What is the duration for which taxpayers are exempt from paying for damaged real estate, excluding land plots?

Tax officials clarify that property owners are exempt from paying real estate taxes for properties that were damaged in 2022, provided that the information regarding these damages is registered in the State Register of Damaged Property in 2024. This exemption applies to the period starting from March 1, 2022, and extends to subsequent periods.

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The tax service explains the period during which taxpayers are exempt from paying taxes for damaged real estate, excluding land plots.

It is noted that temporarily, during the state of war in Ukraine, introduced by the Presidential Decree dated February 24, 2022, No. 64/2022 “On the Introduction of Martial Law in Ukraine,” approved by the Law of Ukraine dated February 24, 2022, No. 2102-IX “On Approval of the Presidential Decree ‘On the Introduction of Martial Law in Ukraine,’” until December 31 of the year in which martial law is terminated or canceled, the provisions of Article 266 “Tax on Real Estate Other Than Land” of the Tax Code of Ukraine (hereinafter – TCU) are applied considering the specifics defined by paragraph 69.22 of subsection 10 of section XX “Transitional Provisions” of the TCU, which stipulates that the tax on real estate other than land (hereinafter – Tax) is not assessed and not paid for damaged residential and/or non-residential real estate properties (as those requiring major repairs, reconstruction, or restoration due to hostilities, terrorist acts, diversions caused by the armed aggression of the Russian Federation against Ukraine):

for 2021 and subsequent tax (reporting) periods – for residential properties, including their shares, owned by individuals, which were damaged in 2022 as a result of hostilities, terrorist acts, diversions caused by the armed aggression of the Russian Federation against Ukraine, and for which damage data has been entered into the State Register of Property Damaged and Destroyed as a result of hostilities, terrorist acts, diversions caused by the armed aggression of the Russian Federation against Ukraine (hereinafter – Property Register). The assessment of the Tax for such real estate properties resumes starting from the month following the month in which, according to the Property Register, the residential properties were capital repaired, reconstructed, restored, and recognized as suitable for habitation;
for the period from March 1, 2022, and subsequent tax (reporting) periods – for residential properties, including their shares, owned by legal entities, which were damaged in 2022 due to hostilities, terrorist acts, diversions caused by the armed aggression of the Russian Federation against Ukraine, and for which damage data has been entered into the Property Register. The assessment of the Tax resumes starting from the month following the month in which, according to the Property Register, the residential properties were capital repaired, reconstructed, restored, and recognized as suitable for habitation;
for the period from March 1, 2022, and subsequent tax (reporting) periods – for non-residential properties, including their shares, owned by individuals and/or legal entities, which were damaged in 2022 as a result of hostilities, terrorist acts, diversions caused by the armed aggression of the Russian Federation against Ukraine, and for which damage data has been entered into the Property Register. The assessment of the Tax for such real estate properties resumes starting from the month following the month in which, according to the Property Register, the non-residential properties were capital repaired, reconstructed, restored, and recognized as suitable for their intended use.

For residential and/or non-residential properties, including their shares, owned by individuals and/or legal entities, damaged (as those requiring major repairs, reconstruction, or restoration) in tax (reporting) periods starting from January 1, 2023, as a result of hostilities, terrorist acts, diversions caused by the armed aggression of the Russian Federation against Ukraine, the Tax is not assessed and not paid for the period from the first day of the month in which the fact of damage to the residential and/or non-residential property was recorded in the Property Register, until the first day of the month following the month in which, according to the Property Register, the residential and/or non-residential properties were capital repaired, reconstructed, restored, and recognized as suitable for habitation/use for their intended purpose.

The basis for calculating tax liabilities for the Tax on residential and non-residential properties, including their shares, owned by individuals and/or legal entities that were damaged or destroyed, is the information defined by Article 266 of the TCU, data from the Property Register, and data from the List of Territories where hostilities are (were) conducted or temporarily occupied by the Russian Federation, approved by the order of the Ministry for Reintegration of the Temporarily Occupied Territories of Ukraine dated December 22, 2022, No. 309 with amendments and supplements.

The procedure for submitting an informational notification about damaged and destroyed real estate due to hostilities, terrorist acts, diversions caused by the armed aggression of the Russian Federation against Ukraine is approved by the resolution of the Cabinet of Ministers of Ukraine dated March 26, 2022, No. 380 “On the Collection, Processing, and Accounting of Information about Damaged and Destroyed Real Estate due to Hostilities, Terrorist Acts, Diversions Caused by the Armed Aggression of the Russian Federation against Ukraine.”