What landowners and users need to know? Preferential right.
On April 28, 2020, the President of Ukraine Volodymyr Zelensky signed the Law “On Amendments to Certain Legislative Acts of Ukraine Concerning the Circulation of Agricultural Lands”.
From 1 July 2021, the moratorium on the sale of agricultural land will be lifted.
From now to acquire the right of ownership of agricultural land will be able to:
- from July 1, 2021 to 1 January 1 2024, only citizens of Ukraine – up to 100 hectares. This restriction does not apply to land acquired by a citizen before the entry into force of this provision;
- from 1 January 2024, legal entities of Ukraine created and registered under the legislation of Ukraine, participants (shareholders, members) of which are only citizens of Ukraine and / or the state, and / or territorial communities – the amount of land concentration up to 10 thousand hectares;
- from January 1, 2024, the right of ownership of land can also be acquired by banks only by way of foreclosure on them as collateral. Such land plots must be alienated by banks at land auctions within two years from the date of acquisition of ownership;
- Acquisition of ownership of agricultural land by foreign citizens and legal entities may be carried out from the date and subject to the approval of this issue in a referendum.
The purchase and sale of land is carried out in compliance with the preemptive right to purchase it. The preemptive right to acquire a land plot may be transferred by its subject to another person, of which such subject must notify the owner of the land plot in writing.
Payments related to the payment of the price of agricultural land under civil law agreements are made in non-cash form.
Until 10 January 2024, the sale price of agricultural land allocated in kind (on the ground) to the owners of land shares (units) may not be less than their regulatory monetary value.
The purchase and sale of land is carried out in compliance with the preemptive right to purchase it. The preemptive right to acquire a land plot may be transferred by its subject to another person, of which such subject must notify the owner of the land plot in writing.
Payments related to the payment of the price of agricultural land under civil law agreements are made in non-cash form.
Until 1 January 2030, the sale price of agricultural land allocated in kind (on the ground) to the owners of land shares (units) may not be less than their regulatory monetary value.
Prohibitions:
- Prohibition on the sale of agricultural land of state and communal ownership;
- Foreigners are prohibited from buying agricultural land located closer than 50 km from the state border of Ukraine, despite the results of the referendum;
- Legal entities, participants (shareholders, members) or final beneficiaries of which are citizens of a state recognized by Ukraine as an aggressor or occupying state, as well as persons belonging to or belonging to terrorist organizations will not be able to acquire agricultural land;
- The ban also applies to legal entities whose ultimate beneficiaries are foreign states, or in which it is impossible to establish a beneficial owner (controller), as well as beneficial owners (controllers) whose registered in offshore zones;
- Individuals and legal entities subject to special economic and other restrictive measures (sanctions) in accordance with the Law of Ukraine “On Sanctions”, as well as legal entities of countries that do not cooperate in combating money laundering will not be able to purchase Ukrainian agricultural land.
Among the new opportunities provided by parliamentarians to Ukrainian citizens:
- the right to sell agricultural land;
- provision of bank loans secured by agricultural land, starting in 2024.
- As a positive, it should be noted the granting of the primary right to tenants to purchase leased agricultural land.
Possible risks:
- concentration of agricultural land in the hands of large landowners;
- abuse of the terms of lease of agricultural land by both landowners and tenants;
- artificial understatement of land prices;
- raider seizures of land (forced sale).
The team of DEGA Partners will provide professional legal services in the field of land relations:
- physical support of agreements related to the acquisition of ownership / use of land and other real estate (purchase, sale, lease, etc.);
- advising on problematic issues in the field of land relations and agribusiness;
- obtaining permits;
- legal audit of real estate and land;
- implementation of judicial representation;
- etc.
