Inherited land can be sold without paying taxes — two main conditions

To avoid paying personal income tax and military levy, the requirements regarding the number of sales and the land area must be met simultaneously. Follow the latest news on SUD.UA social networks Selling a land plot inherited does not always mean the need to pay taxes on the income received. Tax legislation provides a benefit for owners of inherited land, but it can only be used if certain conditions are met. At the same time, it is not necessary to wait three years after the inheritance registration for a tax-free sale of such a plot. When the sale of inherited land is not taxed Income from the sale of a land plot inherited may not be taxed if two conditions are met simultaneously. First, such a sale must be carried out no more than once during the calendar year. Second, the area of the land plot must not exceed the norms of free land transfer established by land legislation. Thus, not only the origin of the land plot matters, but also its area and the number of real estate sales transactions the owner makes during the year. Is it necessary to own inherited land for more than three years The requirement to own the property for more than three years does not apply to land plots inherited. This means that after proper registration of ownership rights, the heir can sell the land plot without waiting for the three-year period to expire. If other legal conditions for applying the tax benefit are met, the income from the sale will not be taxed. For which land plots can the tax benefit apply Preferential rules can apply, in particular, to land plots whose area does not exceed the legally established norms of free transfer. For personal farming, this norm is up to 2 hectares. For gardening — up to 0.12 hectares. For individual dacha construction — up to 0.10 hectares. For household land plots, the corresponding limits established by the Land Code of Ukraine apply. Example: sale of an inherited plot for 400 thousand hryvnias For example, a citizen inherited a land plot of 1.5 hectares intended for personal farming and sold it for 400 thousand hryvnias. The area of such a plot does not exceed the established norm of 2 hectares for this type of land use. If this is the first sale of the respective object during the calendar year and other conditions of the tax benefit are met, the income from the transaction is not taxed. In this case, the seller receives the entire amount without paying income tax on this sale. When taxes must be paid on land sales If the area of the land plot exceeds the legally established norms or the specific transaction does not meet the conditions of the tax benefit, the income received from the sale is subject to taxation. In this case, the following apply: personal income tax — 5%; military levy — 5%. At the same time, when determining the taxation procedure, it is necessary to consider the number of real estate sales transactions made during the calendar year. If a person sells a second real estate object during the year, the taxation rules may differ from those applied during the first sale. What to check before selling inherited land Before concluding a sale and purchase agreement, it is advisable to check the area and designated purpose of the land plot, as well as to clarify whether the transaction meets the conditions for applying the tax benefit. It is also important to consider how many real estate objects the owner has already sold during the current calendar year. This will allow you to determine in advance whether there is an obligation to pay personal income tax and military levy and what the amount of tax liabilities may be. Subscribe to our Telegram channel t.me/sudua and to Google News SUD.UA, as well as to our VIBER and WhatsApp pages on Facebook, on Instagram and on X to stay informed about the most important events.