Ukraine Tightens Rental Rules and Considers Tax Cuts for Landlords

Housing Support for Displaced Ukrainians

According to ХВИЛЯ: Ukraine has launched programs to provide housing for citizens displaced by the war who have lost their homes. These initiatives are part of a broader effort to manage the housing crisis caused by the ongoing conflict. The state is also intensifying its crackdown on the shadow rental market. Mandatory registration of rental agreements could be introduced this year to increase transparency in the sector. Property owners are required to declare rental income, which is currently taxed at a rate of 23%.

New Obligations for Real Estate Agents and Landlords

New regulations also impose obligations on real estate agents, who will be required to share client information with the tax authorities. A first-time offense for concealing rental income carries a fine of 25% of the unpaid tax amount. For repeat violations, penalties increase significantly, ranging from 51,000 to 85,000 hryvnias.

It is worth noting that parliament is considering a proposal to reduce the tax rate for landlords to 7%. This move could be a significant step in combating the shadow market, as, according to MP Olena Shuliak,

“high taxes are precisely what force owners to remain in the shadows”

. The introduction of a unified system for registering rental agreements is also intended to simplify enforcement of tax laws.

The introduced measures aim to support internally displaced persons and increase the transparency of Ukraine's rental market during a challenging socio-economic period. Stricter market oversight could help reduce the shadow economy, which would, in turn, positively impact state budget revenues. A lower tax rate for landlords may serve as a key incentive for legalizing rental activities, fostering a more stable environment for all market participants.