Tax consulting

The sale and use of real estate is associated with the payment of taxes. Therefore, before registering certain rights to real estate, it is necessary not only to study the procedure for registering such rights, but also to understand what eventual taxes will have to be paid on such real estate.

Real estate tax

It should immediately be stipulated that real estate tax means the tax on residential and non-residential premises – the tax on land plots will be discussed further.

Real estate tax must be paid by all individuals and legal entities that own residential or non-residential premises

There are exceptions to this rule, however, in order to understand whether your case falls under these exceptions, you need to analyze the circumstances of your specific situation. The answer is in the Tax Code – the legislation provides for benefits on paying real estate tax if you own:

  • the apartment with the area less than 60 sq.m.;
  • the house with the area less than 120 sq.m.;
  • the apartment+the house, the area of which is less than 180 sq.m.

Such benefits are general, that is, if you own two apartments of 40 sq.m., then from 20 sq.m. that are not covered by the benefit, you are required to pay the tax.

The Tax Code provides for both tax benefits and additional taxation, or the so-called “luxury tax”.

So, you must pay the additional 25 thousand UAH for each real estate object, the area of which exceeds:

  • 300 sq.m.- for apartments;
  • 500 sq.m.- for houses.
The real estate tax is calculated according to the formula: (Number of sq.m. – benefit) * tax rate for 1 sq.m.

The tax rate for 1 sq.m. is established at the discretion of the local self-government authority – the village council, city council, etc., however, it cannot be higher than the limit established by the Tax Code. At the time of this article writing, this limit constitutes 90 UAH for 1 sq.m.

The real estate tax must be paid once a year. The procedure and the terms for such tax payment differ greatly depending on who owns the real estate – an individual or a legal entity. In order to understand which procedure applies to you, you need to analyze the circumstances of your specific situation, therefore, VigoLex recommends everyone to advise with lawyers on this issue.

Land tax

The land tax must be paid by all persons who own or use land plots. The Tax Code establishes different tax rates for land plots for which the regulatory monetary appraisal has been carried out and for land plots for which such an appraisal has not been carried out.

If the land plot has passed the regulatory monetary appraisal, then the tax rate constitutes:

  • for common lands – no more than 1% of the appraisal amount;
  • for agricultural lands – from 0.3% up to 1% of the appraisal amount;
  • for forest lands – no more than 0.1% of the appraisal amount;
  • for other lands – no more than 3% of the appraisal amount;
  • for the plots that are in permanent land use – no more than 12% of the appraisal amount.

If the land plot has NOT passed the regulatory monetary appraisal, then the tax rate constitutes:

  • for agricultural lands – from 0.3% up to 5% of the appraisal of tillage area unit;
  • for forest lands – no more than 0.1% of the appraisal of tillage area;
  • for other lands – no more than 5% of the appraisal of tillage area unit.

As with the real estate tax, there are a number of exemptions for land tax, but it is necessary to analyze the circumstances of your specific situation to understand whether your situation is eligible for such exemptions or not.

VigoLex team will be happy to provide with legal assistance and help with tax planning in the process of registering rights to your real estate.

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