The Cabinet of Ministers of Ukraine has eliminated discrepancies that led to undervaluation of land plots and deprived local budgets of additional revenues. According to the Ministry of Economy press service, the relevant resolution amending the Methodology of normative monetary valuation (NMV) of land plots was adopted on May 27.
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It is noted that the new rules improve the overall methodology introduced after the 2021 reform and offer more effective solutions for community development. The resolution primarily removes the rigid attachment to the administrative center when determining basic indicators.
Previously, the determination of rental income depended solely on the population of the administrative center of the community. As a result, if there were other – larger or more economically active settlements within the community, the valuation of land plots across the entire community was undervalued. Now communities are allowed to use indicators of the most developed settlement for calculations.
A separate set of changes concerns land for recreational and resort purposes. Often, such plots are located in cities and towns and occupy large areas in attractive zones. After the Methodology was adopted in 2021, their normative valuation significantly decreased. Sanatoriums and resort complexes paid significantly lower taxes. Now such lands will be evaluated using the same coefficient as built-up land plots in populated areas.
In other words, based on a higher indicator, as they are actively used and generate income. In addition, the Government has specified the list of resort-recreational zones and officially included the city of Odesa in it.
“Improving the methodology of normative monetary valuation is primarily a step towards the financial independence of Ukrainian communities. We are removing artificial restrictions that caused local budgets to lose real income from land payments. The updated approaches to the evaluation of resort zones and the inclusion of Odesa in the relevant list will mobilize significant funds. This decision alone will bring about 300 million UAH annually to local budgets,” said Deputy Minister of Economy, Environment and Agriculture of Ukraine Denis Bashlyk.
At the same time, the resolution significantly simplifies the lives of businesses and land surveyors, thanks to three important changes:
Closing gaps when expanding the boundaries of settlements: until now, there was no mechanism to evaluate land plots when expanding the boundaries of settlements until a full assessment of the entire territory was conducted. The new resolution introduces a clear and understandable algorithm for such cases.
Consolidation of appraisal districts: the maximum area of one district has been increased to 1500 hectares, which will significantly simplify the work.
Up-to-date data on soil quality: evaluators can now specify soil agro groups based on real modern soil surveys. This will allow for obtaining the most accurate data. The rule applies to all lands except those of particular value.