GENERAL INFORMATION ABOUT UKRAINIAN REAL ESTATE MARKET

Legal overview

The principal laws governing real estate market of Ukraine are as follows:
The fundamental law - The Constitution of Ukraine
The Law on Securities and Stock Market
The Law on Economic Competition Support
The Law on Institutes of Joint Investments
The Law on Investing
The Law on Financial and Credit System and Property Operation and Management
The Law on Government Control of Stock Market
The Land Code of Ukraine
The Law on State Amount of Housing Privatization
The Law on Local Government
The Civil Code of Ukraine
The Law on Construction Activities and its Planning
The Law on Architectural Activities
The Law on Land Lease
The Law on Ownership
The Law on Prices and Pricing
The Law on Corporate and Institutional Liability for Municipal Engineering

TAX OVERVIEW

Overall there are around 40 taxes and duties envisaged under Ukrainian tax system. The most material affecting the majority of the corporate taxpayers are Corporate Profit Tax (CPT), Value Added Tax (VAT), Personal Income Tax (PIT) and some other social charges and contributions.

Professionals of the real estate market can not say surely which market sector to prefer. They say it all depends on the specific purpose, plans and investment portfolio.

Year by year the amount of investments Ukrainian real estate gets from the foreign investors increases significantly. Foreign investments amounted almost $ 3 800 billion in 2006, that is thrice bigger than in 2005. Financial activities got the largest amount of foreign money - about $ 993 million, while real estate market got $ 385 million.

Ukrainian realty market is undoubtedly attractive for foreign investors. Many of them have already shown their profound interest in such a market entry, but the political instability of the last two years has ceased this positive trend. According to the latest researches, the market revives again. That can be illustrated by growing number of Russian investors who entered the market this year. But the high rate of return attracts foreign investors as well.

The main factors that suppress investors' fast entry are difficulties in licensing and poor legislative basis. Foreign investors try to eliminate the possible risks by buying ready-built property. Due to high capitalization rates (about 9-16 % in Ukraine and only 6-8% in other Eastern European countries), Ukrainian real estate market can be really lucrative.

Experts also remark that the investment climate will be profitable and attractive until the profitability drops to other Western European countries' level. This will not happen until 2009-2010, professionals reassure.

Source: http://afenida-realty.com/