Property tax in Ukraine in 2023: types, procedure for calculation and payment

When providing advice on payment of taxes, we are very often asked about the property tax. This is understandable, since both individuals and businessmen use the property for their own comfort, or even for conducting certain business activities.

In this article, we will elaborate on the peculiarities of the procedure for calculating and payment of this or that type of property tax.

Many of our Clients seek advice on paying the “wealth tax”. However, there is no such thing as a “wealth tax” stipulated in legislation. In practice, such tax refers to vehicle tax and tax on immovable property (hereinafter - the real estate tax).

Real estate tax in Ukraine in 2022

So, who is the payer of the real estate tax? For example, who has to pay tax on an apartment?

Individuals, legal entities (both residents and non-residents), which have residential and non-residential real estate in their ownership.

The object and tax base is residential and non-residential real estate and its total area.

The real estate tax rate in Ukraine is set by local governments, and shall not exceed 1.5% of the minimum national living wage as of January 1 of the tax year, per 1 sq.m. of the tax base.

Please note! Tax legislation establishes a “benefit”, according to which the tax base is reduced for real estate owned by individuals as follows:

For apartments - by 60 sq.m.;
For single residential dwellings - by 120 sq.m.;
For various types of residential property - by 180 sq.m.

Remember! The local governments may provide additional tax exemptions for property located in certain areas. To find out more about possible tax benefits, please contact our specialists

However, if the taxpayer owns a residential property with the total area of more than 300 sq.m. (for an apartment) and/or 500 sq.m (for a single residential dwelling), the amount of calculated tax will be increased by UAH 25,000 per year for each such real estate.

How will property tax be calculated in 2021 and 2022?

Let’s consider an example of charging property tax for an apartment with 70 sq.m of total area.

We subtract 60 sq.m. from 70 sq.m., as it is an area subject to tax exemption. So, we have 10 sq.m. left, which will be the tax base.

The maximum tax rate shall not exceed 1.5% of the minimum wage. According to the Law of Ukraine “On the State Budget of Ukraine for 2020” of 01.01.2020, the minimum wage is set at UAH 47.23.

So, the maximum tax rate for 1 sq.m. is UAH 71.

10 sq.m. * UAH 71 = UAH 710.

It should be noted that according to the decision of the Kyiv City State Administration, the tax rate is set at 1% of the minimum wage (UAH 47.23).

So, if you own apartment of 70 sq.m. in Kyiv, our equation will be the following:

10 sq.m. * UAH 47.23 = UAH 472.3.

The same tax calculation principle applies to single residential dwellings and other types of residential property.

Tax optimization option: to register ownership rights to a part of residential property for other family members, etc.

What is vehicle tax?

The payers of the vehicle tax are individuals and legal entities that own vehicles duly registered in Ukraine.

The object of taxation shall be exclusively passenger cars produced not earlier than 5 years before the date of tax payment, and which cost more than 375 minimum wages (more than UAH 1,564,875.00 in 2019).

In this case, the tax base corresponds to the object of taxation.

The tax rate is set at UAH 25,000 for each vehicle.

Related article: What Form Of Taxation Is Better To Choose For Doing Business: Single Tax

Please note! The cost of each vehicle is determined by the Ministry of Economic Development and Trade of Ukraine.

That is, even if you have purchased a vehicle, for example, for UAH 1 million, which was manufactured less than 5 years ago, and the Ministry of Economic Development has determined that it costs more than UAH 1,564,875.00 - you must pay vehicle tax in the amount of UAH 25,000.

Who does not pay real estate tax in Ukraine?

Property tax does not have to be paid if the property is owned by the state or local government. Also you should not pay tax on real estate owned by non-profit organizations that are financed from the state budget.

That is, if your property is privately owned, and meets the criteria we described above - you will have to pay for it.

But! There are a number of subsidies and tax credits, which we can tell you about at your tax consultation. We will also tell you how to organize your tax payment and optimize such taxation.

If you want to know in more details whether you need to pay the real estate tax or vehicle tax in Ukraine, please contact our company’s specialists and get a consultation.

We can help you optimize your property taxes and advice on business taxes. Give us a call!