The Land Market for Legal Entities Will Work As Planned
Mykola Siutkin
You do business, we mitigate risks | Business Investment Risk Advisor | Co-founder of S&P Agency | Attorney | Co-publisher LDaily | Ironman
The Minister of Agrarian Policy and Food of Ukraine, Mykola Solskyi, recently announced that the second stage of the land reform will proceed without any changes, with legal entities able to buy land starting from 2024. This announcement came during the 15th International Conference "Agribusiness in Ukraine", emphasizing that all necessary registers are prepared and ready for this transition.
"The only remaining task is the integration of the Geographic Information System (GIS) with the cadastre and the sanction register maintained by the NSDC. This task will be completed within this year," Solskyi confirmed, "With this, the land market for legal entities will commence operations from January 1, 2024, as initially planned."
Solskyi further shared his vision for the market, opting for a strategy of liberalization instead of a harsher regulatory approach. He argued that current worldwide events and the endemic struggle should prompt accelerated reforms rather than causing stalling or delays.
"The global situation clearly shows that we cannot rely on foreign help; we must primarily help ourselves. The global competition for financial resources is fierce. Therefore, we must ensure our regulations are investment-friendly and comparable, if not superior, to other nations", Solskyi stated.
The land reform's subsequent phase is slated to start from January 1, 2024, which would enable legal entities to acquire land. The size of the plot, which a single entity can own, will be raised to 10,000 hectares. Up to now, only natural persons could buy agricultural land, and there was a limit of 100 hectares per entity. The changes in the land market were activated on July 1, 2021, as outlined in the Law of Ukraine "On Amendments to Certain Legislative Acts of Ukraine Regarding the Transfer of Agricultural Land".
Deputy Head of Digital Department, Denys Bashlyk, predicts that when the land market opens to legal entities on January 1, 2024, there will be an increase in prices in the Ukrainian land market. He anticipates long-awaited entries of legal entities intending to own land for the long-term development of investment projects, ultimately leading to price increases.
The current highest prices in the land market in Ukraine are recorded in Ivano-Frankivsk, Lviv, and Ternopil regions, where they have reached $2,000, $1,450,000 and $1,400 per hectare, respectively.
Serhii But, CEO of "Prozorro.Sales", reports at a press conference at the "Ukraine" Media Center that nearly 38,000 hectares of land are leased or sold through an electronic auction system, with the majority of these being assets of local authorities, cities, and towns.
Auctions for agricultural land form the majority of land auctions, constituting 70% of rental and 60% of sales auctions.
The overall land area that the "Prozorro.Prodazhi" system has auctioned stood at 2.7 thousand hectares for an aggregate cost of UAH 1.3 billion, and 35.1 thousand hectares were leased.
Acting Head of State Service of Geodesy, Cartography and Cadastre of Ukraine, Dmytro Makarenko stated that almost 80,000 hectares of agricultural land had been circulated as of the beginning of October 2023.
The second phase of the land market, commencing on January 1, 2024, will allow legal entities to own agricultural land with a limit of up to 10,000 hectares per entity. However, the sale of state and communal agricultural land, as well as sales to foreigners, will remain prohibited. The right to purchase land will firstly be offered to its tenant, and the minimum value of the land must not be lower than its regulatory monetary value.