Bureau of technical supervision

Revenues to local budgets from the property tax for 2015

In 2015, the amount of property tax paid to local budgets totalled 745,7 million USD. This is 0.6% of revenues of local budgets or 0.04% of GDP in 2015. In other countries the property tax is on average 1% of GDP and about 10% of the revenues of the consolidated budget.

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Real estate.

A quarter of the tax was collected in Kiev, another half — in the cities of regional importance. The revenues of numerous cities of regional value, rural and small local was around 200 million USD. However, the incomes of these budgets the share of the property tax was the most significant and reached 1.2-1.9 percent.

“The real estate tax are very promising and correct. People with the Soviet past it is fundamentally not like it, but it does one thing very right — very clearly conveys the message that property entails obligations”, — said Dmytro Boyarchuk, Executive Director of the Center for social and economic research CASE Ukraine.

93% of the amount of tax on real estate (except land), paid by legal entities. The amount of tax determined interest rate (2% minimum wage per square meter) and the presence of commercial space (hotels, shopping centers and stores, warehouses, markets, public catering establishments, service stations, offices, and Parking garages and the like).

Individuals throughout Ukraine paid UAH 50.5 million of real estate tax. Most funds collected in the Ivano-Frankivsk oblast and Kyiv — 2.1 million USD and 1 million USD respectively.

The reasons for such charges several. First, from tax exempt housing area of 120 square meters for apartments and 250 square meters for houses. Secondly, the failure of the taxpayers to undergo the process of verification of property rights was not for them there are no consequences. Thirdly, the criterion of taxation has remained the area, not the value of the property. To order act on the hidden work in construction can have certified engineer of technical supervision.

In 2016, net of tax of physical persons will be increased to 862 million USD due to the revision of benefits (to be exempted from the payment of tax will be the housing area of 60 square meters for apartments and 120 square meters for houses) and increase marginal tax rates are from 2 to 3% per 1 sq. m.

Recall, the real estate tax in Ukraine, the local authorities started to apply in 2015. This tax is imposed on all EU countries, except Ireland and Malta, and is predominantly a local tax.