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Land market starts to work in Ukraine

Source : 112 Ukraine

If demands of the law on the concentration of lands are violated, the land can be seized on the decision of the court
08:48, 1 July 2021

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Today, on July 1, the market of the agricultural land is launched in Ukraine; the moratorium on sale was canceled. It acted since 1992.

The land reform will be implemented gradually.

Who can buy Ukrainian land?

According to the law, ordinary Ukrainians can become land market participants.

Legal entities, directly founded by citizens of Ukraine, the state and territorial communities shall become land sale market participants only since 2024.

If you took a loan secured by land, then credit institutions and banks will be able to obtain it as ownership. Such land plots must be alienated by the aforementioned institutions at bidding within two years from the date of acquisition of ownership.

Can foreigners buy land in Ukraine?

Foreigners and legal entities, the founders or ultimate beneficiaries of which are foreigners, will be able to buy land only subject to approval by referendum. In all other cases, it is not possible to acquire property rights.

But even if a referendum is held, Ukraine will be prohibited from making transactions, to which foreigners or legal entities founded by foreign citizens are parties, with agricultural land in an area 50 km from the state border.

Who can’t buy agricultural land in Ukraine?

The right of ownership is prohibited for:

  • legal entities whose participants or beneficiaries are foreigners – lands of state and communal ownership, as well as lands, allocated to unit owners and located closer than 50 km from the state border of Ukraine (except for the state border that runs by sea);
  • legal entities whose participants or ultimate beneficiaries are citizens of other countries;
  • persons who belonged or belong to terrorist organizations;
  • legal entities whose participants or beneficiaries are foreign states;
  • legal entities if it is impossible to establish their ultimate beneficiary;
  • legal entities whose beneficiaries are registered in offshore zones;
  • individuals and legal entities in respect of which sanctions have been applied;
  • legal entities registered in the states included in the list of those that do not cooperate in the field of combating the laundering of proceeds from crime.

How much land can one buy?

In the first two years, there will be certain restrictions on the total area of ​​agricultural land owned by a citizen - it cannot exceed 100 hectares. This shall be true for individuals (as legal entities are banned from buying agricultural land). This restriction shall be applied to those citizens, who obtained land before this law entered its force.

Since 2024, a legal entity shall be able to buy land. Also, since 2024 it will be allowed to buy up to 10,000 hectares in one hand.

Also in the first two years, a ban on the sale of state land will enter its force. 

If the requirements of the law regarding the concentration of land in one hand are violated, the land may be confiscated by court order.

How to buy and sell land?

The bill provides that until January 1, 2030, the land selling price cannot be lower than its normative estimate.

In the event of the sale of a land plot, the tenant shall have the preemptive right to acquire it if he is ready to pay the corresponding price, and in the case of an auction, if the tenant is ready to pay the highest price offered during the auction.

Citizens who have the right for permanent (lifetime) use, as well as tenants who reissued the right to permanent use with respect to plots of land, have the right to redeem land ownership by installments up to five years at a price equal to the normative monetary value of plots, without land tendering.

Payments are carried out only in non-cash forms.

Also, acquiring the right of ownership under reimbursable agreements in the absence of documents confirming the sources of origin of funds or other assets through which such a right is acquired would be prohibited.

What would be the price of the land?

According to forecasts of the Ministry of Economic Development, Trade and Agriculture, one hectare of land in Ukraine will cost over 2,000 USD.

According to the forecasts of Prime Minister of Ukraine Denys Shmygal, the cost of land will increase from two to five times during the next 5-10 years. 

It is possible to purchase or sell land online

It will be possible to sell the land plot in state or communal ownership or rights for it, such as lease or superficies through electronic auctions. Such a law will come into force on July 6.

Bidding will be held in a single electronic trading system in the form of an electronic auction in real-time on the Internet, which will result in a contract of sale, lease, superficies of land with the winner of the land auction.

All lots must have photos of the land and contain information about the person who has a preemptive right to purchase the land.

The amount of the guarantee fee may not be less than 30% of the starting price of the land sale or the starting amount of the annual fee for the use of the land. It is proposed to change the conditions of non-refund of guarantee fees.

For agricultural lands of state or communal ownership, the starting price equals the code-prescribed monetary value, while other lands of state or communal ownership cannot cost less than it is stated in the expert monetary value of the land plot.

One lot can have only one land plot or rights for it.

Until the end of bidding, the information about the participants cannot be disclosed.

The bidding is held with the presence of at least two registered partakers.

The results of the land bidding on each lot will be stated in the electronic system and United state portal on land bidding.

What Ukrainians need to have to sell the land

For registration of the property rights, such documents are needed:

  • extract from the state land cadaster;
  • copy and original of passport and personal number;
  • confirmation of payment of the administration fee;
  • document on rights for the plot.

Moreover, the land plot should have the cadastral number that can be checked on the Public cadastre map of Ukraine.

One of the terms is the registration of the ownership right in the State register of real rights for estate property. Then, a person should get the paper or electronic extract from the State register.

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