Ukrainians Will Pay Property Tax From 1st July: How Much and for What?

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Translated by Ollie Richardson for Fort Russ

18th June, 2016

Poroshenko’s ‘modest’ house in Kiev

Local authorities in different cities of Ukraine will charge different taxes on property.

Ukrainians with “extra” space will receive bills for property tax before the end of this month. The money will be charged for each square meter in excess of the normal (normal is determined by the local authorities). According to the tax code, most will have to pay into the Treasury for apartments that are rented. The website “Segodnya” figured out who and how many will have to pay for their property, and in what cities the Ukrainians can’t pay for property.

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On the 24th of December last year, MPs introduced changes to the Tax code (law No. 909), according to which the tax is levied not only for residential apartments and houses, but all outbuildings (sheds, garages, cellars, summer kitchen, etc.). Bills will come before the end of next month for 2015, and then next year, Ukrainians will pay according to the new rules.

Local councils have the right to determine the interest tax rate (from 0 to 3% of the minimum wage) and the area of the property that is not taxed (60 square meters per apartment, 120 for the house and 180 square meters in total area (houses and apartments).

For example, the city council took the decision for each “extra” square meter to collect 1% of the minimum wage (12,18 hryvnia for 2015). Resident of Kiev, who own two apartments in a total area of 140 square meters will have to pay tax for 80 squares (the norm for apartments in the capital is 60 square metres) – 974 UAH.

At the same time, the city council in Sumy decided for every “extra” square to collect 2% of the minimum wage (24.3 UAH). That is, the owner of two apartments with a total area of 140 square meters in Sumy will have to pay UAH 1948. And the owner of the same estate in Odessa will only pay for 20 square meters (local authority established “norm” for apartments and 120 square meters) to 486 UAH.

Kiev, Lvov, Chernivtsi, Ternopil, Lutsk, Uzhgorod, Cherkasy, Khmelnytsky, Poltava, Kherson, Chernihiv, and Mykolaiv will charge 1% of minimum wage for each meter. Odessa, Dnepropetrovsk, Kharkov, Zaporozhye, and Sumy will charge 2% of minimum wage.

If the apartment is for rent, the preferential rate of taxation for such property will not be used. According to the data published on the website of the fiscal service, the majority of local councils have decided to charge non-residential property (barns, garages, cellars, etc) 0% of the minimum wage.

  • Residential house 
  • The extension to the house 
  • Apartment 
  • A room in a communal apartment 
  • A house in the country 
  • For property you can not pay

You do not have to pay for property, emergency housing or dormitories in the exclusion zone. Besides, the property of orphans and single mothers raising a disabled child are not subject to the law. Kindergartens, public buildings, temples do not need to pay tax.

  • Property owned by the state or territorial communities. 
  • Property in the zones of foreign and unconditional resettlement. 
  • Family-type orphanages. 
  • Residential properties that belong to orphans, children deprived of parental care, disabled children who are brought up by single parents. 
  • Hostels. 
  • The building industry, in particular production buildings, workshops, warehouses of industrial enterprises. 
  • Buildings, structures of agricultural manufacturers intended for use directly in agricultural activities. 
  • Residential and non-residential property, owned by public organizations of invalids and their enterprises.

In each locality, local governments have the right to expand the list of objects from which tax is not charged. For example, in Kiev, housing owned by the disabled, members of families of heroes of Heavenly Hundred, participants of the ATO, and family members of the killed participants of the ATO (but not more than one object) are exempt. Ternopil City Council made exempt from taxation all religious organizations, except the Orthodox Church of the Moscow Patriarchate.

Prior to July 1st, the IRS will send out decision notifications and receipts with tax amounts. You need to pay  . In case, if the receipt of payment of a flat tax, which, for example, is already sold, or if a receipt did not come, but under the law the estate should be taxed, you need to contact the local office of the fiscal service.

The tax is levied once a year. In addition, owners of large homes (over 300 square metres for apartments and 500 houses) will have   For example, the owner of the apartment with an area of 310 square meters in Kiev, before July 1st, must pay 28,000 hryvnias. By the way, a “luxury tax” of 25,000 will have to be paid for cars that cost more than 750 times the minimum wage (1 million 33 thousand hryvnias).

If you do not pay tax until 28th August, the tax inspector may impose a tax lien on the property against the debt. If the tax is not paid for a long period of time, the property will be sold by court order. In addition, tax evasion is criminalized (article 212 of the CCU).

The state fiscal service claims that this property tax exists in all countries of Europe. “This tax exists in all the countries of Europe and the majority of countries in the world, and its citizens pay it. In Ukraine it is paid to the local budget (i.e. the budget, where citizens own real estate). In decentralization, local government reform, the local authorities are granted more powers,” said the press service, quoting the head of the tax division of the Department of taxes and fees from individuals of the SFS Yuri Tymoshchuk.

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