Real estate tax. Ukrainian realities.

Verkhovna Rada of Ukraine within adoption of the Law on the improvement of the Tax Code (№ 8217) approved an amendment according to which the tax on real estate property, that is different from the plot, will become effective on July 1, 2012 and not on January 1, 2012, as it was planned earlier.

The taxpayers will be individuals or legal entities, including non-residents - owners of residential real estate. Non-residential real estate is nontaxable.

Residential real estate includes:
 houses: townhouses and condominiums;
 extension to residential houses;
 apartments;
 cottages;
 multi-room (communal) apartments;
 garden house;
 summer houses.

Residential building - a major building, constructed in compliance with the requirements established by law and designed for permanent residence therein. Residential building comprises mansion houses and apartment houses with different numbers of storeys.

Mansion house - a house, located on a separate plot, and composed of residential and nonresidential premises.

Extension to residential building – a part of the building, located outside the contour of its outside main walls and having one or more main walls with the main part of the house.

Flat (apartment) - an isolated premise of the residential building designed and suitable for permanent residence.

Cottage - a one or a one and a half storey house with small living area and the plot for permanent residence.

Rooms in multifamily (communal) apartments - isolated rooms in the apartment where two or more tenants live.

Garden house - a house for the summer (seasonal) use, which does not meet the residential house standards of building area, external design and engineering equipment.

Summer house - a residential house which is used for a country holiday during the whole year.

Nontaxable real estate:

- residential real estate owned by the state or territorial communities;

- residential real estate located in areas of exclusion, defined by law;

- family-type orphanages;

- garden house or summer house, but no more than one object for a taxpayer;

- residential real estate that belongs to large families, bringing up three or more children, but not more than one object per family;

Real estate tax base is a residential area of residential real estate.

If a taxpayer has few objects of taxation, the tax base is calculated separately for each of these objects.

Tax allowance.

The tax base decreases when calculating the tax: For an apartment - by 120 square meters. m; For a dwelling house – by 250 square meters. m; Such a reduction is available once during the reporting period and applied to the object at payer’s option.

Tax rate.

The tax rate is set by city or village council as a percentage of the minimum wage set at 1 January for 1 sq. meter of residential area of the residential real estate:

- for apartments, residential area of which should not exceed 240 sq. meters, and for residential houses, residential area of which should not exceed 500 sq. meters, the tax rate is no more than 1%.

- for apartments, residential area of which is more than 240 sq. meters, and for residential houses, residential area of which is more than 500 sq. meters, the tax rate is 2,7%.

In 2011 the Law of Ukraine "On State Budget" established such a minimum wage as:

960 UAH - from 01.04. to 31.09; 985 UAH - from 01.10. to 31.11; 1004 UAH - from 01.12.2011.

The absence of the object valuation and its market value has become the particularity of the Ukrainian real estate tax. And this is specific know-how. Perhaps this was deliberately done in order to simplify administration, and more likely, the real valuation is simply impossible. There were a lot of remarks in commenting on the law which equalizes the owner of the high class real estate with the owner of the ordinary real estate. Do you think that the apartment with residential area over 120 square meters or the house with area more than 250 square meters are ordinary accommodations in Ukraine? There is quite a liberal attitude to the tax now. I think it will become much tougher in a while. First nasty surprises we will get before the law came into force in the form of amendments and comments. But it’s not necessary to meet trouble halfway because in all developed countries there is a property tax. We only need to try to properly manage our property.

Real-estate tax will be paid in 2013 in Ukraine

Real estate agency "Teren Plus" – property rent and sale in Kyiv downtown.Luxury apartments for rent, apartments for daily rent. Property management.