The amount of tax on a property sale depends on three things: how many properties you sell within a year, how long you have owned the property, and your tax status. A mistake in the calculation only comes to light at the notary during the transaction, when it is too late to change anything.
When there is no income tax
The first sale of residential property in a calendar year is not subject to personal income tax, provided the property has been owned for more than three years. This is the basic rule that covers most ordinary transactions.
The three-year rule does not apply to inherited property. An inherited apartment can be sold without this tax even sooner, as long as it is the first sale of the year.
When tax applies
The second and every subsequent sale within a single calendar year is taxable. The sale of a property owned for less than three years is likewise taxable, unless it was inherited.
The rate differs for a resident of Ukraine and for a non-resident, and it is higher for a non-resident. Tax status is determined not by citizenship but by place of residence and center of vital interests, and this is a question worth clarifying in advance.
Military levy
The military levy is paid in the cases where personal income tax arises. It is calculated on the same base, that is, on the transaction amount or the appraised value, whichever is greater.
This is a common reason for a mismatch in expectations: the seller counted only the main tax and did not budget for the levy.
The rates are these. The first sale of housing in a calendar year, where the property has been owned for more than three years: no income tax and no military levy. A second sale in the same year, or ownership of less than three years: 5 percent income tax and a 5 percent military levy, 10 percent of the contract sum in total. The 5 percent military levy rate applies from 1 December 2024. Property received by inheritance is not subject to the three year rule. As of 14.10.2026.
On what amount the tax is calculated
The base is the contract price, but not lower than the appraised value. That is why an appraisal of the property is mandatory and must be carried out by a certified appraiser before the transaction.
Attempting to understate the amount in the contract does not work: the notary checks it against the appraisal and will not certify a transaction below that value. In addition, an understated amount in the contract is a direct risk for the buyer if the transaction has to be challenged.
Who pays and when
The tax is paid before the notarial certification of the contract, that is, before the transaction, not after. The notary acts as a tax agent and will not certify the contract without confirmation of payment.
The allocation of costs between the parties is a matter of agreement. As a general rule, the mandatory contribution to the Pension Fund is paid by the buyer, and the personal income tax by the seller. The arrangement is recorded in the preliminary contract, so that it does not have to be sorted out in the notaryʼs office.
Related: how to sell an apartment fast, documents for selling an apartment and selling with FAKTOR.
Three worked examples
First case. The apartment was bought eight years ago and is the first sale this year. No income tax, no military levy. What remains is the valuation, the notary fee and the mandatory pension fund contribution, which by general rule the buyer pays.
Second case. The apartment was bought a year ago and is being sold now. The three year rule is not met, so both the income tax and the military levy apply. They are calculated on the contract price, but not below the appraised value. If you kept the purchase documents, the base can in a number of cases be reduced by what you paid for the property, and that is worth settling with the notary before the closing rather than at it.
Third case. Two apartments are sold in the same calendar year. The first one is tax free by the general rule, the second carries both the tax and the levy no matter how long it was owned. Where it is possible, the second deal is moved to January of the next year, and that is the simplest legal saving available on this market.
Inheritance and gifts
An inherited apartment can be sold without reference to the three year period, provided it is the first sale of the year. Receiving the inheritance is taxed separately, though, and the rate depends on the degree of kinship: for the first and second degree it is zero, for everyone else it is not.
The same applies to a gift. Before drawing up a deed of gift instead of a sale, work out the gift tax for that specific degree of kinship. It turns out often enough that an ordinary sale costs less.
Selling as a non resident
A non resident pays income tax at a higher rate, and the rule about a tax free first sale does not apply to them in the same form.
Status is decided by permanent residence and the centre of vital interests, not by citizenship. A Ukrainian citizen who has lived abroad for several years may well be treated as a non resident. This is established before the closing, because nothing can be changed at it.
What to prepare in advance
Documents proving the date ownership was acquired, documents on what you paid for the property if you still have them, and your tax number. Where there are several sellers, each calculates their own share separately.
The valuation is ordered closer to the closing because it has a limited validity period. It comes from a certified appraiser, the report is registered in the single database, and the notary checks that registration number rather than the paper itself.
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