On March 31, at an extraordinary meeting of the Verkhovna Rada of Ukraine, a law was adopted on the introduction of the agricultural land market from July 1, 2021.

Articles 130 and 131 of the Land Code of Ukraine are set out in a new version by law.

According to the new wording of Article 130, the following can acquire the right of ownership of agricultural plots of land:

a) citizens of Ukraine;

b) legal entities of Ukraine, created and registered under the legislation of Ukraine, whose participants (shareholders, members) are only citizens of Ukraine and/or the state, and/or territorial communities;

c) territorial communities;

d) the state.

Ownership rights to agricultural plots of land can also be acquired by banks only in the order of foreclosure on them as collateral. Such plots of land must be alienated by banks at land auctions within two years from the date of acquisition of ownership.

Foreigners, stateless persons and legal entities are prohibited from acquiring shares in the authorized (compounded) capital, shares, shares, membership in legal entities (except for the authorized (compounded) capital of banks) that are owners of agricultural land. This paragraph shall cease to be valid on the condition and from the date of approval in a referendum of the decision specified in the eighth paragraph of part one of this article.

Acquisition of ownership rights to agricultural land plots by legal entities created and registered under the legislation of Ukraine, participants (founders) or ultimate beneficial owners (controllers) of which are persons who are not citizens of Ukraine, can be carried out from the date and subject to approval of this in a referendum.

Under any conditions, including in the case of approval at the referendum of the decision specified in the eighth paragraph of the first part of this article, it is prohibited to acquire ownership of agricultural land plots:

1) by legal entities, participants (shareholders, members) or ultimate beneficiaries of which are persons who are not citizens of Ukraine – to agricultural land plots of state and communal ownership, agricultural land plots allocated in kind (on the spot) to owners of land shares (shares), and which are located closer than 50 kilometers from the state border of Ukraine (except for the state border of Ukraine, which runs along sea);

2) legal entities, participants (shareholders, members) or ultimate beneficiaries of which are citizens of a state recognized by Ukraine as an aggressor state or an occupying state;

3) persons who belong or have belonged to terrorist organizations;

4) legal entities, participants (shareholders, members) or ultimate beneficiaries of which are foreign states;

5) legal entities in which it is impossible to establish the beneficial owner (controller);

6) legal entities whose beneficial owners (controllers) are registered in offshore zones included in the list of offshore zones by the Cabinet of Ministers of Ukraine;

7) natural and legal persons, in respect of whom special economic and other restrictive measures (sanctions) have been applied in accordance with the Law of Ukraine “On Sanctions” in the form of a ban on concluding transactions for the acquisition of ownership of land plots, as well as persons related to them;

8) legal entities created under the legislation of Ukraine, which are under the control of individuals and legal entities registered in countries included by the International Anti-Money Laundering Group (FATF) in the list of countries that do not cooperate in the field of combating money laundering.

2. The total area of ​​agricultural land owned by a citizen cannot exceed ten thousand hectares. The total area of ​​agricultural land owned by a legal entity (except banks) may not exceed the total area of ​​agricultural land that may be owned by all its participants (members, shareholders), but not more than ten thousand hectares. At the same time, if a citizen owns a share in the statutory (composite) capital, in the unit fund of a legal entity or only individual shares, units, for the purposes of this article, it is considered that such a citizen, in addition to the land plots owned by him, also owns the ownership right to agricultural land plots with a total area equal to the area of agricultural land plots owned by the legal entity, of which he is a participant (member, shareholder) is, multiplied by the size of the share of such a citizen, expressed as a percentage, in the statutory (composite) capital, share fund of this legal entity.

3. Violation of the requirements of parts one and two of this article is grounds for invalidating the deed by which ownership of the land plot is acquired, as well as for confiscation of the land plot.

4. The procedure for verifying the compliance of the acquirer or the owner of the agricultural land plot with the requirements specified in this article is approved by the Cabinet of Ministers of Ukraine.

5. Calculations related to the payment of the price of agricultural land plots under civil law agreements are carried out in cashless form.

6. It is not allowed to acquire the right of ownership of agricultural plots of land under compensation contracts if the acquirer of the right of ownership does not have documents confirming the source of funds or other assets, at the expense of which such right is acquired.

7. The sale of agricultural plots of state and communal property is prohibited.

The law in Article 131 “Acquisition of ownership of land plots on the basis of civil law agreements” of the Land Code establishes that:

1. The conclusion of civil law agreements, which provide for the transfer of ownership rights to land plots, as well as the acquisition of ownership rights to land plots under such agreements, are carried out in accordance with the Civil Code of Ukraine, taking into account the requirements of this Code.

2. The purchase and sale of a plot of land is carried out in compliance with the pre-emptive right to purchase it. The preferential right to purchase a land plot can be transferred by its subject to another person, about which such subject must notify the owner of the land plot in writing.”

The law, in Article 145 of the Land Code, defines the termination of the ownership right to a land plot of a person to whom the land plot cannot belong by right of ownership and/or in connection with the violation of the obligation to alienate it within the period established by law.

By law, Chapter X “Transitional Provisions” of the Land Code is supplemented by Clause 6-1 with the following content:

“6-1. Citizens who have the right of permanent use, the right of lifelong inherited possession of land plots of state and communal property, intended for peasant (farming) farming, as well as tenants of land plots who acquired the right to lease land by re-registration of the right of permanent use in relation to the specified land plots before 2010, have the right to buy back such land plots in ownership with payment in installments of up to ten years at a price equal to the normative monetary valuation of such land plots, without conducting land auctions. In the case of the purchase of a plot of land with installments, ownership is transferred to the buyer after the first payment is made. The requirements of the seventh part of Article 130 of this Code do not apply to land plots that are purchased in accordance with this clause.”

The law also supplemented Chapter X “Transitional Provisions” of the Land Code.

“It is prohibited to alienate land parcels (shares), state and communally owned agricultural land plots, alienation and reassignment of privately owned agricultural land parcels allocated in kind (on the ground) to owners of land parcels (shares) located in temporarily occupied territories in the Donetsk and Luhansk regions, the Autonomous Republic of Crimea and the city of Sevastopol, except for their inheritance. Agreements (including power of attorney) entered into during the ban on the purchase and sale or alienation in another way of land plots and land shares (shares) specified in this clause, in terms of their purchase and sale, and in another way of alienation, as well as in terms of the transfer of rights to alienate these land plots and land shares (shares) in the future, are invalid from the moment of their conclusion (certificate).”

The law establishes that by January 1, 2024:

а) citizens of Ukraine may acquire the right of ownership of agricultural land plots with a total area of up to 100 hectares. The specified restriction does not apply to land plots acquired by a citizen before the entry into force of this paragraph;

b) it is prohibited to buy, sell or otherwise alienate in favor of legal entities land plots that are privately owned and classified as lands for commercial agricultural production, land plots allocated in kind (in the area) to owners of land plots (shares) for running a personal peasant economy, as well as land plots (shares), except for the transfer of land ownership rights to banks as a subject pledge, inheritance of land plots, exchange (exchange) in accordance with the second part of Article 371 of this Code of a land plot for another land plot with the same normative monetary value or the difference between the normative monetary values of which is no more than 10 percent and alienation of land plots for public needs. Agreements (including powers of attorney) concluded during the period of the ban on the purchase and sale or other method of alienation of land plots and land shares (shares) established by this subsection, in terms of their purchase and sale and other means of alienation in favor of legal entities, as well as in terms of the transfer of rights to alienate these land plots and land shares (shares) in favor of legal entities in the future (including the conclusion of previous contracts) are invalid from the moment of their conclusion (certificate)”.

According to the Law, “Until January 1, 2030, the sale price of agricultural land plots, allocated in kind (in the area) to the owners of land shares (shares), cannot be less than their normative monetary value.”

The law establishes that “The software of the State Land Cadastre provides information interaction between the State Land Cadastre, the State Register of Real Property Rights, the Unified State Register of Legal Entities, Individual Entrepreneurs and Public Organizations with the aim of obtaining information on the total area of agricultural land owned by an individual, as well as legal entities, a participant (shareholder, member) of which she is”.

Source: www.rada.gov.ua