of the land, as well as the people living with him;
- cadastral characteristics of the site: area and location;
- the number of livestock and poultry;
- a list of machinery and other equipment that will be involved in the activities of the private household. This also includes transportation.
In fact, the maintenance of private household plots is one of the types of land use, legalized at the state level. This can also be applied in areas intended for residential construction, as well as located in areas of rural type. The size of the plot has been determined and cannot exceed the permissible parameters entered on the basis of the laws of each constituent entity of the Russian Federation.
In the event that the territory exceeds certain dimensions, the surplus is subject to alienation. Otherwise, there will be a need to register a peasant farm or individual entrepreneurship. Residents of cities can also receive land plots if there are free allotments in the selected settlement.
Russia has changed its socio-economic system. This contributed to a change in the financial condition of people. A system of lending to ordinary citizens for various needs has become available. Now you can change your place of residence. Many townspeople move out of town, to the countryside and choose houses with large personal plots. Recently, this has become a trend, especially near large cities with a million inhabitants.
They run from big cities to villages for clean air, for silence and the opportunity to eat foods not stuffed with chemistry. Due to the fact that products in stores began to contain chemical ingredients that are harmful to health, more and more people tend to grow their own agricultural products for their own consumption. But you can also have income from a personal plot if you grow products for sale. Is it worth the candle? Let's look in this article about making money on a personal subsidiary farm.
Private household plots are a type of non-entrepreneurial activity in the production and processing of agricultural products. They do not register as entrepreneurs. Our citizens, who run their own subsidiary plots, are recognized as agricultural producers on a par with farmers and agricultural enterprises in accordance with No. 122-FZ “On Personal Subsidiary Farming”.
The most widespread phenomenon of a private household is a grandmother who sells her potatoes and other vegetables on the market. We meet with this phenomenon often. In fact, she grows products for her own consumption, but she does not need such quantities. And the surplus goes on sale. Grandma can't bring her products to the store. They simply won't accept it. Therefore, selling surplus products on the market is the most common way that does not take much time and money. Fairs, weekend fairs, urban markets and rural markets are common nowadays. There are no too serious requirements for products.
It is quite difficult to present your products to representatives of private household plots in the retail network, too strict requirements (passport, GOSTs for products, ensuring stability of supplies). In the market, they pay only for a trading place and this is where all the costs end.
Therefore, having the opportunity to sell surplus manufactured products, you need to decide for yourself what is more profitable: to trade on the market, to your neighbors with your products, or to open an individual entrepreneur and become an entrepreneur and be able to hand over your products to stores. According to the law "On personal subsidiary plots" it is allowed to conduct it alone or together with residents (family members). Such activity is not considered as entrepreneurship. Consequently, it is not regulated by business laws.
Criteria for determining private household plots:
- the plot of land has a mark of the status of private household plots in the owner's documents;
- housekeeping does not imply profit;
- surplus is not prohibited from being realized in any volume;
- only officially residing citizens work in private households. Wage labor is not provided;
Doing business and not paying taxes seems like an unrealistic enterprise. However, by registering a personal subsidiary farm (LPH), you will earn money without being officially engaged in entrepreneurial activity.
At the same time, there are no violations of the law, on the contrary: the state supports such activities. Private household plots are a subsistence farm with an area of up to 0.5 hectares for growing plants (vegetables, fruits, cereals, berries), breeding livestock and poultry for the needs of their families.
In the article we will consider the nuances and features of the design and maintenance of private household plots.
What are the features of registration of private household plots
Let's start by defining what a personal subsidiary farm is. This will help you understand its nuances.
In Law No. 112-FZ, private household plots are prescribed as a form of non-entrepreneurial activity that allows the production and processing of agricultural products.
Everything that citizens have raised belongs exclusively to them. When selling crop products or, for example, poultry, the owner will not be caught in the business. Such actions are regarded as getting rid of the surplus.
The main feature is work without registration of an individual entrepreneur. You can conduct any activity on your own or leased land after obtaining permission in the form of the right to property or to lease. There are two types of sites for organizing work: home and field.
The advantage of plots located within the boundaries of a settlement is the ability not only to breed livestock and grow fruits and vegetables, but also to build a residential building here. While the field is exclusively the production of agricultural products. You can't build any buildings here, except for greenhouses.
Land registration is mandatory if it is the property of the state and has been specially allocated for subsistence farming. Thus, the owner will legitimize the use.
What does the design of private household plots provide
The law says that state support is one of the components of running private household plots.