Transparency comes to Ukraine’s real estate, land transactions
The government took a giant step toward transparency this year by opening up databases for land titles and real estate property to the public. Doing business also got easier: most powers of the corrupt State Architectural and Construction Inspectorate – which issues building permits – were stripped.
Private notaries now have the rights to compete on equal footing with their state counterparts.
A property tax was introduced and the minimum lease term on agricultural land was extended to seven years, and 10 for irrigated land.
It will take the next year to provide a proper assessment of these measures, particularly those laws passed in line with decentralization. Making the land and real estate databases open to the public in July also introduced a significant law enforcement tool. It helps identify the misappropriation of state funds and proceeds of bribery among state officials.
Public information on real estate transactions is also a normal part of a market economy, helping government officials assess the values of assets for taxation.
“A few years ago it was considered dangerous or impossible to build a registry and open it to the public. But that turned out to be political color,” said Oleg Boichuk, counsel at Egorov, Puginsky, Afanasiev & Partners.
Searches can be made by individuals as well as property and is more transparent than databases in many Western countries, such as the British Land Registry where searches are limited to properties.
“It’s good for prosecution. It’s good for transparency,” said Roman Drobotskiy, a senior associate at Asters law firm. “I understand there might be privacy issues but right now maybe it's necessary. Maybe in some time when we have change, it can be reduced.”
local officials and make them more accountable.
However, not all local councils have applied for the rights to be transferred from Kyiv.
"We only expect to see (the effects) in the next year. Each city will be individual,” Boichuk said. “There are some concerns that it might increase corruption…but I think we should try this because the previous system was definitely not effective."
Lawmakers also granted private notaries the same rights as state notaries this year. In the past only the Ministry of Justice could register land plots and buildings. This highly centralized system made it a “slow and corrupt process” and businesses usually paid “a lot of money,” according to Aleksandra Fedotova, head of real estate at Spenser & Kaufmann law firm. The introduction of property tax in January was supposed to fill the budgets of local governments, but many have failed to introduce the tax and it doesn't seem to have affected many property owners. Local authorities only saw a 0.3 percent increase in their budgets from the measure by
Ukraine’s Economy Ministry has ambitions to place the nation in the top 50 of the World Bank’s list of countries where it is easiest to do business by next year.