Ukraine's New Rental Rules: Mandatory Registration and Fines Up to 85,000 Hryvnias.

Overhauling Ukraine's Real Estate Market

According to TSN.ua: The Ukrainian government is preparing a major reform for the real estate market. This initiative aims to bring the rental housing sector out of the shadows by making lease agreements mandatory to register, introducing fines for non-compliance, and offering tax reductions for property owners. The primary goals are to improve fiscal discipline and formalize a largely informal market.

Under the new proposals, fines for failing to register a rental contract could reach 85,000 hryvnias, a significant sum designed to compel landlords to comply. Furthermore, property owners who do not declare their rental income could face criminal liability under Article 212 of Ukraine's Criminal Code. In a move to incentivize compliance, the tax rate on rental income will be set at 19.5%, which combines an 18% personal income tax and a 1.5% military levy. These taxes must be paid quarterly, with a deadline of 40 days after the end of each quarter.

Tax Cuts in Exchange for Registration

According to Olena Shuliak, property owners will be offered lower taxes in return for mandatory contract registration.

"We have decided to first work on reducing taxes, and the next step will be the mandatory registration of the contract,"

The proposed changes reflect the government's push to improve the economic climate and ensure transparency in the rental sector. If implemented, the reform could lead to:

• increased budget revenues from taxes on rental income;
• reduced corruption risks associated with the informal sector;
• a major step in combating Ukraine's shadow economy.