Ukraine -
Starting from 01 January 2012 all owners of residential property are obliged to pay the real estate tax.
The Tax Code of Ukraine, which was adopted on 02 December 2010 and becomes effective on 01 January 2011 (the "Tax Code"), introduces a new type of tax - a tax on real estate other than land plots (the "Real Estate Tax").
Thus, after long debates over what type of real estate should be taxed, the Tax Code established that only residential real estate will be subject to the Real Estate Tax. This tax will be payable by the owners of residential property (i.e. individuals and legal entities, including non-residents).
The Tax Code provides for an exhaustive list of categories of properties exempt from taxation, namely: (i) residential buildings which are owned by the state or local communities; (ii) residential properties located in restricted or unconditional (obligatory) resettlement zones; (iii) family-type orphanages; (iv) garden or country houses, but not more than one such building per taxpayer; (v) residential buildings which belong to large families and families that have adopted three or more children; and (vi) dormitories.
The Real Estate Tax rates shall be established by the respective village, town or city council within certain parameters. In particular, for apartments with a living area not exceeding 240 sq. m. and houses up to 500 sq. m., the rates may not exceed 1% of the minimum wage, set as of 01 January of each reporting year. For apartments with a living area over 240 sq. m. and houses over 500 sq. m., the established rate is 2.7% of the minimum wage, set as of 01 January of the reporting year. Living areas of up to 120 sq.m. for apartments and up to 240 sq.m. for residential houses are exempt from the Real Estate Tax and this tax applies only to any meterage exceeding the mentioned thresholds.
The amount of tax payable is calculated on the basis of the living area of the residential property in question. For individuals, tax authorities shall calculate and send tax calculations by 01 July of the reporting year, and shall give notice of the amount of tax and its payment details. Taxpayers who are legal entities shall independently calculate the amount of tax payable as of 01 January of the reporting year and submit a tax return to the state tax authority at the location of the property before 01 February of the current year.
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 09/12/2010.
