Regarding the calculation and payment of real estate tax

Payers of the tax on immovable property other than a land plot (hereinafter referred to as the tax) are individuals and legal entities, including non-residents, who own residential and/or non-residential real estate.

The tax notice(s) on payment of the amount(s) of tax calculated in accordance with subparagraph 266.7.1 of the TCU, together with a detailed calculation of the amount(s) of tax and the relevant payment details, in particular, of local governments at the location of each residential and/or non-residential real estate, are sent to the taxpayer by the controlling authority in accordance with the procedure set forth in Article 42 of the TCU by July 1 of the year following the base tax (reporting) period (year).

Regarding tax exemptions on real estate other than a land plot.

Tax exemptions on real estate other than a land plot are defined in clause 266.4 of the TCU.

The tax base of the residential real estate object/objects, including their shares owned by an individual taxpayer, is reduced

a) for an apartment/apartments regardless of their number - by 60 square meters;

b) for a residential building/buildings regardless of their number - by 120 square meters;

c) for different types of residential real estate, including their shares (in case of simultaneous ownership of an apartment/apartments and a residential building/buildings, including their shares) - by 180 square meters.

This reduction is granted once for each basic tax (reporting) period (year) (subpara. 266.4.1 of the TCU).

Village, settlement, city councils establish tax exemptions on the tax paid on the respective territory on residential and/or non-residential real estate owned by individuals or legal entities, public associations, charitable organizations, religious organizations of Ukraine, whose charters (regulations) are registered in accordance with the procedure established by law, and are used to ensure the activities provided for in such charters (regulations).

The tax exemptions for individuals on residential and non-residential real estate are determined based on their property status and income level (sub-clause 266.4.2 of clause 266.4 of Article 266 of the Code).

The tax benefits provided for in subparagraphs 266.4.1 and 266.4.2 of the TCU for individuals do not apply to:

taxable object(s) if the area of such object(s) exceeds five times the size of the tax-free area established by subparagraph 266.4.1 of paragraph 266.4 of Article 266 of the Code;

taxable object(s) used by their owners to generate income (rented, leased, loaned, used in business activities).

The following objects are not subject to the tax on real estate other than a land plot

• residential and non-residential real estate located in the zones of alienation and unconditional (mandatory) resettlement as defined by law, including their shares
• buildings of family-type orphanages;
• dormitories;
• residential real estate unsuitable for living, including in connection with the emergency condition, recognized as such by the decision of the village, town, city council or council of the united territorial community established in accordance with the law and the perspective plan for the formation of community territories;
• residential real estate objects, including their shares, owned by orphans, children deprived of parental care and persons from among them recognized as such in accordance with the law, children with disabilities raised by single mothers (fathers), but not more than one such object per child;
• buildings of pre-school and general educational institutions, regardless of the form of ownership and sources of funding used to provide educational services;
• residential real estate owned by large families or foster families with five or more children.

At the same time, temporarily, for the period of martial law on the territory of Ukraine, introduced by the Decree of the President of Ukraine "On the Introduction of Martial Law in Ukraine" dated February 24, 2022 No. 64/2022, approved by the Law of Ukraine "On Approval of the Decree of the President of Ukraine "On the Introduction of Martial Law in Ukraine" dated February 24, 2022 No. 2102-IX, until December 31 of the year in which martial law is terminated or canceled, the provisions of Article 266 of the TCU shall be applied with the following peculiarities

tax on real estate other than a land plot is not accrued and paid, in particular, by individuals:

1) for residential and/or non-residential real estate located in the territories of active hostilities or in the territories of Ukraine temporarily occupied by the Russian Federation:

• for 2021 and 2022 - for residential real estate, including their shares owned by individuals;
• for the period from March 1, 2022 to December 31, 2022 - for non-residential real estate owned by individuals.

Starting from January 1, 2023, for residential and/or non-residential real estate, including shares thereof, owned by individuals and/or legal entities located in the territories of active hostilities or in the territories of Ukraine temporarily occupied by the Russian Federation, which are included in the List of territories where hostilities are (were) conducted or temporarily occupied by the Russian Federation, tax on immovable property other than a land plot is not accrued and paid for the period from the first day of the month in which the date of the beginning of active hostilities or temporary occupation was determined in respect of the relevant territories to the last day of the month in which the hostilities or temporary occupation in the relevant territory is completed.

The dates of the beginning and end of active hostilities or temporary occupation are determined in accordance with the data of the List of territories where hostilities are (were) conducted or temporarily occupied by the Russian Federation.

The list of territories in which hostilities are being (were) conducted or temporarily occupied by the Russian Federation is determined in accordance with the procedure established by the CMU;

2) for residential and/or non-residential real estate destroyed as a result of hostilities, terrorist acts, sabotage caused by the armed aggression of the Russian Federation against Ukraine for 2021 and subsequent tax (reporting) periods - for residential and/or non-residential real estate, including their shares, owned by individuals, the data on the destruction of which is entered in the State Register of Property Damaged and Destroyed as a Result of Hostilities, Terrorist Acts, Sabotage Caused by the Armed Aggression of the Russian Federation against Ukraine (hereinafter referred to as the Property Register);

3) for damaged residential and/or non-residential real estate (as such that requires major repairs, reconstruction or restoration as a result of hostilities, terrorist acts, sabotage caused by the armed aggression of the Russian Federation against Ukraine):

♦ for 2021 and subsequent tax (reporting) periods - for residential real estate, including their shares owned by individuals, which were damaged in 2022 as a result of hostilities, terrorist acts, sabotage caused by the armed aggression of the Russian Federation against Ukraine, and the damage data of which are entered in the Property Register. The accrual of tax on immovable property other than a land plot for such immovable property is resumed starting from the month following the month in which, according to the Property Register, residential real estate objects are overhauled, reconstructed, restored and recognized as habitable;

♦ for the period from March 1, 2022 and subsequent tax (reporting) periods - for non-residential real estate, including their shares owned by individuals, which were damaged in 2022 as a result of hostilities, terrorist acts, sabotage caused by the armed aggression of the Russian Federation against Ukraine, and the data on damage to which are entered in the Property Register. The accrual of tax on immovable property other than a land plot for such immovable property is resumed starting from the month following the month in which, according to the Property Register, non-residential real estate objects are overhauled, reconstructed, restored and recognized as suitable for their intended use.

For residential and/or non-residential real estate, including their shares owned by individuals, damaged (as requiring major repairs, reconstruction or restoration) in tax (reporting) periods starting from January 1, 2023 as a result of hostilities, terrorist acts, sabotage caused by the armed aggression of the Russian Federation against Ukraine, the tax on real estate other than land shall not be accrued and paid for the period from the first day of the month in which the fact of damage to residential and/or non-residential real estate was recorded according to the Property Register until the first day of the month following the month in which, according to the Property Register, residential and/or non-residential real estate objects are overhauled, reconstructed, restored and recognized as suitable for living/use for their intended purpose.

In the case of residential/non-residential real estate, including their shares, which as a result of hostilities, terrorist acts, sabotage caused by the armed aggression of the Russian Federation against Ukraine, have suffered minor damage, are suitable for living/use for their intended purpose (respectively) and are subject to restoration by means of routine repairs, village, town, city councils, military administrations or military-civilian administrations have the right to

1) set tax rates on immovable property other than a land plot in an amount less than the amount of tax on immovable property other than a land plot established by a decision of the relevant local self-government body for a certain type of immovable property paid on the respective territory;

2) to exempt from the tax on immovable property other than a land plot.

For individual taxpayers, the controlling authority independently calculates the tax liability and sends (delivers) a tax notice-decision for the tax (reporting) periods of 2021 and 2022 by December 31, 2023, except for tax liabilities for non-residential real estate located in the territories of active hostilities or in the territories of Ukraine temporarily occupied by the Russian Federation, which are included in the List of territories where active hostilities are (were) conducted or temporarily occupied by the Russian Federation, for which the controlling authority calculates the tax liability and sends (delivers) a tax notice-decision for the tax (reporting) periods of 2021 and January - February 2022, no later than the first day of the month following six months after the date of completion of active hostilities or temporary occupation.

As for the payment of tax, the tax liability for the reporting year 2023 shall be paid by individuals within 60 days from the date of delivery of the tax notice-decision.