When is it better to refuse to sell an apartment?

Selling an apartment is a legal procedure for transferring ownership of a home to another person. It includes document verification, notarization, and registration in the state registry.

After the military levy increased from 1.5% to 5% from December 1, 2024, taxation on the sale of real estate can reach up to 25%. According to the results of the TOP-50 rating of leading law firms in Ukraine, DE-JURE took 8th place in the Real Estate and Construction sector, and therefore our expertise in this matter is beyond doubt.

Head of the Real Estate and Construction Practice of DE-JURE, lawyer, Candidate of Law Ivan Topor told Delo UA who will have to pay the maximum amount of taxes and how to avoid it.

So, the seller pays the largest amount of taxes (18% personal income tax + 5% military fee + 1% pension fee + 1% state duty + notary services + additional services (technical passport, apartment valuation) in the following cases:

the apartment is owned by the seller for less than 3 years and this is his second sale of real estate in a year;

this is the second or third transaction in a year by the same seller, which has signs of entrepreneurial activity;

the seller has non-resident status, and it does not matter how many years he has owned the apartment – personal income tax will be 18%.

However, the Tax Code provides for the possibility of reducing tax expenses. The seller can pay 18% personal income tax and 5% military fee not on the cost of the apartment, but on the difference between the costs incurred by him to purchase the apartment and its value at the time of sale. To do this, he must provide the tax office with documents confirming the costs of purchasing the apartment, notarized copies of the contracts on the basis of which he previously purchased an apartment and then sold it, and bank payment documents confirming the settlement with the previous owner of the apartment.

Read the full text on Delo UA at the link.