Land market in Ukraine: next step towards the finalization of land reform

Ukraine will open the land market on July 1 and takes active steps towards its effective functioning. The law on the opening of the land market was adopted in the spring of 2020. But in order for its provisions to be implemented, a number of other laws are needed.

Field
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Recently, the Ukrainian parliament adopted the Law of Ukraine “On amendments to the Land Code of Ukraine and other legislative acts to improve the system of management and deregulation in the field of land relations.”(№ 2194)  This law is extremely important for the reform of land relations and contains a number of important provisions:

  • From the date of publication of this Law, communities will get communal ownership of land outside the settlements.
  • The number of licensing procedures in the field of land management will decrease/ unnecessary permits and duplication of procedures for verification of land management documentation will be removed.
  • Independent control of land management documentation will be introduced through public examination / review will be introduced;
  • A clear procedure for exercising the preemptive right to purchase agricultural land will be introduced.
  • Information on land management documentation will now have the status of public, open and publicly available data.
  • Law will provide for integration and unification of land management, topographic, geodetic and cartographic activities.
  • Law will introduce professional liability insurance for land management contractors as an alternative to state control.
  • Law will promote reducing the cost of work and the length of time spent on procedures related to land management thus reducing the risks of bribery and corruption.

Next steps. The Rada will consider in the second reading the law on organization of land auctions in the electronic form (№ 2195), the law on the Loan Guarantee Fund and the right of state employees for the land shares.

Hands with soil

As of July 1, only the Ukrainian citizens will be able to sell and buy agricultural land, and not more than 100 ha to one person. Companies will get the right to buy agricultural land only after 2024, and possibility to sell agricultural land do foreign citizens will be decided at the national referendum, the date of which is still unknown.

Currently, the cost of one hectare of land in Ukraine is estimated at 30 thousand hryvnias. But prices may rise significantly after the opening of the market - gradually to 10-15 thousand euros per hectare, as is in the neighboring countries. Experts do not advise Ukrainians to sell their land parcels (through leases or other schemes) until July, and also ask not to hurry with the sale and after the opening of the land market.

"The main process that will take place in 2021 is the legalization of relations that have been formed during the decades of the moratorium. If the land has been leased for 50 years, this would mean the need to terminate the lease agreement and conclude a purchase agreement, which indicates the value, not less than the normative-monetary assessment of the land," said Minister of Agrarian Policy Roman Leshchenko.