Every year, owners of residential and commercial real estate of a certain area are obliged to pay a tax. The amount of the real estate tax is determined by local authorities. Who is obliged to pay this tax, who is exempt from it, what amount must be paid in 2024 and what awaits those who do not make the payment on time, we tell you in this article.
Who pays real estate tax?
The "luxury tax", as real estate tax is unofficially called, must be paid by all owners who own:
- an apartment with a total area of more than 60 m²;
- a residential building with an area of more than 120 m²;
- several residential properties - an apartment and a house with a total area of more than 180 m².
The tax is assessed not on the entire area of the apartment or house, but only on the part that exceeds the previously mentioned limits.
There are some nuances in the situation when an apartment or house has several owners. If the property is owned by several people and is divided in kind, each owner must pay his or her share of the real estate tax. If the residential property is jointly owned by several people, but is not divided in kind, one of the owners must pay the tax upon agreement of the other owners.
Pensioners are also obliged to pay the excess area tax annually. The age of the owner of an apartment or house does not affect either the obligation to pay the tax or its amount. No benefits are granted to pensioners.
If the real estate is owned by a minor, the responsibility for paying the tax lies with his/her parents or guardians.
Foreign citizens who own real estate with an area of over 60 m² for apartments and over 120 m² for houses in Ukraine are obliged to pay tax annually on a common basis.
Who is exempted from paying real estate tax?
There are several categories of people who may not pay estate tax. Here's what the list of exempted people looked like until 2022:
- Large families and foster families raising 5 or more children;
- orphans, children deprived of parental care, children with disabilities raised by single mothers (fathers);
- ATO participants;
- educational institutions;
- religious societies.
In wartime, the list of those who may not pay real estate tax has expanded. In 2024, owners of properties that have become uninhabitable due to military operations are also exempt from tax. Also, owners of real estate that is located on the territory under occupation of the Russian Federation or is located in an area where active hostilities are being or have been conducted are not obliged to pay.
How to calculate the amount of real estate tax?
The amount of tax is determined individually, taking into account the tax rate established by local authorities. The rate is determined in accordance with the type of objects and their location as a percentage of the minimum wage declared as of January 1 of the reporting year, and it cannot exceed 1.5% per square meter.
You can find out the established rate in your region on the official website of the tax service. In 2024, the tax is assessed for the reporting year 2023, that is, the rate should be calculated taking into account the minimum wage established as of January 1, 2023. On this date, it amounted to UAH 6,700. Based on this, the rate per square meter cannot be more than 100.5 UAH (6700 x 1.5%).
To calculate the amount of tax, you need to use the following formula. From the total area, subtract the preferential area, and multiply the resulting figure by the tax rate. The result will be the amount to be paid.
For example, if a person owns an apartment with an area of 119 m², he will have to pay tax only for 59 m² (119 - 60 = 59). You can calculate the exact amount of tax using the official calculator available on the website of the State Tax Service of Ukraine. The system is convenient because it allows you to take into account several objects at once and save them.
An important nuance - if the owner owns an apartment with an area of more than 300 m² and/or a residential house with an area of more than 500 m², the amount of tax is increased by UAH 25,000 per year for each object.
If the owner does not agree with the amount of the assessed tax, he can apply to the tax authority at the place of registration with the original documents of ownership of real estate. If an error is discovered, the tax authority will recalculate the amount of tax and deliver a new tax notice to the owner of the residential property.
When do I have to pay real estate tax?
Before July 1, a property owner must receive a message from the tax office stating how much tax he or she must pay. So you don't have to look up the current rate and minimum wage on your own and do the calculation.
Private property owners must pay the tax within 60 days from the date of service of the notice from the tax office. In 2024, the tax is paid for the reporting year 2023, in 2025 residential property owners will pay the tax for the reporting year 2024, etc.
What is the penalty for non-payment of real estate tax?
If a taxpayer fails to pay real estate tax within the prescribed time limits, a fine may await the taxpayer. If the luxury tax payment is delayed for up to 30 calendar days, the penalty will be 5% of the amount owed. If the delay is longer than 30 calendar days, a fine of 10% of the tax amount will be imposed.
In case of non-payment of the amount of the debt and the penalty, the information is transferred to the executive service for seizure of property. Experts state that if tax is not paid due to a state of emergency or martial law, no penalty is charged and the fine is canceled.
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