How to determine the amount of tax on the sale of property

The State Revenue Committee provided explanations on the fulfillment of tax obligations by individuals when receiving property income from the sale of real estate. Appeals on property income are often received: how to determine the increase in value; is it possible to apply the market value when selling property, and others.

So when does property income arise from an individual who is not registered as an individual entrepreneur?

 

The emergence of property income:

 

1. Real estate sales:

non-commercial property

dwellings (apartments, individual residential houses, dorm rooms), cottages, land plots for residential housing, garden plots, personal subsidiary facilities, garages. commercial property

(shop, office, hotel, restaurant, etc.), land plots with the intended purpose for commercial activities (for the construction of such real estate, for farming).

 

2. The object of taxation:

INCOME FROM THE INCREASE IN VALUE

non-commercial property - exclusively owned for less than a year from the date of registration of ownership of such objects. commercial property - regardless of the period of ownership of such objects.

 

3. How is the increase in value determined:

the positive difference between the price (value) of the sale of property and the price (value) of its acquisition.

 

4. If there is no purchase price (cost):

• the property was purchased earlier under a barter agreement (if there is no price in the barter agreement) - a positive difference between the sale price and the estimated value determined for calculating the property tax of the GC "Government for Citizens", on January 1 of the year in which the ownership right arose.
• non-commercial real estate previously received in the form of inheritance or charity:

- a positive difference between the sale price of the property and the market value on the date of the emergence of ownership, determined no later than March 31 of the year following the year in which such property was sold. The market value is determined by appraisers;

- if there is no market value, or the deadline for determining the market value has not been met – a positive difference between the sale price (value) and the estimated value determined for calculating the property tax of the GC "Government for Citizens", as of January 1 of the year in which the ownership right arose.

• commercial real estate previously received in the form of inheritance or charity:

- a positive difference between the sale price of the property and the market value on the date of the emergence of ownership, determined no later than March 31 of the year following the year in which such property was sold. The market value is determined by appraisers;

- if there is no market value, or the deadline for determining the market value is not met – the sale price (cost).

• the property was previously received under a donation agreement:

- non-commercial property, with the exception of land plots (apartments, cottages, personal subsidiary facilities, garages, individual residential buildings) - a positive difference between the sale price of the property and the estimated value determined for calculating the property tax of the GC "Government for Citizens", on January 1 of the year in which the ownership right arose;

- commercial property, with the exception of land plots - the price (cost) of sale;

- land plots for residential housing and commercial real estate, garden plots - a positive difference between the price (cost) of sale and the cadastral (estimated) value of the land plot determined by the State Corporation "Government for Citizens", leading the state Land cadastre, on one of the latest dates:

the date of the emergence of ownership of the land plot;

the last date preceding the date of occurrence of ownership of the land plot.

• individual residential, previously built independently:

- a positive difference between the sale price of the property and the market value on the date of the emergence of ownership, determined no later than March 31 of the year following the year in which such property was sold. The market value is determined by appraisers;

- if there is no market value, or the deadline for determining the market value has not been met, the value gain is defined as a positive difference between the sale price (value) and the estimated value determined for calculating the property tax of the Government for Citizens Group of Companies on January 1 of the year in which the ownership right arose.

 

5. Tax liabilities:

• calculation of individual income tax on property income independently at the rate of 10%;
• submission of a Declaration on IPN (form 240.00) no later than March 31 of the year following the year in which the property income was received;
• payment of individual income tax on KBK 101202 at the place of registration (residence) of an individual no later than April 10 of the year following the year in which such income was received.

Persons who have submitted a declaration within the framework of universal declaration at the first stage, i.e. in 2021, when property income arises, are required to submit a declaration in the form 270.00.

 

Important!

Property income does not arise:

• if there is no increase in value;
• when donating real estate to another individual (from the donor).