In the USA and Canada, apartments are located in apartment buildings. These are buildings representing a complex of apartments that are rented out. Sometimes the entire building is owned by one person, company or investment fund. This is similar to an income-generating property. But often each individual apartment has its own owner. At the same time, such owner can transfer their apartments to a management company that handles the maintenance of the entire building and filling it with tenants.
How are Apartments and Flat Defined in the Legislation of Ukraine?
According to the state building codes GSN B2.2.-24-2009 "Buildings and Structures. Design of High-rise Residential and Public Buildings" apartments are flats for temporary residence of people with a high level of service.The term flat is defined by Article 382 of the Civil Code of Ukraine and denotes an isolated dwelling in a residential building, intended and suitable for permanent residence therein.
Since apartments are not intended for permanent residence, they have the status of non-residential premises. It is impossible to register a place of residence in apartments.
Why Do Some Developers Build and Sell Apartments Instead of Flats?
The primary reason is the intended purpose of the land plot, as well as the approved zoning and master plan of the city of Odessa. To build a multi-apartment building, it is necessary that the land plot on which construction is planned belongs to a residential zone. And additionally, such residential zone must be intended for the corresponding high-rise development.
There are 5 types of residential zones:
Zh-1 for individual residential buildings Zh-2 for attached residential buildings, up to 3 stories high Zh-3 for multi-apartment buildings from 4 to 10 stories Zh-4 for multi-apartment buildings from 10 to 16 stories Zh-5 for multi-apartment buildings without height restrictionsAlso, multi-apartment buildings can be built in business zones, for example G-1, G-2...
However, the coastal territories of Odessa belong to recreational (R), resort-medical (RL), and resort zones for recreation and tourism (RVT). Accordingly, a sanatorium or apartment complex can be built on such land plots. And a separate premises in such building will be an apartment.
Examples of such objects being built in Odessa today are KANDINSKY RESIDENCE, Calypso by Gefest.
What is the Difference in Utility Tariffs for Flats and Apartments?
If until recently water and energy carriers for the population were sold with a discount to the market price, today such discounts have been practically abolished. By the resolution of the Cabinet of Ministers of Ukraine No. 867 of October 19, 2018, from November 1, 2018, a reducing coefficient of 0.6943 was established relative to the cost of gas for industrial consumers, from May 1, 2019, such coefficient is 0.8. From January 1, 2020, all discounts for the population are canceled.
On November 8, 2018, Infoksvodokanal approved new water supply and sewage tariffs. Thus the tariff for enterprises (21.95 UAH/cubic meter) is lower than for the population living in multi-apartment buildings and having direct contracts (23.52 UAH/ cubic meter).
According to the Law "On the Electricity Market" Ukraine is transitioning to a new market model when the production and distribution of electricity will be separated. Already from July 1, 2019, it will be necessary to conclude contracts both for supply and for distribution of electricity. Tariffs will be formed based on the market situation and will no longer be regulated by the state. The difference in payment for electricity for the population and enterprises can only be in the night tariff, which was canceled for enterprises from January 1, 2019, but has not yet been canceled for the population.
What is the Difference in Taxation of Apartments and Flats?
Property owners in Ukraine are obliged to pay tax annually. The tax amount is tied to the minimum wage as of January 1 of the reporting year. And the tax rate is set by local self-government bodies. In Odessa - by the city council.
In 2019, individuals pay for 2018. The minimum wage in Ukraine on January 1, 2018 was 3,723 hryvnias.
Tax rates were established by the Decision of the Odessa City Council dated July 18, 2018 in the amount of:- for housing - 0.1% of the minimum wage (3.72 UAH per square meter of area)
- for non-residential premises - 1% of the minimum wage (37.2 UAH per sq. meter)
There are also certain benefits for housing owners, about them and about how you can avoid paying tax, read in the article How to Save on Property Tax.
Taxes When Selling Apartments and Flats
In case of purchase and sale of real estate, the owner, a natural person, pays income tax and a number of other fees and mandatory payments. More details about all such expenses in the article Expenses for Buying a Flat.
Tax rate - 5% of the value of real estate, but not lower than the estimated value. For flat owners, a benefit can be applied if the period of ownership exceeds 3 years. For apartment owners, there is no such benefit.Constructive Differences Between Apartments and Flats
When designing and constructing new buildings in Odessa Developers are forced to comply with stricter standards for flat lighting, thermal resistance of the building, presence of heating, construction density and some others, which they are not required to comply with when constructing an apartment complex.
Therefore, before purchasing apartments, we recommend studying the project more carefully and inviting a specialist. Moreover, such specialist services can be absolutely free for you! Call us and get full support for purchasing apartments or flats in Odessa's new buildings, starting from the process of individual selection of an object to your request to signing a contract with the Developer and making payments!
