Govt updates land valuation rules, which will help increase revenues to local budgets
The Cabinet of Ministers of Ukraine, by a resolution dated May 27, updated the methodology for the normative monetary valuation of land plots, eliminating imbalances that led to undervaluation of land plots and deprived local budgets of additional revenue, according to the press service of the Ministry of Economy, Environment, and Agriculture of Ukraine.
"Improving the methodology for normative monetary valuation is, first and foremost, a step toward the financial independence of Ukrainian communities. We are removing artificial restrictions that have been depriving local budgets of real revenue from land rents. Updated approaches to assessing resort areas and Odesa's inclusion in the relevant list will allow for significant fundraising. This decision alone will generate an additional UAH 300 million annually for local budgets," notes Deputy Minister of Economy Denys Bashlyk.
The new rules refine the general methodology introduced after the 2021 reform and offer more effective solutions for community development. First and foremost, the resolution eliminates the rigid link to the administrative center when determining baseline indicators. Previously, rental income was determined solely by the population of the community's administrative center. Therefore, if a community included other, larger or more economically active settlements, the valuation of land plots throughout the community was underestimated. Communities are now permitted to use the indicators of the most developed settlement for their calculations.
A separate set of changes concerns land designated for health and resort purposes. Such sites are often located in cities and towns, occupying large areas in attractive areas. After the adoption of the methodology in 2021, their standard assessment was significantly reduced. Sanatoriums and resort complexes previously paid significantly lower taxes. Now, such land will be assessed using the same coefficient as developed land in populated areas. This means a higher rate, as they are actively used and generate income. Furthermore, the government clarified the list of resort and recreational zones and officially included the city of Odesa.
At the same time, the resolution significantly simplifies life for businesses and land managers thanks to three important changes.
Gaps in the expansion of settlement boundaries have been addressed: until now, there was no mechanism for assessing land plots during settlement boundary expansion until a full assessment of the entire territory had been completed. The new regulation introduces a clear and understandable algorithm for such cases.
Consolidation of assessment areas: the maximum area of one area has been increased to 1,500 hectares, which will significantly simplify the work.
Up-to-date soil quality data: assessors can now refine agricultural soil classifications based on actual, up-to-date soil surveys. This will allow for the most accurate data. This applies to all lands except those with particularly high value.
