Own property? Pay the tax. Here’s what Ukrainians need to know about when and how much they owe for real estate.
Paying for "Extra" Meters: How Property Tax Will Be Calculated in 2025
Daniil Tryasov, a lawyer at Attorneys at Law "Leshchenko&partners," explains that property owners are assessed an annual tax determined by the local rural, settlement, or city council based on the location (zoning) and types of these properties. The rate does not exceed 1.5% of the minimum wage set by law as of January 1 of the reporting (tax) year, for each square meter of the tax base.
"Information about the tax rate can be obtained directly from the relevant council or on the official website of that council. The decision to establish property tax rates must be publicly announced," noted Roman Mikhailovskiy, a lawyer and partner at SLA Attorneys.
The basic period for which an individual property owner pays property tax is the calendar year.
So, if notifications for tax payment for 2024 are currently being sent out, the maximum tax rate should not exceed 106.5 UAH per square meter. "In 2025, property owners will have to pay property tax based on the minimum wage, which was 7100 UAH as of 01.01.2024, meaning the maximum tax amount is 106.5 UAH (7100*1.5%) per square meter," noted Denis Bekhalo, a legal assistant in the Tax Law Practice at MORIS. However, if the notification is for tax payment for 2023, the calculation will be based on the minimum wage of 6700 UAH, resulting in a maximum tax amount of 100.5 UAH per square meter.
1 However, it is essential to understand that not the entire area of the property is taxed, but only the part that exceeds the limits set by law. The minimum non-taxable area is established by Article 266.4.1 of the Tax Code of Ukraine.
Tax base for residential properties in 2025:
- for apartments — 60 square meters;
- for residential houses — 120 square meters;
- for various types of residential properties — 180 square meters.
"In other words, individuals who own residential properties must pay tax if the area of their property exceeds the established limits: — for apartments — 60 sq. m; — for private houses — 120 sq. m," says Anna Kirpach, a lawyer at Verity Group. In 2025, the property tax amount will increase, as the minimum wage as of January 1, 2025, will be 8000 UAH, which means, as Anna Kirpach pointed out, the maximum tax rates for property tax calculation in 2025 should not exceed 120 UAH per sq.m. However, citizens will receive information about the tax for 2025 from the tax authorities next year, as mentioned earlier, until July 2025, the tax authorities will send property owners information about the need to pay tax for the previous year.
The amount of property tax depends on the number of "extra" meters and the tax rate set by local authorities.
Property tax is calculated quite simply: the total area of the owned property is reduced by the area that is not subject to taxation. For example, if a citizen owns an apartment of 85 square meters, they must pay tax for the extra 25 sq.m. If the local authorities have set a rate of 100.5 UAH per meter in the region where the property is located, the notification from the tax authorities will indicate a tax obligation of 2512.5 UAH.
Penalties for Late Payment: When to Pay Property Tax
The tax obligation for the reporting year must be paid by individuals within 60 days from the date of receiving the tax notification-decision. If the tax authorities only sent the notification in January 2025 for the 2023 tax, no penalties will apply. However, the recipient must pay the tax within 60 days after receiving the letter from the State Tax Service. "If the controlling body did not send (deliver) the tax notification-decision within the specified time frame, individuals are exempt from the liability provided by this Code for late payment of tax obligations," says Daniil Tryasov.
Tax authorities have the right to impose penalties on amounts of taxes and fees paid late. The property tax, other than for land, is no exception.
For delays of up to 30 calendar days, penalties of 5% of the tax debt amount apply, while delays exceeding 30 days incur a 10% penalty on the debt amount. So, if a citizen owes, for example, 2000 UAH in taxes, then if payment is delayed beyond 30 days after the legally established 60 days, the debt will amount to 2200 UAH.
2 "If the tax is paid late, then after the deadlines for payment have passed, interest will accrue on the debt amount at a rate of 120% of the annual NBU rate effective on the day the tax debt arose. Tax authorities have the right to go to court with a claim for the recovery of the tax debt amount from the taxpayer. Recovery of tax debt by court decision is carried out by the state enforcement service in accordance with the Law of Ukraine "On Enforcement Proceedings." This means that enforced recovery of tax debts is only possible based on a corresponding court decision and an enforcement document issued based on such a court decision. The toolkit of executors includes the possibility of seizing accounts, enforced collection, and sale of property within the framework of enforcement proceedings," says Roman Mikhailovskiy.
3 Ivan Marinyuk noted that if a person does not receive mail because they do not reside at that address or have not notified the tax authorities of a change in registration, the tax notification-decision is considered delivered on the date indicated by the postal service in the delivery notice stating the reason for non-delivery. From that day, the 60-day period for tax payment begins. "In addition, we recommend periodically checking the taxpayer's electronic cabinet and reviewing the 'Status of Settlement with the Budget' to avoid surprises such as a tax lien on property or a tax demand for the recovery of tax debt along with penalties or a lawsuit for the recovery of money due to tax debt," says the lawyer.
To Pay or Not to Pay: Under What Conditions Property Owners Are Exempt from Paying Tax
In various territorial communities and cities of Ukraine, both the amount of tax to be paid and the area subject to taxation may differ. "Some rural, settlement, and city councils, as well as councils of united territorial communities, not only established their own property tax amounts, different from land tax, but also modified (increased) the maximum area of properties exempt from taxation, and approved lists of properties that are not subject to taxation (established their own tax exemptions). It is worth noting that, for example, individual (cottage) residential houses, garden or dacha houses that have been put into operation but for which ownership rights have not been formalized (registered) in the prescribed manner are not objects of taxation," emphasized Daniil Tryasov.
Therefore, to learn the rules for paying property tax or the applicable exemptions, it is necessary to contact local self-government bodies (or study the information published by local authorities on official websites and social networks).
4 "Every year until February 1 of the current year, rural, settlement, and city councils submit information about exemptions to the tax inspection at the location of the residential property," noted Roman Mikhailovskiy.
Citizens who own property in occupied territories, or those whose property has been destroyed as a result of Russian aggression, are not required to pay property tax. According to subparagraph 69.22 of paragraph 69 of subsection 10 of section XX "Transitional Provisions" of the Tax Code of Ukraine, no property tax is assessed or paid for destroyed residential and/or non-residential properties due to combat actions, terrorist acts, diversions caused by armed aggression of the Russian Federation against Ukraine, based on data from the State Register of property damaged and destroyed as a result of combat actions, terrorist acts, and diversions caused by armed aggression of the Russian Federation against Ukraine.
To learn the rules for paying property tax or the applicable exemptions, it is necessary to contact local self-government bodies.
If a taxpayer receives a tax notification-decision for property tax on properties that have been destroyed as a result of Russian aggression or located in temporarily occupied territories, it is advisable to contact the tax inspection with written objections, says Roman Mikhailovskiy.
5 According to Ivan Marinyuk, in such cases, it is worth contacting the tax inspector who issued the tax notification (the letters specify the responsible person) and providing explanations and documents that refute the legality of the tax obligations assessed.