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Taxation issues are among the most important for citizens. After all, when making any transaction, you must pay a certain amount of tax. The issue of paying taxes is defined in the Tax Code of Ukraine.

 As for real estate transactions, they are also subject to taxation.

 If a person sells real estate, he must pay income tax on the sale of real estate in the amount of 5% of the amount received. If the seller of the real estate is a non-resident, the tax rate is 15% (17%) of the value of the object, which is specified in the contract of sale, but may not be less than its appraised value. This means that regardless of the amount to be specified in the contract between the parties, the tax must be paid in the amount not less than the appraised value of the property.

 In the case of purchase and sale of real estate between individuals, the income tax is paid by the seller. Importantly, such a tax must be paid before the notarization of the contract of sale. That is, having agreed on the amount of sale of real estate, the seller must pay income tax on its sale before the notarization of the contract of alienation of this property.

 If the buyer of real estate is a legal entity or a natural person-entrepreneur, then in this case they perform the duties of a tax agent, withhold and transfer the tax.

 It should be noted that if, in accordance with a court decision, the owner of the real estate has changed and the right to immovable property has been transferred, the former owner must show the income from the alienation of the property in the Declaration and pay the tax himself.

 Personal income is not subject to personal income tax if there are three simultaneous conditions:

  • If you sell a house, apartment or part thereof (including land on which the property is located), as well as land, the size of which does not exceed the rate of free transfer of land, in accordance with Art. 121 of the Land Code of Ukraine in accordance with its purpose.
  • The sale of one of the objects provided above takes place for the first time in the reporting calendar year.
  • This property has been owned by the taxpayer for more than three years. If the real estate object is inherited, the term of three years does not apply.

 If all three conditions are met, the seller is not required to pay tax and file a tax return on property and income. But it is important that all three conditions were met together. For example, if a person has owned a plot of land for construction for more than three years and for the first time this year carries out the alienation of property, he does not need to pay income tax on the sale of real estate. If at least one of the above conditions is violated, you will still have to pay tax.

 The procedure for payment of tax on the sale or exchange of real estate is provided in Art. 172 of the Tax Code of Ukraine.

Author: Nikolay Baranovskiy

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