Land tax has increased three-fold: implications for companies that own land

17.12.2010 17:12
Articles about real estate | Land tax has increased three-fold: implications for companies that own land The land tax has existed previously. And in the Tax Code has not changed in the method of its calculation. The tax base remains the normative monetary assessment allotment.

If the land is not assessed, the tax will be levied according to another scheme. Only now have to pay more, says expert.

Related article: How to invest in land?

For example, if previously the owner of 12 hectare per year for the payment of land tax gave the Power 288 hryvnia, now has to pay 924 hryvnia. True, from the output tax area plots, which are houses and outbuildings: in towns - not more than 0.1 hectares, in villages - no more than 0.15 ha, and in the villages - no more than 0.25 ha. In addition, for individuals, there are other benefits - in particular, if the site is intended for personal subsidiary farming, the tax is not payable.

Lawyer Law Firm Yustikon "Margarita Chernokondratenko argues that the responsibility for late payment of tax on land requires a penalty for each day of delay and penalties. "I draw your attention that according to article 141 of the Land Code of Ukraine, the systematic non-payment of land tax or rent can lead to deprivation of property rights on the land or the right to use them" - she says.

Tax price
According to the director of Internet project "Land Reform Policy in Ukraine" Maxim Fedorchenko, a threefold increase in rates is hardly a surprise: every year they increased the budget law, sometimes - many times. "If you start with 70 million hryvnia per year from all over Ukraine, and now goes by the billions," - he said.

Experts believe that the new provisions on the tax on the land mortgaged lot of common standards. So, head of risk management Kiev Directorate of Innovation and Industrial Bank, Alexander Podolyanko deems appropriate norm of the Tax Code, which provides that the tax on farmland, where the production is not conducted over three years, used the coefficient of 1.2, as if the earth and beyond continues to be idle , the coefficient of annual growth of 20%

"This is a blow to speculative capital. After all, before the crisis to 70 percent of transactions in the land market were speculative in nature "- sure Podolyanko. In his view, the owners of a large number of plots haste to remove them. The first land to be sold to any flaw.

Experts agreed that the tax increase would not entail a price increase of holdings. On the contrary, is more likely that an increase in supply can lead to a decrease in the average price.

What is bad
Senior lawyer law firm "Vasil Kisil & Partners Natalia Dotsenko-Belous had in mind a five-fold increase in land tax rates for the use of valuable land (arable) land of historical and cultural destination, nature reserve is not the core purpose. She is confident that it will solve the problem of chaotic building.

However, some issues the MPs have not decided yet. In particular, Fedorchenko concerned imperfect technique accrual tax rate on the areas that are already evaluated. This is more than 60% of the total land fund of Ukraine.

"Assessment Act provides that the land value reviewed every five to seven years, but it is not often enough. For example, in countries where established full inventory of the whole system is computerized, the process occurs automatically every year. And when starting the recovery or recession, the tax base is responsive to these changes "- said Fedorchenko.

In Ukraine all the way around. When holdings rose in price galloping pace, the land was assessed at rates far below market rates. Now the land fell, and the tax rate is taken from the value that was calculated earlier in the period of rapid price growth.
Content tags: land Legislation
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