Budgets on the results of more than 5 thousand successful auctions for the sale and lease of land in the system Prozorro.Sales received 1.43 billion UAH, the press service of the JSC “Prozorro.Sales” reported on Facebook on Wednesday.
“Land auctions held in the system Prozorro.Sales, replenished the budgets of different levels for 1.43 billion UAH”, – stated in the release.
It is indicated that 7,971 participants were able to compete in these auctions.
Currently, 778 more auctions are at the stage of concluding transactions. On average, three participants compete for one land lot.
According to “Prozorro.Sales”, the average price growth for completed land auctions is 78.8%.
The leaders in the number of announced land auctions are Kyiv, Odesa, Cherkasy, Lviv and Zakarpattya regions.
As of July 26, 2023 in the system Prozorro.Sales announced more than 1.4 thousand land auctions, which are at the stage of accepting applications for participation.
As reported, from January 1, 2024 in Ukraine will start the second stage of opening the land market, when land will be able to buy legal entities registered in Ukraine. No more than 10,000 hectares of agricultural land will be available for purchase.
The concentration of land in one hand by leasing land plots from their owners over the years of independence has led to the degradation of the Ukrainian agricultural industry, this problem can be solved by legally operating associations of landowners, consolidating in matters of growing and selling crops, head of the Ukrainian Association of Land Owners Roman Holovin said.
At a press conference at the Interfax-Ukraine agency on Thursday, he noted that the main problem of land lease relations in Ukraine is the concentration of land in one hand. Thus, 10% of the country’s agricultural land is concentrated in the ten largest Ukrainian tenants.
In addition, the user of the land, who is not its owner, is not interested in investing in the land asset, as well as in the further processing of agricultural products and the development of animal husbandry, the expert explains.
Holovin specified that the launch of the land market in 2021 did not change the situation for the better for the land owner, but continued the concentration of land in the hands of tenants. With its appearance, the rent for agricultural plots did not increase, the owner of the land did not receive the right to dispose of the land without the permission of the tenant, and the lease agreement is almost impossible to terminate. According to the expert, due to lack of prospects and intimidation by tenants, land owners are increasingly deciding to sell land for next to nothing.
“Ukraine found itself in a situation of a dead end in the implementation of land relations, which led to the decline of the agricultural sector, gave rise to socio-economic and socio-political contradictions and conflicts. Such land relations do not exist in any civilized country,” the head of the union emphasized during the press conference.
Holovin noted that associations of land owners are capable of resolving this issue, which consolidate joint efforts to sell their crops at the highest possible price, resolve the issues of production services and hiring subcontractors, accounting and tax administration. Such public independent management of land through participation in the community of land owners created by Holovin makes it possible to receive profit from the use of land by its owner 2-2.5 times more than non-public (shadow) agriculture, or management through the registration of the land owner as a private entrepreneur.
The community of land owners is a legal entity created by uniting land owners to consolidate the use of land plots in independent agricultural activities, at the same time socially significant for its participants, the society and the state as a whole. The organization is a single taxpayer of the fourth group and a value added tax payer, which implies a special taxation regime for the community and the owner of the land entering it.
“The community does not pay income tax, which means that the owner of the land does not pay it either. The land owner participating in the community does not pay the minimum tax liability (UAH 1,500-2,000 per ha of land), land tax (UAH 300-600 per ha), personal income tax (UAH 2,000-8,000 per ha of land) in the form of a tax liability and does not pay social security tax (22% of income received),” the expert specified.
At the same time, he clarified that community members have the opportunity to sell their crops at market value with VAT refunds, while individual farmers who grow agricultural products without state registration are forced to sell them 40-50% cheaper due to the lack of documents confirming their ownership of the crop.
Also, the community has the right to VAT refunds on the purchase of goods and services, pays a single tax in the amount of 0.95% of the normative monetary value of the cultivated land. In addition, it maintains personal accounting records for each participant, which means accounting for personal expenses and personal profits.
According to Holovin, the above tax and administrative preferences allow a land owner who independently cultivates land through participation in the community to have a significant advantage over illegal land owners and landlords. This way of managing allows him to receive an average of UAH 12,000-20,000 of profit per hectare of land.
According to his calculations, with a crop value of UAH 28,000/ha, the land owner can receive UAH 8,000-12,000 per hectare by optimizing taxation and accounting, and with a crop value of UAH 42,000/ha, he will earn UAH 14,000-22,000/ha.
“In the system of self-management, the income of millions of land owners is significantly increased, control of the agricultural sector and its centralized support are ensured, and most importantly, the country’s food security is guaranteed,” he summed up.
The price of land plots in Kyiv has risen by an average of 5-10% since the beginning of 2021, according to Park Lane real estate agency.
“Land reacts least of all to changes in external factors (economic, political) due to limited supply within Kyiv. Land prices are showing growth, especially with a good location. Liquid land plots can always be profitably and quickly sold,” director general of Park Lane Viktoria Barabash said.
According to the analysis of Park Lane, the most expensive offer is in Pechersky district of the capital – $ 60,000-100,000/100 sq m, in Holosiyevsky district – $ 25,000-50,000/100 sq m, in Solomiansky district – $ 20,000-40,000/100 sq m.
Barabash noted an active demand for the purchase of land within the capital, but the interest in such real estate is lower than in houses or apartments built in residential complexes.
Today there is a choice of land plots in different districts of Kyiv and with a different purpose, ranging from 600 to 92,000 sq m.
According to Park Lane, the most diverse selection of land plots is in Holosiyevsky district (Pyrohovsky Way, Chabanovska Street, Kazatska Street, etc.), Solomiansky (Sovky), in Pechersk (Zverynetska Street, Redutna Street, etc.). Also, buyers are always interested in the land in Osokorky, Rusanivski gardens, where there is access to the water.
Prime Minister of Ukraine Denys Shmyhal expects that the opening of a land market in the country will bring $85 billion of additional GDP in 10 years, and the average cost of land per 1 ha will increase fivefold.
“Ukraine has underutilized its land potential of $85 billion. In 29 years, free disposal of land has been limited, which means that its value has been underestimated several times. During this time, more than 5 million hectares of land have disappeared from the state. Development of irrigation and investment in agriculture has slowed down for decades, and partially stopped at all,” the prime minister said during the presentation of the Audit of the Ukrainian economy and vectors of economic development until 2030 in Kyiv on Friday.
PM: $1 trln of GDP in 10 years is unrealized potential of Ukraine.
On July 22, President of Ukraine Volodymyr Zelensky signed the law, which proposes to resolve the issues of establishing borders and integrated spatial planning of communities. This is evidenced by the information on the website of the parliament.
As reported, the Verkhovna Rada of Ukraine has adopted at the second reading bill No. 2280. It was supported by 320 MPs.
The bill establishes that the purpose of the land plot is determined by its owner independently, information about the type of purpose of the site chosen by the owner is entered into the State Land Cadastre. Establishing and changing the type of intended use of the land plot by its owner does not require the development of documentation on land management and decision-making by authorities, local authorities (except for defense lands).
The bill proposes settlement of community boundary issues; integrated spatial planning of community territories, while eliminating the need to develop several types of urban planning documentation and land management documentation related in content. It is also proposed rationing issues related to the approval of such documentation; rationing the formation of an electronic cartographic basis for territory planning; ensuring a real link between socio-economic development programs and spatial planning documentation; creating a mechanism for accounting for public and private interests through public discussion.
The Verkhovna Rada vote for the law on land sale is supported by 26% of Ukrainians, while 60% are against the law adoption, the results of the social survey assessing the success of the government and society’s response to the coronavirus disease (COVID-19) epidemic and political events in the country, conducted by Kyiv International Institute of Sociology (KIIS) on April 7-11.
“If a national referendum on the sale of agricultural land was held in the next week, 26% of those who are to participate in the referendum would vote in favor of the sale of land, and 74% against the sale of land,” KIIS said in a press release.
Some 32% of respondents believe that it is better now for Ukraine to cooperate with the International Monetary Fund (IMF) receiving new loans; 46% hold another opinion and said that it is now better not to cooperate with IMF and not to receive new loans.
The survey was conducted using the CATI method (computer-assisted telephone interviews) based on a random sampling of mobile phone numbers. During the survey, some 2,000 interviews were conducted in all regions of Ukraine, controlled by the government. The sample is representative for the adult population (18 years of age and older). The statistical sampling error (with a probability of 0.95 and taking into account the design effect of 1.1) does not exceed 2.2% for indicators close to 50%, 2.1% for indicators close to 25%, 1.4% for indicators close to 10%.
