New rules of tax liability of real estate in 2007

From the first of January 2007 were changes in the taxation of incomes from selling property, receiving by Ukrainian citizen or foreigners.

According to the Final conditions of Law of Ukraine “About the tax from the incomes of physical person” and corresponded changes which were made in it, working of the article 11, regulated the order of income taxation from the selling of property were stopped on 2004-2006. Thus, incomes received from selling and exchange the property during 2004-2006 is not beyond taxation.

According to the same law, the object of taxation is any income which was added or paid off in favor of payer of the tax during the current tax period, to which correspond incomes from property sales which are on the territory of Ukraine.

From the first January, income which citizen of Ukraine received from the sale (not often than one time during current year) of residential house, flat or part of flat, room, garden house (including plot where these objects are situated) are not liable for tax, if total area of such residential house, flat or part of the flat, room, garden house is not more than 1000 sq. ft.

If the square of the residential property is more than 1000 sq. ft. then the part of incomes, which are proportional to the sum of such exceeding, is liable for tax for Ukrainian citizens by rate 1% from the cost of this object.
The income received by citizen of Ukraine from the sale more then one object of property or from the sale of other object of not-resident property (during the current year) is liable for tax by rate 5%.

As for the incomes received by not-residents from sale of the property in Ukraine which was their according to the right of the property: incomes of foreigners are liable for tax by rules which were established for residents but by the rate 30% concerning other incomes, added in the favor of not-resident.

While selling the property by not-resident, not often than one time during current year, residential house, flat or part of the flat, room, garden house, receiving the income from such sale is nor liable for tax, if the total area of the residential object is not more than 1000 sq. ft. In case of increasing this square, not-resident should pay 30% from the part of the income proportionally to exceeding.
Each second and following sales of residential and not-residential property (including land) during the current year will be liable for tax by not-resident by rate 30%.

Income from the property sale is determined from the price which is in the contract purchase and sale but not less than estimation cost, which is calculated by Bureau of Technical Inventory.

The sum of the tax is paid by the seller to notary certification of contracts purchase and sale in bank, the sum is defined by payer and checked by notary. Information about each conducting contract purchase and sale the property and direct by notary to the tax agency by notary address.