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[BUYING AND SELLING REAL ESTATE IN UKRAINE]
than 3 years – 0%, but if more than 1 object is sold within a year – then 5% for other types of real estate – 5% for an increased rate of 18% may apply in certain cases. non-residents,
other real estate objects is usually VAT- able. VIII. Share deal Real estate property can also be acquired by way of a share deal – acquiring a share/participatory interest in a company holding title to real estate property. In some cases, real estate acquisition through a share deal may be preferable for the purchaser due to the tax and other advantages of such a transaction. Sale of shares in a joint stock company or participatory interest in a limited liability company is not subject to VAT. A share deal does not entail registration of transfer of ownership title to real estate, though within the share deal a target company is acquired by the purchaser along with all its rights, obligations, and liabilities. Contrary to an asset deal, a share deal may be governed by foreign law according to the parties’ choice. IX. Agents The seller and purchaser can both use the services of a real estate agent (broker). Currently, the use of a real estate agents (brokers) in Ukraine is voluntary. X. Donations Real estate property can also be acquired by means of a donation agreement. Due to the specific nature of the donation, there are some cases when a donor can demand termination of the donation agreement (e.g., if the beneficiary intentionally committed a criminal offence against the life, health, property of the donor, his/her parents, wife (husband) or children). *** The above information is provided for general understanding only. Real estate acquisition may also involve other legal and
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Defence contribution (applies if PIT rate is not 0%): 1.5% Buyer (natural person):
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• pension fund levy 1% (for certain types of real estate) 1.2. To be distributed between the parties upon their agreement:
state fee 1%;
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notary fee (depends upon exact notary); broker’s fee (de pends upon exact broker, usually around 5%).
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Generally, the base for the above accruals is a contractual price, which shall be not less than the price identified by an independent appraiser. 2. Legal entities In general, paragraphs 1.2 and 1.3 apply to legal entities as well. In addition, it should be considered whether the transaction is subject to withholding tax (if the seller is a foreign legal entity), and to VAT. The statutory WHT rate is 15%; double tax treaty benefits are available in some cases. The VAT rate is 20%. Generally, the sale of land is VAT exempt, while the sale of
ILN Real Estate Group – Buying and Selling Real Estate Series
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