Luxury tax 2025 in Ukraine
The "luxury tax" in Ukraine is an unofficial name for two property taxes: the tax on ownership of real estate other than a land plot (Article 266 of the Tax Code) and the transport tax (Article 267 of the Tax Code). The "luxury tax" is a local tax: its rates are set by local councils, which also receive funds from taxpayers. Let's take a closer look at the cases when this tax must be paid, who is exempt from it, when and in what amount the payment should be made.
What falls under the luxury tax
To understand whether you need to pay the luxury tax, you need to understand what real estate and cars are subject to taxation.
Real estate tax
Which real estate will have to pay tax:
apartments with an area of more than 60 m²;
houses with a total area of more than 120 m²;
an apartment and a house with a total area of 180 m² or more.
The tax is charged only on those meters that are not included in the preferential rate. For example, if an owner owns a 90-square-meter apartment, he or she will have to pay for 30 square meters, as they exceed the 60-square-meter exemption. If, for example, the owner owns both an apartment (119 square meters) and a house (97 square meters), then these figures must first be summed up, meaning that the owner will have 216 square meters of real estate. As a result, he or she will have to pay only for 36 m², since the preferential 180 m² is not paid for.
Really large apartments and houses are worth mentioning separately. If the area of an apartment exceeds 300 m² and the area of a house exceeds 500 m², you will have to pay an additional UAH 25,000 for each property.
Vehicle tax
Vehicle tax is payable only if the vehicle is less than 2 years old or 5 years old, depending on the model. The tax payment also depends on the value of the car. The tax is payable only if the average market price for a car in 2025 exceeds 375 minimum wages (as of January 1, 2025, it is UAH 8,000), i.e. UAH 3,000,000.
The list of cars subject to taxation includes such models as BMW, Porsche, Tesla, Audi, Land Rover, Mercedes-Benz, Lexus, etc. You can see the entire list of cars subject to the tax on the website of the Ministry of Economy of Ukraine.
The transport tax rate does not depend on the year of manufacture of the car or its real or average market value. It is fixed and amounts to UAH 25,000 for each vehicle owned.
Who has the right not to pay the luxury tax
According to the current legislation, certain categories of citizens are exempt from paying the "luxury tax". When is it possible not to pay real estate tax?
If the real estate is located in a war zone or in the temporarily occupied territory;
if the apartment or house is destroyed/severely damaged as a result of the war;
if the owner of the property has 3 or more children and has the status of a large family;
if the owner is a single mother/father raising orphans or children with disabilities;
if the owner has the status of an ATO participant;
if it is an educational institution or religious organization.
Everyone else will have to pay real estate tax. Pensioners are also not exempt from paying the "luxury tax" unless they fall into other exempt categories.
When is the luxury tax due
The timing of the payment of real estate tax and transport tax depends on whether the payer is an individual or a legal entity. For example, individuals are obliged to pay property or car tax only upon receipt of a tax assessment notice (TAN) from the tax service. This notification is sent to the recipient by registered mail with acknowledgment of receipt to the taxpayer's tax address.
The Tax Service sends tax assessment notices to individuals on the payment of real estate tax by July 1 of the current year for the previous year. For example, if the tax is due for 2024, the taxpayer must wait until July 1, 2025, to receive the notification. After receiving this notification, the individual has 60 days to pay the tax.
If the notification is not received by July 1, it may mean that the local council has not imposed the real estate tax. Some local authorities impose the real estate tax only on legal entities or increase the preferential rate based on the square footage of the dwelling. However, it is worth inquiring about this with the tax service to eliminate the risk that the notification simply did not reach the addressee for some reason.
The situation with the transport tax is a bit different. The tax office also sends a notification to an individual by July 1, 2025, but the tax is paid for 2025, not for the previous year, as in the case of real estate. The car tax must also be paid within 60 days of receiving the notice. If the "luxury tax" is not paid on time, the taxpayer will be charged a debt.
Legal entities pay the luxury tax on a different basis. They calculate the tax on their own, i.e., they do not receive any notifications, and then pay the tax in advance on a quarterly basis by the 30th day of the month following the reporting quarter. The paid tax amounts must be included in the annual tax return.
How to calculate the luxury tax
The real estate tax rate is calculated as a percentage of the minimum wage established as of January 1 of the reporting year. This rate cannot exceed 1.5% per 1 m². If the tax is paid in 2025, it means that the reporting year is 2024 and you should be guided by the minimum wage as of January 1, 2024. As of January 1, 2024, it amounted to UAH 7100. Accordingly, the maximum rate cannot exceed UAH 106.5.
The rate does not have to be 1.5%, it can be 1% or lower. The rate is set by the village, town or city council. If the property is located in a village in the Kyiv region, you need to focus on the village council. You can find out the rate in your region on the website of the State Tax Service of Ukraine.
To calculate the amount of tax, you need to subtract the preferential rate from the available housing area and multiply the remaining squares by the rate for your region. This will be the amount of tax to be paid: it must match the amount in the TIU. If we are talking about large real estate, it is important not to forget to add the fixed UAH 25,000.
There is no need to calculate the transport tax, as it is fixed at UAH 25,000. The only caveat is that if the car was purchased in the middle of the year, then the tax is paid only for the months when the car was already registered to the new owner.
