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Ukraine

Arzinger

1

Restrictions

Can anyone (including foreigners) own and occupy real estate in your jurisdiction (including shares in property owning companies)? Are there any restrictions?

Foreigners (individuals and legal entities) as well as Ukrainian legal entities with foreign capital can generally freely own & occupy real estate (including shares in property holding companies). Freehold to the land plots can be acquired by foreigners subject to some limitations & restrictions. 

Agricultural land is still under some special restrictions which apply for both domestic & foreign capital.

 

Are there restrictions on lending for the purchase of real estate by foreign companies? If so briefly give an outline?

No, there are no restrictions on loans for the purchase of the real estate by foreign legal entities in Ukraine. Having said this the collateral should be structured in a way, that in case of default and enforcement no foreign ownership restriction & limitation for property ownership would apply.

2

Taxes

Buying

Please provide a short summary of the fees and costs (including tax) relating to buying real estate in your jurisdiction.

Asset deal is subject to 1 % state duty and 1 % pension fund duty, fractional notary fees apply.

Asset deal is subject to 20 % VAT. The sale of an undeveloped land plot is VAT-exempt.

Share deal (acquisition of shares of a property holding company) is VAT exempted, no further transaction taxes and notary fees apply.

Owning

Are there taxes applicable to owning real estate and can the burden of the taxes be passed to someone else (e.g. a tenant or an occupier - not being the owner)?

All owners are payers of land and real estate taxes. Land tax is calculated based on regulatory-monetary valuation of a land plot or its area (for the land without valuation). The real estate tax - based on the area of the buildings.

Such taxes are local; thus, their exact rates are determined by local councils. However, real estate tax rate per 1m² cannot exceed 1.5% of the minimum wage established as of 1 January of the tax year (≈EUR 2,66 in 2020).

Compensation of the expenses for such taxes could be included in the rental fee.

 
Tax Breaks

Are there tax breaks or other incentives for foreigners to buy real estate in your jurisdiction? If so what are they?

Unfortunately, no. In Ukraine, such privileges are not granted. Simultaneously, all foreigners are granted with the similar rights and freedoms as Ukrainians in the acquisition of real estate (with certain restrictions related to acquisition of the land plots).

3

Title of Real Estate

How is the ownership of Real Estate evidenced in your jurisdiction?

In Ukraine, a building and the underlying land plot enjoy a separate legal treatment and have separate title documents. The ownership of real estate is evidenced by registration at State register of Propriety rights to real estate ("SRPR"). SRPR is a public register and the information registered here confirms the official recognition and confirmation by the state of the facts of acquisition of rights to immovable property. Such information is publicly available. When the real estate acquired prior to 2013 and are not registered in SRPR, the ownership is evidenced by possession of the title deeds.

Is it possible to keep the identity of owners of real estate confidential in your jurisdiction?

No. As above-mentioned, the information with respect to registration of the title to real estate (all key data related to owners, real estate characteristics, existent encumbrances and restrictions) is publicly available and registered in SRPR, other state registers (for instance, certain information regarding land plots is also available from Land State Cadastre).

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Timur Bondaryev 
Arzinger
Ukraine