Taxes and tax deduction when buying (selling) an apartment in Ukraine

The acquisition of living space is definitely a joyful event. Just do not forget that you still have a lot of associated costs. Bank charges for cash transactions, property insurance - this is only a small part. The main blow to your budget will apply taxes when buying an apartment . Let's take a closer look at what exactly you have to pay and in what amount.

1. State fee for notarial acts.

1% of the value of real estate specified in the contract of sale will have to be paid to the state treasury for notarizing the parties' agreement. I would like to note that this is not a payment for notarial services, but the state duty! The work of the notary will have to pay separately.

If you are a non-resident and buy real estate in Ukraine, then the tax when buying an apartment (entering into a contract of sale) will consist of:

• 15% of income received in Ukraine;
• 20% VAT for legal entities having a representative office in our country and respectively registered as a payer of value added tax;
• 23% - income tax (for non-resident representative office).

Although there are categories of citizens who have the preferential right not to pay this state fee. These include:

• invalids of the Great Patriotic War and families of soldiers (partisans), killed or missing and equated to them;
• persons with disabilities I and II groups;
• victims of the Chernobyl disaster, belonging to categories I and II;
• Category III citizens affected by the Chernobyl disaster, permanently residing and working until the resettlement or self-resettlement in the exclusion zones, provided that they lived or worked in the zone of mandatory resettlement for at least 2 years as of January 1, 1993, and zone of guaranteed voluntary resettlement for at least 3 years;
• ІV category of citizens affected by the Chernobyl disaster, who constantly work and live in the territory of the zone of enhanced radioecological control, provided that as of January 1, 1993, they had lived or worked in this zone for at least 4 years.

2. Fee for mandatory state pension insurance.

You, as the Buyer, directly before notarizing the purchase and sale agreement, will have to pay another tax when buying property - a fee for compulsory state pension insurance. It also amounts to 1% of the amount of real estate valuation specified in the agreement. Requisites for payment provides notary.

When buying real estate under barter, life maintenance or donation contracts - the mandatory Pension Fund fee is not paid.

3. Tax on income derived from the sale of real estate.

If you find yourself in the role of the Seller of the apartment, then you are also waiting for a tax on the income from the sale. You will have to pay the amount indicated by the notary to the notary certification of the real estate purchase agreement in a banking institution - 5% of the value of the property sold and plus 1% if the area of ​​the object of sale is more than 100 square meters.

For non-Resident Sellers, the transaction income is taxed at a rate of 15% of the amount specified in the contract. But in fact, be prepared for the fact that for natural persons it will be 17% - it is calculated on the basis of income received by a non-resident for the reporting month.

You still have to pay, because the notary, who has certified the contract for the alienation of the property, sends the information about the transaction to the tax office at your tax address within the deadlines established by law for the reporting quarter.

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All the above-mentioned payments are calculated on the basis of the value of the object of the sale and purchase transaction specified by agreement of the parties in the contract. The announced price of real estate cannot be lower than the estimated value calculated by the appropriate authorized body (a private expert company with a license to carry out valuation work).

On matters of tax charges is not superfluous to contact lawyers. The specialist will check the legality of the calculations, check the correctness of the accompanying documentation, and often help reduce the amount of expenses for taxes when buying and selling an apartment. In addition, there are legal companies that accompany all stages of real estate transactions in the complex - from choosing an object to obtaining ownership. Naturally, such services as a whole will cost you less and significantly speed up the process of buying / selling. At the same time, you will also minimize all possible risks.

In conclusion, I would like to share the experience of our neighbors - in Russia there is such a thing as a tax deduction. In fact, this is a partial compensation by the state of the costs associated with the acquisition, repair and decoration of housing.

Each officially working buyer can issue a income tax return, which is 13% of the value of the property specified in the contract. When buying a property in shared ownership, compensation for minor children is received by their parents; for joint ownership, all owners receive a tax deduction in equal shares.

The right to receive a tax deduction is limited by the amount of the purchase - no more than 3 million rubles for all apartments purchased (except for a mortgage, you can receive a benefit for it once), and also you cannot return a part of the funds if the property is acquired for commercial purposes.

We hope that in the near future Ukraine will introduce a similar program and our fellow citizens will be able to at least partially reduce the cost of buying a home.