Owners of real estate with "excessive square meters" and expensive cars have to pay the so-called luxury tax. Find out who exactly has to pay this tax, what rates apply in 2024, and who can get an exemption

Legal advice on the acquisition and registration of real estate in Ukraine

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The "luxury tax" is an unofficial name for two taxes: real estate and transportation taxes. The funds from these taxes go to the local budget. Let's look at who has to pay for real estate and when.

Who pays real estate tax?

Real estate tax must be paid if you own:

– an apartment with an area of more than 60 square meters

– a private house with an area of more than 120 square meters

– an apartment and a house with a total area of more than 180 square meters.

In this case, only the excess square meters are subject to taxation. For example, if an apartment has an area of 80 square meters, then the tax must be paid for 20 square meters.

Read this article to find out how to bequeath real estate in Ukraine while abroad.

Tax rates

The tax rate depends on the region where the property is located. You can check its amount on the website of the State Tax Service of Ukraine. Note that in 2024, the maximum regional rate is 106.50 UAH for each excess square meter.

Important! For an apartment with an area of more than 300 square meters or a house with an area of more than 500 square meters, the owner is obliged to pay an additional UAH 25,000 per year for such a property.

Read here how many years you need to work to buy an apartment in Ukraine.

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When do I have to pay the tax?

1. Individuals. The obligation to pay the tax arises only upon receipt of a tax notice-decision from the tax service. The method of receipt is by registered letter with acknowledgment of receipt sent to the taxpayer's tax address or by hand delivery to the taxpayer or his/her representative. Until July 1, 2024, the owners of the above-mentioned property may receive a tax notice. After receiving the notice, the owner has 60 days to pay the tax.

2. Legal entities. They calculate the tax on their own and pay it in advance on a quarterly basis by the 30th day of the month following the reporting quarter. These amounts are reflected in the annual tax return.

Who may not pay the tax?

The legislation exempts from the "luxury tax" citizens whose real estate is located in the areas of military operations or in the temporarily occupied territory. Owners of destroyed or heavily damaged housing due to the war are also exempt from the tax. Other categories that may not pay the tax:

– large families;

– single mothers raising orphans or children with disabilities

– ATO participants;

– educational institutions;

– religious organizations.

Transport tax

Vehicle tax is paid for cars whose value exceeds 375 minimum wages (over UAH 2.663 million). The transport tax rate is UAH 25 thousand per car. Cars not older than 2 years or some models not older than 5 years are subject to taxation. 

This year, 184 car models are subject to the tax, including: Aston Martin, Audi, Bentley, BMW, Cadillac, Jaguar, Land Rover, Lexus, Maserati, Mercedes-Benz, Porsche, Rivian, Tesla. The full list can be found on the website of the Ministry of Economy of Ukraine.

If the car is purchased in the middle of the year, the tax is paid proportionally for the months when the car was owned by the taxpayer.

Please note! Volodymyr Zelenskyy recently signed a law that will change the terms of car insurance. Read more about it in this article.

We remind you! Real estate prices in Ukraine continue to show an upward trend, especially in large cities and their regions. Demand for apartments and houses remains consistently high. However, depending on the region and location, apartment prices can vary significantly. Read more about how much it will cost to buy a home in Ukraine in 2024 in our previous article.

Want to know more? Read the latest news and useful materials about Ukraine and the world in the News section.

Ihor Usyk is the Head of Legal Department at Visit Ukraine

Buying and leasing real estate involves a number of risks, and it is therefore important to ensure that the transaction is safe and profitable for the new owner. Our team of qualified lawyers can support your transactions and help you with the audit of the purchase and sale agreement, residential or office lease agreements, alienation of real estate, registration of residence and other issues. You can request a specialist consultation by following this link.