Investment company S1 REIT supports the adoption and implementation of a draft law on the taxation of income received through digital platforms as a tool for combating the shadow economy in the real estate rental market, the company’s press service told Interfax-Ukraine.
S1 REIT CFO Vadym Pavlushyna noted that real estate investment trusts (REITs) operate with full tax transparency.
“We pay all taxes required by law on behalf of our investors. Specifically, dividend income is taxed at a rate of 9% (personal income tax) and 5% (military levy). For us, this is the standard, which we conscientiously and strictly adhere to. However, let’s be frank: most of the rental market remains in the ‘shadows.’ This creates an uneven playing field. It is quite difficult to convince people to ‘play by the rules’ when loopholes for tax evasion exist. Not least, these gaps are caused by weak regulation and a lack of oversight. “If the new bill creates conditions under which it becomes harder to avoid paying taxes, this will be a positive signal for the entire market,” he commented.
He emphasized that not only the state stands to gain from regulating the industry, but also investors and property owners who verify their income.
“They will be able to freely manage their funds and not fear audits, as they will have official confirmation of their income sources. This has become standard practice in EU countries, and Ukraine will finally not be an exception,” Pavlushyin noted.
As reported, on April 8, the Verkhovna Rada adopted in the first reading, as a basis subject to further refinement, draft law No. 15111-d on the automatic exchange of information regarding income on digital platforms, which is a structural milestone of the new financing program with the International Monetary Fund (IMF) that Ukraine was required to implement in March.
The initial version of the bill (No. 15111), submitted by the Cabinet of Ministers, covered income from the rental of real estate and vehicles; personal services and the sale of goods received by an individual through digital platforms in amounts up to 834 times the minimum wage (approximately UAH 7.2 million as of 2026), as well as the introduction of a tax threshold of EUR 2,000 per year. The obligations of a tax agent will fall on digital platform operators.
Draft Law No. 15111-d is a revised version of the initial government document prepared by the Verkhovna Rada Committee on Finance, Tax, and Customs Policy. Unlike the first draft, the final text omits a number of provisions that businesses and industry experts considered excessive.
A key change in Document No. 15111-d is the introduction of a preferential tax regime for self-employed individuals. It provides that instead of the general rate of 19.5% (18% personal income tax and 1.5% military levy) for income received through digital platforms, a rate of 5% will apply. For the duration of this special regime, such income is also exempt from the military levy. This model applies to individuals whose annual income does not exceed the limit set for the second group of single tax payers.
The revised draft document also clarified the registration procedure: users of online services will not need to register as sole proprietors—self-employed status will be granted automatically after registering on the platform and consenting to the transfer of information to the tax service.
S1 REIT is an investment company specializing in investments in professionally managed income-generating real estate. The company operates under the Real Estate Investment Trust (REIT) model, providing investors with the opportunity to participate in the ownership and receipt of income from profitable properties without directly managing the assets.
Currently, S1 REIT’s portfolio includes two funds—S1 VDNG and S1 Obolon. The funds’ assets consist of apartments in income-generating buildings developed by Standard One.
The number of requests to rent apartments in Kiev in December 2022 increased by 3% compared to the pre-war level, the press service of the portal of new buildings LUN told Interfax-Ukraine.
Reportedly, the team iOS-application to rent apartments in Kiev bird has prepared updated statistics on the situation of demand and prices in the capital market.
According to the study, the median rent price of one-bedroom apartment in the capital continues to fall – up to 8,5 thousand UAH, which is 10.5% lower than in November. At the end of February last year it was 13 thousand UAH per month.
The median price of rent of one-bedroom apartments at the end of December was UAH 12 thousand, which is 14.2% lower than in the previous month. In February it was UAH 21.6 thousand.
For three-room apartments median price decrease was 9%. Now you can rent such apartment for the price of 20 thousand UAH. This is much lower than before the war prices, because in February 24, 2022 such housing would cost 46.1 thousand UAH per month.
Home Essentials, a world leader in production and rental of furniture and interior items, is launching production of furniture and mattresses in Kremenets (Ternopil region), head of the Ternopil Region Investment Office Vladimir Vasilevsky told Interfax-Ukraine.
According to him, all registration activities have already been completed and a site has been chosen for the production location.
“Kremenets community received a powerful American investor – LLC “Home Essentials Ukraine”. The project enters the stage of implementation and begins to live its own life – hiring employees, importing production equipment and forming a circle of suppliers,” he said.
According to Vasilevskyy, already in the second quarter of 2023 the shipment of products will begin. In the first phase of the project creates 50-60 jobs, by the end of 2023, 300 jobs will be created.
“The investor is transferring part of the back office operational processes from the headquarters in Hong Kong to Ukraine and managers and creatives – logisticians, marketers, etc. – will be employed here,” he added.
Mr. Vasilevsky estimates that, by analogy with similar factories in Ukraine, the production in Kremenets will give a turnover of about $12-15 million, “in the first months of work it is possible to export products at $ 0.5-1 million per month,” – he said.
We are planning to start exporting to Spain, Portugal, Italy and France, and in the second quarter of 2023 to most of the EU countries.
For the production start, on equipment and circulating assets, in the first half of 2023 will be about $ 1 million of investments, in the 2-3rd quarter – up to $ 5 million.
Oksana Donska, a board member of the Ukrainian Association of Furniture Manufacturers (UAM) and coordinator of furniture cluster development, said in a comment for Interfax-Ukraine that this investor is an example of active interest of foreign companies to our market and interest of local authorities.
“I met a representative of Home Essentials at an international exhibition, where UAM represented the products of Ukrainian furniture makers. It was a happy accident for him. Next we met at the buzzer. I gave him an analysis of the domestic market, data on the specifics of exports, told him about the geographical location of production in Ukraine. In four months, the Ternopil Region Investment Office team was able to secure the entry of the American investor,” Donska said.
Home Essentials is a world leader in manufacturing and renting out furniture and interior furnishings. The head office (headquarters) is in Hong Kong. The European office is in Madrid. The company operates in more than 26 countries.
Demand in the Ukrainian countryside real estate market has increased significantly in autumn 2022, most actively looking for houses with a generator, basement and own well, follows from the analytics of the portal “OLX Real Estate”.
“Ukrainians this fall were more interested in renting suburban real estate than last year. Thus peak of inquiries coincided with the large-scale bombardment of infrastructure on October 10 and 17 (38 thousand and 37 thousand inquiries respectively), and also with the statements about the possible blackout on October 31 (32 thousand). Overall, interest in out-of-town rentals in mid-November 2022 was three times higher than in November 2021,” the portal reported.
The most popular regions for the rent of a country house were Zakarpattya, Chernigov and Ivano-Frankivsk regions. At the same time the most number of variants are offered in Kiev, Dnepropetrovsk and Odessa regions.
More than half of the houses for rent are located within the city limits (54%), up to 15 km from the city – 39% of ads, 20-50 km – 8%.
The most popular offers of country houses on site OLX are brick houses (77% of ads), insulated with mineral wool (52%) with individual gas heating (57%).
According to OLX, the number of ads with the proposal to rent a country house with a generator during the fall has increased six-fold – up to 1177. There are 3,034 ads with homes with a well, with a basement – 441, and their number in November decreased by 12% compared to September.
Meanwhile, demand for homes with a generator quadrupled in the fall to 10 potential renters per listing.
According to OLX, the average cost of renting a house with a generator in the Kiev region is 80.4 thousand UAH per month, in Odessa – 43.8 thousand UAH per month, Dnipropetrovsk – 35.9 thousand UAH per month, Ivano-Frankivsk – 32.9 thousand UAH per month, Transcarpathian – 26 thousand UAH per month. The cheapest house with a generator is in Lviv region – on average for 25 thousand UAH/month.
Houses with a basement are from 21.9 thousand UAH/month in Ivano-Frankovsk region to 58.5 thousand UAH/month in Transcarpathian region, houses with a well – from 8 thousand UAH/month in Odessa region to 45 thousand UAH/month in the Kiev region.
The number of applicants for apartment rental in Kyiv in September for the first time during the full-scale war exceeded pre-war figures, the press service of the LUN new buildings portal reported.
According to data from the apartment rental app Bird, as of September 20, the number of applicants for apartments rental has reached 120% of the pre-war level. A month ago, in mid-August, demand reached the February level, and in July it was 90%.
According to the press service of LUN, in September, housing prices halted growth compared to the previous month. The median price for renting a one-room apartment in Kyiv fixed at UAH 9,000 in September, which is the same as in August. In July, the figure was UAH 8,000, while at the end of February, the median price for renting one-room apartments was UAH 13,000 per month.
The median price for renting two-room apartments in September slightly decreased compared to August – from UAH 15,000 to UAH 14,000. In July this figure was UAH 12,500, before the war – UAH 21,600.
At the same time, the median price for renting three-room apartments decreased from UAH 24,900 in August to UAH 20,200 in September, which is the same as in July. Until February 24, such housing cost UAH 46,100.
Declared rental rates in Kyiv decreased for premises in business centers of all classes by 7-8%.
As the press service of CBRE Ukraine told Interfax-Ukraine with reference to the carried out research, the declared rental rates vary in class A objects in the range of $23-28/square meter/month, and in B class objects – $13-23/square meter/month.
The effective rental rate for prime properties since the beginning of the year has remained stable at $25/square meter/month, as the demand for new high-quality rental space remained high.
According to CBRE Ukraine, the average vacancy rate in the office market has slightly increased since the beginning of the year to 14.4% (up by 0.4 p.p.). The vacancy is expected to be relatively well-distributed in the office real estate market. This is a good sign that rental rates will generally not change over the medium term.
