According to para.172.1of the Tax Code of Ukraine of 02.12.2010, № 2755-VI (hereinafter - TCU) income received by the taxpayer from the sale (exchange) no more than once during the reporting tax year residential house, apartment or its part, room, garden (dacha) cottage (including land plot where are situated such facilities,as well asservice buildings and amenities located on such a land) and also the land plot, which does not exceed the norms of free transfer defined by Art. 121 of the Land Code of Ukraine (hereinafter - LCU) depending on its purpose and under conditions of stay of such property owned by the taxpayer for more than three years,is not the subject to the income tax.
The norms of free transfer of land plots to citizens of lands of state and community property are determined in accordance with paragraph 1 of Art.121 of LCU in the following sizes:
- for gardening - not more than 0.12 hectares;
- for construction and maintenance of residential buildings, commercial buildings (subsidiary plot) in villages - not more than 0.25 hectares, in small towns - not more than 0.15 hectares, in cities - not more than 0.10 hectares;
- for individual dacha projects – not more than 0.10 hectares.
Condition for stay of such property owned by the taxpayer for more than three years does not apply to property received by such taxpayer in the inheritance.
Income from the alienation of service buildings and amenities located on one area with a residential or garden (dacha) cottage and to be sold together with it, should not be separately defined for tax purposes.
When selling a property by the owner - a resident of Ukraine more than once a year or property he/she owns less than 3 years, the personal income tax is to be paid at the rate of 5% (paragraph 2 of Art. 167 of TCU).
When selling (exchange) of real estate, the income tax of the non-resident from the sale (exchange) is to be paid in the same order as of the residents, but at 15% of the income and/or 20% of income amount that exceeds tenfold minimum wage established on 1 January of this year (para. 172.9 of TCU).
How to determine the income for tax purposes from property sale?
Revenue from the property sale should be determined by the price specified in purchase and sale contract but not less than the appraised value of the property (Art. 172 of TCU).
If the price of property in purchase and sale contract (exchange) is higher than appraised value, the tax should be calculated under the price specified in the contract.
If the price of property in purchase and sale contract (exchange) is lower than appraised value, the tax should be calculated under appraised value.
The tax amount should be calculated independently by the seller of property and paid through the bank to the notarial certificate of purchase and sale contract (exchange).
The war tax. From 01.01.15 all the incomes of individuals, which are the subject to income tax, are to be the subject to the war tax (sub-para.1.2 of para.161 of subsection 10 of sec. XX of TCU).
Thus, the war tax at the rate of 1.5% should be withheld from the individual income of property sale.
