The article formulates and considers main practical aspects of the improvement and development of private property institution in the Russian Federation. Russian private property institution was defined to have substantial distortions caused by the drawbacks of existing regulatory legal acts; pernicious influence of side effects connected with bureaucracy and crime; absence of a clearly defined program aimed at support and development of small-scale business. The authors have drawn a conclusion that the improvement of Russian private property institution is the most urgent direction in the state development that requires the adoption of complex measures both at macro- and micro levels.