On July 1, 2021, the land market opened in Ukraine. Now the citizens of the country can freely acquire agricultural land. Is it possible to sell or buy a plot under the new law? What to do if it is rented, what is its approximate value, and what to pay attention to? We answered these and other questions.
Which plots can be bought and sold
The text is about agricultural land.
On the territory of the country, there are 42 million hectares of agricultural land. From 2002 to July 1, 2021, a sales ban was in effect on 41 million hectares. Of this, 27 million hectares are allocated to shares that were distributed in 1990 among workers and retirees of collective farms. These are the plots that can be bought and sold.
The moratorium on conducting commercial transactions with agricultural lands owned by state and municipal services remains unchanged.
Who has the right to buy land
At this stage, the possibility of purchasing land plots is available only to individuals. Starting from July 1, 2024, legal entities will also obtain permission to conduct transactions. At the same time, a restriction will apply, with a maximum of 10,000 hectares per individual.
Who else has the right to buy land? Foreigners will be able to purchase Ukrainian fields only if this issue is resolved positively in the nationwide referendum. However, the date for its holding has not been set.
Regardless of the referendum results, a foreigner cannot purchase a plot of land located within 50 km of the state border of Ukraine.
How much land can an individual purchase?
Until 2024, the size of the land owned is limited to 100 hectares. Then, through a legal entity, these figures will increase to 10,000 hectares.
However, when considering how much land an individual can buy, one nuance should be taken into account. Through related parties, such as relatives or business partners, it is possible to purchase more. But be prepared to indicate the source of the funds.
Can rented land be sold?
Approximately 60% of Ukraine’s fields are leased. The land belongs to the owner, and he can dispose of it at his discretion. For example, sell it during the lease, but with respect to the priority right.
First, it is necessary to contact a notary, declare the intention to sell, and inform about the desired price. The lawyer is obliged to contact the tenant as the person with the priority right to purchase the share. Within two months, the tenant must decide whether they accept the price of the plot and whether they will buy it.
If a refusal has been received, agricultural land can be transferred to the ownership of any other person who can legally become a buyer. However, the new owner will be able to fully dispose of the share only after the lease agreement has ended or been terminated.
It is also possible to sell leased land if the term of its transfer to third parties exceeds 49 years. In this case, nothing changes.
How land will be sold
When selling a plot that has not been leased and for which no special permit for subsoil use has been issued, the commercial agreement is conducted according to the standard procedure.
Since the land will be sold openly, the owner can independently search for a buyer among acquaintances or place an advertisement on specialized resources. Unlike rented plots, here the decision on whom to enter into an agreement with is made by the owner.
To conclude the contract, one should contact a notary. He will conduct the necessary checks for the sale, certify the signing of documents, the fact of purchase, and the transfer of ownership rights.
Auctions are held only for the sale of lease rights for plots owned by the state and municipal services.
How to buy land
If you intend to purchase a share, you should keep in mind that the sale of land may be associated with the planned alienation of land from legal entities and individuals. This occurs when reserve, stock, or state-owned lands are divided into 2 hectares and transferred free of charge into ownership, and then alienated.
Before buying land, you should plan the desired location of the plot, its size, and the approximate price that suits you.
The next step is to find a seller. You can inform about your desire in the nearest villages. However, do not rush and agree to the first offer. The stated price is likely to be significantly inflated. By using online resources and internet platforms, you will be able to determine the approximate value of the share in the agricultural land market.
Land evaluation
When making a purchasing decision, it is important to clarify and verify the information related to the plot. This will help form an opinion about its real value and avoid becoming a victim of fraud.
Find out the cadastral number of the plot. This is a unique number that allows you to identify the location of the land. If it is not available, ask to register the land in the design organization. When the seller refuses to fulfill the request for some reason, it is a sign of fraud. It’s worth looking for another field to purchase.
Visit the web portal State Land Agency, where you can find out about land ownership rights, usage restrictions, and normative monetary valuation of land.
Check the entries in the State Register of Property Rights. This will allow you to determine the intended purpose of the share, its area, and whether third parties have property rights to it. If it is leased, it is worth considering the obligations of the owner, the tenant, and the duration of the agreement before making a purchase.
Make a request to the Unified State Register of Court Decisions. There you will learn about the existence of boundary disputes, whether the plot is under arrest or has been pledged as collateral.
Having received theoretical information, familiarize yourself with the features of its relief by visiting the site.
Only by analyzing all the data can one understand the value of the lands and start a conversation with the owner about purchasing.
How to sell land
The seller needs to somehow express their desire to sell the plot. For example, by discussing this topic with farmers, posting an ad on online bulletin boards in the real estate section, or on specialized platforms.
Before selling, realistically assess the value. On the land market, review listings for plots similar to yours; this will help create a competitive offer.
If in an attempt to earn, one sets an excessively high price, there is a risk of not finding a buyer at all. It’s also not advisable to significantly undervalue the figures, except when the deal needs to be conducted urgently.
Important. Enter the share in the State GeoCadastre register. If there are state acts of the old sample, perform the technical documentation for the establishment of boundaries. This is necessary for the subsequent transfer of rights.
The image of the plot will now appear on the map. The potential buyer will be able to check the information related to agricultural land, which will confirm the honesty and seriousness of the seller’s intentions.
Also, keep in mind that after the land market opens, design organizations will be heavily loaded. So if you start the procedure for obtaining a cadastral number at the last moment, the signing of the contract may be postponed for an indefinite period.
To expedite the transaction for the sale and purchase of a share, the seller should enter the land data into the State Register of Property Rights in advance. If a lawyer takes care of this when drafting the contract, it will take an additional 5 days, resulting in a delay.
What documents are needed to conclude an agreement
To carry out a transaction for the sale and purchase of a plot, it is necessary:
- Certificate confirming the intended use of the land – agricultural activities.
- The original extract from the State Land Cadastre, the service will cost approximately 100 UAH.
- Expert assessment of the share, ordered from the relevant organization. The approximate cost is 1,000 UAH and above.
- Document confirming ownership of the land plot by the seller. For example, a decision by the United Territorial Community, the village council, or an order from the State Geocadastre.
- Excerpt from the State Register of Rights to Real Estate. If the share is absent in the registry, the plot is registered for the conclusion of the contract and an administrative fee is paid.
What other documents are needed to formalize the agreement? For individuals, this is a passport and taxpayer identification number (TIN). A legal entity must provide founding documents.
The buyer becomes the owner of the plot within 3-5 days after the registration of ownership rights.
Pricing
The cost of land is determined by the agreement between the seller and the buyer. No one can force an agreement at a price that does not satisfy one of the parties. However, it should be noted that by 2030, the minimum threshold that cannot be lowered is the officially established minimum value of a plot in the given area. This information can be obtained from the state geocadastre website.
On average, the normative monetary valuation of 1 hectare of land in the agricultural market of Ukraine is 27 thousand UAH. Depending on the location and characteristics of the soil, it can be either higher or lower.
When concluding the agreement, the seller will need to pay the state commission. This should be taken into account when forming the price.
The Minister of Economy expects that the annual cost of land plots will increase by up to 15%. However, other experts believe that it will be 1.5 thousand dollars per hectare by 2024. When legal entities enter the market, the price may rise to 10 thousand dollars per hectare.
Violation of conditions
The land market in Ukraine: what else should you know for buying and selling land?
If the seller entered into an agreement in violation of the preemptive right, then the person who holds the preemptive rights may buy out the share by appealing to the court.
If an agricultural plot is acquired by a person who does not have the rights to do so, such as a citizen of another country, the land is confiscated. After that, the agricultural land is put up for auction, and the money obtained is transferred to the former owner.
Reliability of the transaction
The purchase and sale agreement for land must include standard clauses regarding the acceptance and transfer of the object, its location. After signing the documents, the information is entered into the State Register of Rights to Real Estate.
Such an agreement is rarely challenged. The notary personally bears responsibility for the reliability of the transaction and tries to avoid including clauses in the documents that can be interpreted ambiguously.
If you regularly buy and sell land plots, it is worth hiring a lawyer to draft an individual contract that will protect you as much as possible from unforeseen situations.
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