Here’s a comprehensive guide on how much you will have to pay under the new system and what you can expect.
New Tax Rates and Area Limits
The tax will be calculated based on the extra square meters that exceed the following norms:
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Apartments: Tax applies if the area is over 60 m².
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Houses: Tax applies if the area is over 120 m².
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Combined Real Estate: If you own both an apartment and a house with a total area over 180 m², the tax is applicable.
Rate Increase:
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Previously, the tax was 100.5 UAH per extra square meter.
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From 2025, the rate will increase to 106.5 UAH per extra square meter.
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Additional Fixed Tax:
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For apartments over 200 m² and houses over 600 m², an extra fixed tax of 25,000 UAH will be levied annually.
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Local councils set these rates, so the exact amount may vary by city. Importantly, the rate cannot exceed 1.5% of the minimum wage. As of January 1, 2024, the minimum wage is UAH 7,100.
Payment Terms and Penalties
Real estate tax is paid annually for the previous period. For example, in 2025, you will pay tax for the year 2024. Tax notices will be issued, and payment must be made within 60 days of receiving the notice.
Late Payment Penalties:
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Up to 30 days late: A penalty of 5% of the tax debt is applied.
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More than 30 days late: A penalty of 10% of the tax debt is applied.
Example:
If you owe UAH 2,000 and delay payment beyond the 60-day period by up to 30 days, the debt will increase to UAH 2,200.
In addition, if the tax is paid after the deadline, a penalty will be charged on the outstanding debt at a rate of 120% of the annual rate of the National Bank of Ukraine (NBU), effective from the day the tax debt arose.
Enforcement and Collection
Tax authorities have the right to bring legal action to recover unpaid tax debts. The state enforcement service is responsible for the collection process if the matter goes to court.
Summary of Key Changes
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Rate Increase: From 100.5 UAH to 106.5 UAH per extra square meter.
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Area Thresholds:
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Apartments over 60 m²
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Houses over 120 m²
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Combined properties over 180 m²
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Additional Fixed Tax: 25,000 UAH for apartments >200 m² and houses >600 m².
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Maximum Rate Cap: 1.5% of the minimum wage (UAH 7,100 as of January 2024).
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Payment Deadline: Tax must be paid within 60 days of notice.
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Penalties:
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5% penalty for delays up to 30 days
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10% penalty for delays over 30 days
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Additional penalty at 120% of the NBU annual rate for late payments.
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Conclusion
The updated real estate tax rules in Ukraine aim to streamline revenue collection and ensure fair taxation for larger properties. If you're looking to buy real estate in Ukraine or already own property, it’s important to understand these new changes and plan accordingly to avoid penalties. Stay informed about local council rates and be proactive in meeting tax deadlines to ensure smooth compliance in 2025 and beyond.
For more detailed updates on real estate tax Ukraine and other property-related matters, keep an eye on official government announcements and consult with local tax advisors.
