Law No. 4198-IX, signed by the President on 28 October 2026 and published in “Holos Ukrainy” on 30 October 2026, reduces the Personal Income Tax (ПДФО) rate on rental income from real estate (residential and commercial) from 18% to 5% effective 1 January 2027. The reduced rate applies to both individual landlords (physical persons) and FOP (sole proprietors) on the simplified tax system (Groups 2 and 3) who opt for the “patent” rental regime. The 1.5% military tax remains applicable, making the total effective rate 6.5%. To qualify, landlords must register each rental agreement in the electronic “Rental Register” (Реєстр оренди) via Diia.Portal or the tax authority’s web cabinet within 10 days of signing. Unregistered agreements remain taxed at 18% + 1.5%. The law also introduces a simplified quarterly declaration (Form № РІ-2027) replacing the annual tax return for registered rentals.
Key Takeaways
- Mandatory Registration for Low Rate: The 5% rate is conditional on real-time registration of the lease contract. Late registration (within 30 days) incurs a UAH 510 fine but preserves the low rate; registration after 30 days subjects the entire period to 18% rate retroactively.
- FOP Group 2/3 Interaction: FOPs on Group 2 (revenue < UAH 5.4M) can now choose between the single tax (20% of minimum wage = UAH 1,900/month) and the 5% rental ПДФО per property. For high-rent properties (> UAH 38k/month), the single tax remains cheaper; for lower rents, the 5% regime wins.
- Non-Resident Landlords: The 5% rate extends to non-resident individuals owning Ukrainian real estate, provided they appoint a Ukrainian tax agent (property manager) to withhold and remit. Without an agent, the standard 18% withholding applies at source (notary/registrar).
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement