New rules on the taxation of luxury cars and real estate will come into effect in Ukraine in early 2024, significantly impacting owners of this type of property. These changes are part of a broader tax reform aimed at increasing state budget revenues and reducing social inequalities.
What is a luxury tax?
A luxury tax is a form of property tax levied annually on owners of expensive vehicles and large properties. Depending on the object, luxury taxes include vehicle taxes and real estate taxes.
Which cars are subject to tax in 2024?
Transport tax is levied on passenger cars that are not older than 5 years. The Ministry of Economy of Ukraine annually determines the average market value of a car, which is the basis for calculating the tax. This year, the average market value threshold is UAH 2,662,500, which is equal to 375 minimum wages.
The list of taxable cars includes brands such as Aston Martin, Audi, Bentley and others. Real Estate and Taxes
Owners of apartments with an area of over 300 sq. m and houses with an area of over 500 sq. m are also subject to the luxury tax.
Local authorities set a tax rate that cannot exceed 1.5% of the minimum wage as of January 1 of the reporting year for each square meter.
Real estate taxation in wartime
In response to the ongoing hostilities, the Tax Code of Ukraine has been supplemented with new provisions that allow for the reduction or even cancellation of taxes for owners of real estate damaged by hostilities but still suitable for use.
