Land relations in Ukraine
On March 31 this year, the Verkhovna Rada of Ukraine passed a law on land. This is undoubtedly a historic event. And this is the first step in land reform.
This law is not about selling land. It is about the right of people to freely dispose of their land, to be the true owners of their land.
CEO of Investment Company INTELEVRAZ Yuriy Diachuk shared his vision of future land relations in Ukraine.
– When will the land market start working and who will be able to buy land?
– The land market in Ukraine will be introduced on July 1, 2021. Citizens of Ukraine, legal entities of Ukraine, territorial communities and the state will be able to acquire the right of ownership to agricultural land plots. Banks will be able to acquire ownership of agricultural land only in the order of foreclosure on them as collateral. Such land plots must be alienated by banks at land auctions within two years from the date of acquisition of ownership.
– Will foreigners be able to buy land?
– Ownership of agricultural land by foreign citizens, stateless persons, legal entities established and registered under the laws of Ukraine, participants (founders) or ultimate beneficial owners (controllers) of which are persons who are not citizens of Ukraine, may be exercised from and subject to the approval of a referendum.
– Who will not be able to buy land?
– Under any circumstances, the acquisition of ownership of agricultural land is prohibited:
1) legal entities, participants (shareholders, members) or final beneficiaries of which are persons who are not citizens of Ukraine, for agricultural land plots of state and communal property, agricultural land plots allocated in kind (on the ground) to owners of land plots ( shares), and which are located closer than 50 kilometers from the state border of Ukraine (except for the state border of Ukraine, which passes by sea);
2) legal entities, participants (shareholders, members) or final beneficiaries of which are citizens of a state recognized by Ukraine as an aggressor state or an occupying state;
3) persons who belong or belonged to terrorist organizations;
5) legal entities, participants (shareholders, members) or final beneficiaries of which are foreign states;
4) legal entities in which it is impossible to establish a beneficial owner (controller);
5) legal entities, beneficial owners (controllers) of which are registered in offshore zones;
6) individuals and legal entities in respect of which special economic and other restrictive measures (sanctions) have been applied;
7) legal entities established under the legislation of Ukraine, which are under the control of individuals and legal entities registered in the states included in the FATF in the list of states that do not cooperate in the field of combating money laundering.
– How much land can be bought?
– The total area of agricultural land owned by a citizen and a legal entity may not exceed 10,000 hectares. If a citizen owns the right to a share in the authorized (composed) capital, in the share fund of a legal entity or to individual shares, it is considered that in addition to land plots owned by him, he also owns the right to own land with a total area , equal to the area owned by the legal entity of which he is a participant, multiplied by the size of the share of such a citizen, expressed as a percentage, in the authorized (composed) capital, share fund of this legal entity.
Until January 1, 2024: the limit of 100 hectares and the right to purchase land have only individuals.
– How much will it cost and how can you pay for the land?
– Until January 1, 2030, the sale price of agricultural land allocated in kind (on the ground) to the owners of land shares (units) may not be less than their regulatory monetary value. Calculations are made in non-cash form. It is not allowed to acquire the right of ownership of land plots under repayment agreements in case the purchaser of the right of ownership does not have documents confirming the sources of origin of funds or other assets at the expense of which such right is acquired.
– What land is forbidden to sell?
– The sale of agricultural land of state and communal ownership is prohibited. It is also prohibited to alienate agricultural land plots located in the temporarily occupied territories in Donetsk and Luhansk oblasts, the Autonomous Republic of Crimea and the city of Sevastopol, except for their inheritance.
– Do you support the introduction of the land market in Ukraine?
– The law that is now adopted is the result of a compromise of many things. It is simple and working. It is very good that it has been accepted, because it will give a lot of benefits to all parties – both shareholders and those who rent these shares. During this transition period, the government still has a long way to go to build a transparent and fair land market, from an efficient land cadastre to systematic support for farmers.
It is also necessary to regulate the unbundling of lands of state-owned enterprises, and the relevant bill was registered in the Council about a month ago. 96% of the State Geocadastre database already contains information on private land on the market that will be opened. In addition, data on about 70% of state and communal lands have been entered into this database, and the inventory is ongoing. After all, if the land is not inventoried, it can not be the subject of any agreements. Not only sales, but also rent.
An anti-raider law has recently come into force, which removes many of the problems associated with the registration of property rights, including land. Obviously, there is room to grow, so these things will go in parallel, there is still time to tighten the critical moments!
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