The practice of paying equity participation in case of construction of facilities on the basis of a construction passport


The Law of Ukraine “On Amendments to the Tax Code of Ukraine and some other legislative acts of Ukraine regarding the improvement of the administrative review of the rates of certain taxes and fees” amended Art. 27 of the Law of Ukraine "On regulation of urban development". These changes stipulate that the construction of individual (manor) residential buildings, garden, country type not higher than two floors (excluding the attic floor) can be carried out on the basis of only a construction passport, if the area of such buildings does not exceed 500 sq.m. (it used to be 300 sq.m.).

At the same time, according to part 4 of article 40 of the Law of Ukraine “On regulation of urban development”, exemption from share participation is provided only for the same facilities, but with an area of up to 300 sq.m. No changes were made to the article.

By this time, developers traditionally believed that the construction of any object on the basis of a construction passport automatically exempted them from paying a share fee. But such a conclusion was only partially correct. Indeed, the developers of all the facilities that were built according to the construction passport were exempted from equity participation. But such an exemption was caused not by the presence of a construction passport (as many developers mistakenly believed), but by the total area of such objects (up to 300 sq.m.), completely coincided with the area of objects exempted from equity participation (also up to 300 sq.m.) .

Today, on the basis of a construction passport, it is already allowed to erect buildings up to 500 sq.m. But exemption from the payment of mutual participation remained only for facilities with a total area of up to 300 sq.m. In this regard, we want to warn developers that if they intend to build a building with an area of more than 300 square meters on the basis of a construction passport, there will be no benefit for exemption from share participation on the basis of part 4 of article 40 of the Law of Ukraine “On the Regulation of Urban Planning” act, and therefore a share payment will have to be paid for the entire area of the object, and not for a difference exceeding 300 sq.m. For example, in the case of the construction of an object with an area of 301 sq.m., a share fee will be paid for the entire area, that is, for 301 sq.m., and not for 1 sq.m.

In our opinion, appropriate changes should be made in part 4 of article 40 of the Law of Ukraine “On the regulation of urban development”, expanding the preferential area for share contributions to 500 sq.m. (by analogy with a construction passport, where there is already 500 sq.m.). But at present, the rules of the law are acting exactly as described above. Therefore, we advise construction customers to take this information into account when calculating the area of an object and choosing the type of document on the basis of which construction will be carried out.