A land share is a portion of agricultural land that a Ukrainian citizen received as property during the process of dividing collective agricultural enterprises (CAE). This article will be useful for share owners who want to dispose of their portion: sell, gift, lease, or bequeath. We will examine in detail how much it costs to transfer a land share and how to do it correctly and legally.
Who Has the Right to a Land Share
After we have defined what a land share is, it is worth learning about the rightful owners. The right to a land share belongs to former CAE members who were included in the list attached to the state act on the right of collective ownership of land, according to the Land Code of Ukraine (
- CAE employees;
- pensioners who previously worked in CAE;
- heirs to the right to a land share.
The right to a share does not depend on work experience, production indicators, or place of residence. Even if a person no longer works in CAE or has moved, they retain the right.
Documents for a Land Share
The main documents for a land share are:
- certificate for the right to a land share;
- state act on the right of ownership of a land plot;
- certificate of inheritance rights;
- contract of sale, gift, or exchange of a land share.
How to obtain a land share? You need to contact the local administration with an appropriate application and a package of documents.
Read also: Qualified Electronic Signature (QES): What It Is and How to Obtain It
How much Does it Cost to Register a Land Share
The cost of registering a land share consists of several payments:
- for technical documentation preparation — 500–2,000 UAH;
- for registration in the land cadastre — 230 UAH;
- for ownership registration — 230 UAH;
- for notarial services — 1,000–2,000 UAH.
Overall, the procedure will cost 2–5 thousand UAH. Regarding how much a land share costs, according to OpenData Bot data, the average sale price ranges around $1,000/ha. The cost is influenced by size, configuration, location, soil quality characteristics, and market demand. The most expensive plots are in Cherkasy region, the cheapest in Zhytomyr region.
Read also: How a Female Farmer Was Able to Complete the Sowing Campaign Thanks to WEAGRO
Who Pays Tax on a Land Share
The owner is the taxpayer. The rate for those who pay tax on a land share ranges from 0.3% to 1% of the normative monetary valuation, depending on the location and purpose of the plot (
- persons with disabilities;
- ATO/JFO participants and their family members;
- owners of land plots in mountainous zones.
Do pensioners pay tax on a land share? According to current legislation, they do not. To use the benefit, you must submit an application and supporting documents to the tax service.
Read also: How to find out the amount of land tax and how to pay it
How to Declare a Land Share
Since a land share is a taxable object, it must be declared. When and how to declare a land share:
- when selling a share within a year of receiving it as property;
- if the share is leased and income is received from rental payments;
- upon inheriting a share or gifting it.
The declaration is submitted to the tax service at the place of residence by May 1 of the year following the reporting year. A fine is imposed for late tax payment.
Is it Necessary to Privatize a Land Share
Privatization of a land share means allocating it in kind on the ground and obtaining a state act on the right of private ownership instead of a certificate. Is it necessary to privatize a land share? Yes, this is not only necessary for full disposal of the land: sale, gift, lease, inheritance. If you do not manage to do so by January 1, 2028, the plot will transfer to the communal ownership of the territorial community. You can privatize a share free of charge by submitting an application to the local administration. The following documents are attached to the application:
- certificate for a land share;
- cadastral plan of the land plot;
- technical land management documentation;
- passport and identification code.
After approval of the documentation and registration of ownership rights, a State Act on the Right of Private Ownership of a Land Plot is issued.
How to Sell a Land Share
According to the Law “On Amendments to Certain Legislative Acts of Ukraine Regarding the Circulation of Agricultural Land,” the land market began operating in Ukraine on July 1, 2021. Land share owners can sell their land shares. To do this, you need to:
- Privatize the plot and obtain a State Act on ownership rights.
- Contact a notary to conclude a sale contract.
- Prepare a package of documents. These include the state act on the land plot, extract from the State Land Cadastre, extract from the State Register of Property Rights, expert monetary valuation report of the plot, document on payment of income tax from the sale.
- Conclude a sale contract, sign and notarize it.
- Pay 1% state duty and register the contract.
After contract registration, the buyer becomes the full owner of the land plot, and the seller receives the funds. Regarding whether you can sell a land share during wartime, this is not prohibited.
Can a Land Share be Sold if It’s Leased
Many people wonder whether you can sell a land share if it is leased. Yes, but you must follow the procedure provided by legislation and the contract. In particular, the tenant has the preferential right to purchase the share. To sell a leased share to another person, you need to:
- Notify the tenant in writing about the intention to sell the share, specifying the price and other sale conditions.
- Give 1 month to make a decision about the purchase.
- If the tenant refused or did not respond, you can conclude a contract with another buyer.
- The new share owner becomes the landlord for the remaining term.
The rest of the procedure for how to sell a land share is the same as for non-leased shares.
Legislation establishes powers for tenants regarding shares taken on lease. They have the right to:
- exchange leased land plots;
- sublease the leased shares;
- contribute lease rights to the authorized capital of enterprises;
- transfer rights and obligations under the lease agreement to another person.
All rights and obligations regarding the share transfer to the new tenant, and the contract remains valid under the previous conditions.
For effective use of land shares, farmers need material and technical resources — seeds, fertilizers, plant protection products. The WEAGRO service allows buying everything necessary with deferred payment.
Who Buys Land Shares
According to legislation, until January 1, 2024, only individual Ukrainian citizens could buy land shares. The maximum area in one hand could not exceed 100 ha. Legal entities have the right to buy land from 2024 in volumes up to 10,000 ha. The purchase of shares by foreigners, stateless persons, and legal entities with foreign capital exceeding 50% is prohibited. Typical buyers are:
- farmers and agricultural companies for business expansion;
- investors investing funds in land;
- territorial communities for public needs.
Before finding out whether you can sell a land share, you should analyze the market and determine the optimal price.
How to Transfer a Land Share
If the owner of a land share wishes to transfer it to another person free of charge, they can gift or bequeath the share. This allows keeping the land in family or community ownership. To gift a share, a gift contract is concluded, and to bequeath it, a will is made. Both documents are subject to mandatory notarial certification. Let us examine these methods in more detail.
Can You Gift a Land Share
To the question of whether you can gift a land share, the answer is yes. The form of ownership does not matter: it can be private, state, or communal share. A gift contract for a share must contain the following data:
- cadastral number, location, area, and intended purpose of the plot;
- information about the absence of prohibitions on alienation of the share;
- document confirming the donor’s ownership right to the share.
The notary verifies this information and certifies the contract. The new share owner receives an extract from the Register of Property Rights. Income tax is not paid when gifting a share, but there is a gift tax of 5% (0% for 1st–2nd degree relatives).
How to Transfer a Land Share to a Son or Daughter
The simplest way to transfer a land share to a son or daughter is to gift it during one’s lifetime or leave it as inheritance. Parents conclude a gift contract with their children, and in case of inheritance, they make a will in their favor. If there is no will, children inherit the share on general grounds as first-line heirs. The algorithm for how to transfer a land share is as follows:
- Obtain a certificate of inheritance rights from a notary.
- Register ownership rights to the land share in the Register of Property Rights.
- Order the preparation of a new State Act in your name.
Gifting and inheriting a share is exempt from income tax. But when accepting inheritance, a tax of 5% of the share’s value is paid (0% for 1st–2nd degree relatives).
What Documents are Needed for Transferring a Land Share
So, what documents are needed for transferring a land share:
- state act on the right of ownership of a land plot (share);
- certificate for the right to a land share — if available;
- passport and identification code of the owner and new owner;
- document serving as the basis for transfer (gift contract, certificate of inheritance rights);
- extract from the State Land Cadastre;
- document on payment of taxes and fees.
Additionally, consent from guardianship authorities may be needed (if minors or incapacitated persons are among the parties), consent from the spouse, certificates of absence of rental payment debts, etc. For a complete list of necessary documents, it is better to contact a notary or lawyer specializing in land issues.
Conclusion
To dispose of a land share, you must follow the procedures provided by law. Sale, gift, inheritance, and lease of a share require proper legal registration of land rights. Therefore, you should not neglect the help of professionals — notaries, land surveyors, lawyers.
Farm enterprises that lease land shares can work more efficiently on the land thanks to modern financial instruments. The agricultural installment service WEAGRO allows purchasing necessary materials with deferred payment, which helps to conduct all field work on time.
