Kyiv, 6 Ivana Dracha St., of. 15
Your power to winLand transactions support
Agriculture has established itself as one of the most stable sectors of Ukraine's economy, attracting increasing attention from both domestic businesses and foreign investors. In turn, land is the primary asset of agribusiness, leading to a continuous rise in the number of purchase and sale agreements, leases, subleases, and land mortgage contracts.
At the same time, the imperfection of the domestic land market, numerous contradictions in land-related laws and regulatory acts, their constant amendments, as well as the ambiguity of judicial practice regarding their application, create the need for professional legal support in land transactions. Errors in executing such agreements can lead to significant negative consequences, including the invalidation of land transactions. Therefore, it is crucial to seek the assistance of professional lawyers specializing in land law when entering into land agreements.
consultations on land transactions, including procedures for their conclusion, modification and termination, possibilities for invalidation, and taxation;
verification of the legal “cleanliness” of land plots;
examination of the legal status and reliability of the seller and buyer, lessor and lessee;
support in the conclusion, modification and termination of purchase and sale, lease, sublease, exchange, emphyteusis and servitude agreements, and additional agreements to them;
legal review and support of loan agreements under which land plots are mortgaged;
support for land auctions (bidding);
assistance in the redemption of pledged land plots, assignment of rights and removal of encumbrances;
formalization and registration of ownership and land use rights;
legal support for the succession of land rights and inheritance of land.
The sale of state or municipal land plots or rights to them (lease, superficies, emphyteusis) is conducted exclusively through land auctions, except in cases established by law. The sale of privately owned land plots or rights to them (lease, superficies, emphyteusis) may be carried out without conducting land auctions.
Agricultural land cannot be transferred into the ownership of foreigners, stateless persons, foreign legal entities or foreign states.
Land plots in state, municipal, and private ownership may be pledged as collateral unless otherwise provided by law. Rights to such land, including lease rights, the right to use another’s land for agricultural purposes (emphyteusis), and the right to use another’s land for construction (superficies), may also be pledged unless otherwise stated by law. A land plot or rights to it may only be pledged if the land plot has been assigned a cadastral number.
Recommended actions to minimize risks when concluding a land lease agreement:
- Clearly define the amount and payment procedure for rent. Payment may be made in monetary or natural forms, or in the form of services provided to the lessor.
- Pay special attention to the lease term and termination conditions. It may be unfavorable if the agreement allows the other party to terminate the lease unilaterally.
- Notarize the lease agreement. Although the law does not require notarization, involving a notary enhances the reliability of the transaction, as the notary is responsible for verifying the parties' authority to conclude the agreement, the existence of title documents for the land, and the compliance of the agreement’s terms with legal requirements.
At the end of the lease term, a tenant who has duly fulfilled their contractual obligations has a preemptive right over others to renew the lease for a new term. A tenant intending to exercise this preemptive right must notify the landlord before the lease expires within the timeframe specified in the agreement, but no later than one month before the lease term ends.
A mortgage agreement is concluded between the mortgagor and the mortgagee in written form and must be notarized.
According to the Law of Ukraine "On Land Lease," lease and sublease agreements for land plots are subject to state registration in accordance with the procedure established by law.
The sale of a land plot by an individual is not subject to taxation if all three of the following conditions are met simultaneously:
- the taxpayer (seller) has not conducted any other real estate alienation transactions (including selling a house, apartment or other building) during the reporting tax year;
- the land plot does not exceed the free transfer area limit established by the Land Code of Ukraine based on its designated use;
- the land plot has been owned by the taxpayer for more than three years (except when the land was acquired through inheritance).
In all other cases, the sale of a land plot by an individual is subject to personal income tax (PIT).