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Valuation Of Lands

Valuation Of Lands

Estimated value of land valuation for selling or gifting: from 1000 UAH.

The cost of the work for presenting in court, as well as for non-standard sites (for example, large area or commercial purpose) is determined individually.

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Land valuation for individuals

The most common case, when it is necessary to appeal to the land appraiser, is the purchase and sale of real estate. Most people are accustomed to believe that real estate is called a variety of buildings on the site. In fact, by definition, real estate is primarily land, whether or not there are improvements. It is important to note that in most cases of sale of residential or dacha houses, the notary will require you to provide two separate documents: on land and on the house. This is due to the fact that in our country the title documents for the buildings and the area live as if separate from each other (two different documents). There are exceptions to this rule, however. You can read about them in our article about when the land valuation may be optional.

So, for what purpose do individuals order this service?

  • for the purpose of sales, gifts, and civil contracts of other types (such as lifetime maintenance);
  • in the execution of inheritance, both in the standard notarial procedure and through the court decision;
  • for presenting in court (in cases of property disputes for the division of property and payment of court fees);
  • transfer of land area on pledge (mortgage);

What documents are needed from the customer?

The main information that the appraiser needs is in the following documents:

  1. documents related to title (state act, title deed, sale or gift contract, court decision);
  2. certificate of cadastral number assignment (mandatory in the case of an old state act);
  3. owner’s passport or tax code.

All other information, such as restrictions or rental agreements, is subject to availability.

What taxes must be paid when selling land?

Land taxes

There are certain conditions for the sale of land. If you include them, you can sell your property without paying a penny of tax or a mandatory payment. These conditions (norms) are detailed in article 121 of the Land Code of Ukraine. These include site basic parameters such as area and purpose. It is also important to know that these rules also fall under the terms of land ownership (less than or more than three years), as well as the number of sales transactions for one year (paragraph 172.1 of the Tax Code of Ukraine). According to this item, income received from the sale or exchange is not taxed more than once during the reporting tax year.

What are the mandatory requirements (standards) will to be considered in a tabular format:

PurposeLand area
FarmingThe amount of the land share determined for members of agricultural enterprises located in the territory of the joint territorial community where the farm is located. If several agricultural enterprises are located on the territory, the size of the land share is determined as the average for these enterprises. If there are no agricultural enterprises on the territory of the relevant council, the size of the land share is determined as the average by region
Home farming (Household plot)not more than 2,0 hectares
Gardeningnot more than 0,12 hectares
Construction and upkeeping of residential buildings, outbuildings and structures
  • in villages – not more than 0,25 hectares;
  • in settlements – not more than 0,15 hectares;
  • in the cities – not more than 0,1 hectares.
Individual cottage constructionnot more than 0,1 hectares
Construction of individual garagesnot more than 0,1 hectares

If any of the conditions mentioned above are not met, then the purchase transaction will fall under 5% of the personal income tax (PIT) and 1,5% of the military fee that the seller will have to pay.

It should be noted that when re-registration of the real estate usually there is also a pension fee, but with the land the situation is different – you have nothing to pay! Because according to Tax Code para. 138.3.3 parcels do not fall under the definition of real estate (do not refer to buildings). And in the Law of Ukraine «About fee for mandatory state pension insurance», pension fee is charged only with that property, which is listed in the Tax Code. So this mandatory payment can be forgotten 🙂

From which evaluation needed to pay taxes: from normal one or expert monetary?

We are going to consider, for what purposes these types of evaluation are needed and when.

The most common case of application of expert land valuation is the registration of a notary’s purchase and sale contract. Taxes and mandatory payments will have to be paid based on the price specified in the sales contract. But not below the market value, which appraiser will determine.

Also, expert monetary estimation is needed for land areas, which are in the state or municipal property (Law of Ukraine, article 13, part 2 of «About the land valuation»). It is used in cases for selling, insurance, transfer to mortgage, when entering an area in the charter fund of an economic company, in reorganization, bankruptcy or liquidation of an enterprise, determination of the amount of damage to owners, as well as by court decision.

Standard monetary evaluation is commonly used to determine the rent on land areas and communal land and to calculate land tax.

Determining the value of land parcels for legal entities

Land parcels of legal entities

Working with a legal entity in the context of an expert money assessment of the land has a number of features. The specificity in this case is that the parameters of such land areas are very specific: non-standard purpose (commercial use), unique small areas in Kyiv for multi-storey residential development and the like. Also for legal persons it is often necessary to define the right to use the land that is used by the customer on the lease.

Legal entity order service to determine the cost most often in such cases:

  • all types of civil contracts (including lease agreements);
  • for presenting in court (in cases of property disputes for the division of property and payment of court fees);
  • land pledged (mortgage);
  • recording of land values and use rights in accounting (very often government agencies have this need);
  • bankruptcy, liquidation or reorganizing a business;
  • formation of the authorized company fund;
  • developing a business plan to attract investors.

What documents must be submitted to a legal entity? Everything is simple: title documents and any registration document for the customer. When carrying out an expert assessment of the rights to land owned by State enterprises, the package of documents is determined individually.

What affects the value of the area?

These basic factors determine the market value of land:

  • location (location in the area of transport accessibility, remoteness or proximity to the infrastructure of the locality);
  • legal regime of the land parcel (purpose);
  • the availability of utilities;
  • physical characteristics (size and configuration);
  • terms of sale (free or urgent (forced) selling).

You are welcome to contact with us, we look forward to see you among our clients!