Today, Ukraine’s parliament has opened the land market - 259 MPs voted for that.
A moratorium on the sale of land appeared back in 2001. January 18, the Verkhovna Rada adopted Law No. 2242-III, which established that, temporarily, until the Land Code is adopted, the landowners cannot sell, donate or otherwise alienate it. But they can inherit it and sell them for state and public needs.
Parliament adopted the Land Code No. 2768-III on October 25 of the same year. According to the code, until January 1, 2005, it was impossible to sell or alienate land for farming and shares (exchange, inheritance, and withdrawal for public purposes were allowed).
This temporary ban was extended ten times in Ukraine’s history (in 2004, 2006, 2008, 2010, 2011, 2012, 2015, 2016, 2017, and 2018).
In September 2019, President of Ukraine Volodymyr Zelensky instructed the Verkhovna Rada to cancel the moratorium on the sale of land until December 2019 and pass a bill to open the land market.
The opening of the land market was scandalous. The idea of Zelensky’s team met with resistance among a number of political forces opposing the sale of land, while agrarians held rallies under the Verkhovna Rada and blocked state highways in protest.
One of the most controversial issues was the issue of the possible sale of land to foreigners. In this regard, Zelensky said Ukrainian people would make the decision on the possible sale of land to foreigners via a referendum mechanism.
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.
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.
The law will enter into force on July 1, 2021, except Article 2, which enters its force on the day of this law is published.