Real estate in Ukraine: who shouldn't pay the pension tax when buying a home
Since 2021, the tax on real estate will increase in all Ukrainian regions, but the so-called “luxury tax” will not be changed. And if it is quite expensive to have housing, taking into account all payments, then acquiring it turns out to be even more expensive. Recently, it is possible to reduce payments due to the pension levy in the sale and purchase of housing due to the fact that the government has regulated this area.
How much do you need to pay?
During the transaction, the person purchasing the property must pay 1% of the total price of the property to the Pension Fund. Otherwise, the notary does not certify the documents. But the amount is not paid by those who buy real estate for the first time. This applies to houses (whole or parts of a building), apartments with different areas, summer cottages, garages.
In the fall of 2020, the government of Ukraine thought out in detail and legalized the procedure for canceling the payment of the fee for those who buy housing for the first time or stand in line to receive it.
Legislation in the 1990s strictly stipulated who had the right not to pay the fee. However, such standards were considered irrelevant due to the fact that it was simply impossible to prove whether a person had previously purchased housing.
Which real estate buyer may not pay the mandatory fee
Who can not pay the pension tax:
legal entities that receive real estate at the expense of budgetary funds;
companies from other states that have immunity under international agreements;
individuals who are queuing up to get housing;
individuals who purchase real estate for the first time.
The legislative act uses the following wording “a person does not have and did not acquire ownership rights to housing,” which means that those who:
did not purchase real estate;
did not formalize privatization;
did not receive housing as a gift or as an inheritance;
did not purchase housing for joint use with a spouse.
There is also no fee to pay if the buyer invests in the construction of a residential property. For example, this concerns situations with the purchase of bonds, interaction with the construction sector financing fund.
What has changed for those who buy real estate
In the fall of 2020, the Cabinet of Ministers legislatively changed the mechanism for using the rights to return the pension tax. It will be necessary to collect a package of documents, but you will no longer need to go to court.
When a transaction for the sale and purchase of an object is drawn up through a notary, the future owner writes a statement stating that he has no other housing in his property and has not previously acquired it. This document must be accompanied by data stating that housing checks were not used for privatization (you need to take a certificate), as well as a statement from the State Register of Real Estate Rights. Those who were in the queue for housing must add an additional certificate in the profile department of the regional state administration.
How do I get my pension tax refunded if real estate was purchased earlier?
If the property was purchased earlier, then you can return the money that was paid as a fee, but only in court. The regulatory documents do not establish the period during which it is possible to return the amount paid for pension insurance. So you can sue, even if the property was bought years earlier.
To do this, you should contact the local branch of the Pension Fund, providing the following documents:
a contract confirming the purchase of real estate;
copies of receipts confirming payment of the pension fee;
a certificate taken from the register of real estate rights (the document confirms that the applicant bought the object for the first time).
Legal entities must additionally indicate the name of their organization and the EDRPOU code. Individuals prescribe an identification code number. The application records the place of residence (for individuals) or place of registration (for companies), as well as the phone number, the amount of collection payments and the method of payment (cash or non-cash form).
Since the Pension Fund does not contain data on the account of people's ownership of housing and other real estate, the organization will not be able to independently determine whether the applicant is purchasing housing for the first time. In this regard, the Pension Fund writes a written refusal. Further with this document you need to apply to the administrative court. The limitation period is six months from the moment the written refusal was received. After the decision of the court, the funds will be returned. For this, the local branch of the Pension Fund applies to the State Treasury.