Land Changed to a New Owner Mid-Year: How the Tax Liability Will Be Calculated
For calculating the minimum tax liability, the actual period of ownership or use of the land plot during the calendar year is important.
As tax authorities reported, citing the Ministry of Finance's response, if during the calendar year a land plot transfers from one owner or user to another, including under lease, sublease, or emphyteusis agreements, the minimum tax liability is distributed between them proportionally to the time of use.
Specifically, the previous owner or user pays the minimum tax liability for the period from January 1 until the month in which their right to the land plot ended. The new owner or user pays the minimum tax liability starting from the month they acquired the right to the land.
At the same time, the amount of the minimum tax liability is included in the total tax obligation of each taxpayer separately — proportionally to the actual period of ownership or use of the land plot.
Thus, the minimum annual amount of the minimum tax liability, as defined by the Tax Code of Ukraine, is adjusted depending on the number of months the land was actually used. This allows for a fair distribution of the tax burden among taxpayers and avoids charging tax liabilities for periods when the land plot was not actually owned or used by them.
It is also reminded that according to the Tax Code, the minimum annual amount of the minimum tax liability is no less than UAH 700 per hectare, and for land plots where arable land occupies more than 50% of the area — no less than UAH 1400 per hectare.
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