Land valuation rules will change in Ukraine: how will this affect taxes and rent?

The Cabinet of Ministers of Ukraine has updated the rules for the normative monetary valuation of land, which will directly affect the amount of land tax, rent and the cost of land plots in different regions of the country.

Corresponding changes have been made to the basic Methodology for the normative monetary valuation of land.

The cost of land will depend on the number of population

The government has updated the scale of standards for capitalized rental income, which determines the basic cost of one square meter of land.

Now the price of land will more accurately depend on the real number of population in a particular settlement.

According to the new rules:

in the smallest villages and settlements with a population of up to 200 people, the minimum normative value will be 58 UAH per square meter;

in cities with a population of over 1.5 million inhabitants, the figure will increase to 1,302 UAH per square meter.

The government also increased the demographic threshold in the Methodology from 1 million to 1.5 million inhabitants. This will allow for a more accurate assessment of land in large cities and agglomerations and avoid sharp price jumps during revaluation.

What will change for agricultural land

The updated rules also provide for the possibility of adjusting the assessment of agricultural land based on new soil studies.

However, the government has established a number of restrictions:

It is prohibited to conduct additional surveys on lands where especially valuable soils have already been identified;

The new results will have legal force only after the official entry of the normative monetary assessment into the technical documentation.
Why is the system being changed

The government calls the main goal of the innovations the elimination of artificial “averaging” of land values ​​within large territorial communities.

The Cabinet of Ministers believes that the new system will allow for a more accurate consideration of the economic potential of each settlement – from a small village to a large metropolis.

Experts note that updating the regulatory monetary assessment may affect not only the land tax, but also the rent, the cost of executing transactions, and other payments related to land.