Ukraine’s Real Estate Market 2026: From Complex Investment Schemes to Digital Transparency

Ukraine’s legal landscape for real estate has undergone a profound transformation since 2022, shifting from crisis management to systemic reform despite the ongoing security challenges. The changes that have been implemented cannot be considered ideal from the perspective of their practical application; legislative innovations occasionally lack consistency with other legislative acts and fall under the jurisdiction of various regulatory bodies, which leads to inconsistent interpretations of such changes. Although the formation of practice regarding the application of these new regulations is still ongoing and requires professional legal support, the forced pause in active construction during the early years of the full-scale invasion provided businesses with the necessary time to undertake thorough study and implementation of these changes. By now, 2026, and the Ukrainian real estate market offers foreign investors a qualitatively enhanced and more predictable regulatory framework.

Investment in Real Estate Construction

The Law of Ukraine No.2518-IХ On Guaranteeing Property Rights to Real Estate Objects to Be Constructed in the Future, effective since October 10, 2022, introduced a landmark framework for securing third-party investment in construction projects. Notably, the mandatory application of the aforementioned law is directly linked to the date of obtaining the construction permit; if the construction permit was obtained prior to the date of this law’s coming into force, the provisions of this law may be applied on a voluntary basis.

Among other things, the Law of Ukraine No.2518-IХ On Guaranteeing Property Rights to Real Estate Objects to Be Constructed in the Future provides that attracting funds from third parties is possible by concluding purchase and sale agreements of special property rights by the customer of construction, who is a legal entity or an individual entrepreneur, or by the developer of construction, who is a legal entity. A prerequisite for concluding the mentioned purchase and sale agreements of special property rights is the state registration of the special property right in the State Register of Rights to Real Estate. Additionally, a mandatory condition during primary registration is the determination of a guaranteed share, which is a pool of future real estate objects restricted in circulation until the commissioning of the completed construction object (construction phase and/or launch complex), with the aim of guaranteeing the completion of the respective object by other persons (including as a result of bankruptcy or financial insolvency of the customer/developer of the construction).

The financing mechanism for construction objects where the construction permit was obtained before the entry into force of the Law of Ukraine No.2518-IХ On Guaranteeing Property Rights to Real Estate Objects to Be Constructed in the Future, provided, among other things, for the use of collective investment institutes and derivative contracts, where the underlying asset consisted of either property rights to an apartment or the apartment itself, which did not yet exist. The use of this mechanism was attractive to the developer because:

1) the sale of the right of claim under a derivative contract may be considered exempt from corporate income tax in accordance with Article 141 of the Tax Code of Ukraine, provided that such an operation of a collective investment institute is classified as an operation with assets of a collective investment institute;

2) the operation of selling the right of claim for cash is not an object of VAT taxation according to Article 196 of the Tax Code of Ukraine.

The use of collective investment institutes and derivative contracts is also possible regarding construction objects where the construction permit was obtained after the entry into force of Law of Ukraine No.2518-IХ On Guaranteeing Property Rights to Real Estate Objects to Be Constructed in the Future. In such cases, the special property rights will serve as the underlying asset.

Furthermore, if the primary registration of ownership of real estate occurs in the name of the customer, the use of preliminary agreements or investment agreements is possible. Funds received under such agreements as payment for the cost of residential real estate objects, which after the completion of construction will become the property of the respective collective investment institute based on an investment agreement concluded by the asset management company of such an institute with the developer, are considered income from operations with assets of the collective investment institute and, accordingly, collective investment funds. As a result, such funds are exempt from corporate income tax according to Article 141 of the Tax Code of Ukraine.

Ultimately, the complex regulatory framework for third-party financing requires a meticulous approach to selecting investment mechanisms, ensuring that developers mitigate tax and criminal liabilities that could otherwise jeopardize the project’s viability.

Simplified Procedure for Changing Land Use Purpose

For the period of martial law and for five years after its termination or cancellation, it is permitted to establish and change the designated purpose of land outside of settlements if there is no approved urban planning documentation at the local level for such territories (the Law of Ukraine No. 3563-IX On Amendments to Certain Legislative Acts of Ukraine regarding the Simplification of Land-Use Reclassification to Attract Investment for the Rapid Reconstruction of Ukraine). These changes allow for the rapid implementation of construction projects for the placement of industrial and warehouse buildings, non-residential agricultural buildings, pipelines, electronic communication network lines and power transmission lines, and complex structures of industrial facilities. For comparison, prior to the changes, the procedure for developing and approving urban planning documentation at the local level and changing the designated purpose in accordance with this documentation could take several years; changing the designated purpose in a simplified manner in accordance with this law can take only 1-2 months.

The implementation of the simplified procedure for changing the designated purpose involves obtaining a reasoned conclusion from the urban planning and architecture body of the local council regarding the possibility of placing the real estate object provided for by law on the land plot. The request for obtaining the conclusion is submitted through the electronic user portal of the Unified State Electronic System in the Sphere of Construction. It is important to note that the conclusion is not only the basis for changing the designated purpose but is also a special type of urban planning conditions and restrictions. If urban planning documentation is approved in the future, further development of the land plot will be carried out according to the conclusion without taking into account the functional purpose of the territories determined by urban planning documentation.

In the event that the conclusion of the authorized urban planning and architecture body determines the impossibility of placing the respective object on the land plot, the conclusion must contain a reference to land-use restrictions violated by such placement and/or to a specific provision of a normative-legal act, building codes, or another normative document whose application is mandatory under the law, making the placement of the respective object on the land plot impossible.

Mechanism for Appealing Refusals to Grant Urban Planning Conditions and Restrictions

One of the problem issues in the implementation of construction projects is obtaining urban planning conditions and restrictions (UPCRs) that correspond to the developers’ intentions and enable the implementation of the construction project. More than a third of applications for obtaining urban planning conditions, according to the Unified State Electronic System in the Sphere of Construction, are refused. As a result, the launch of projects is stalled, construction costs increase, and investment attractiveness decreases. The National Agency on Corruption Prevention has repeatedly stated that the procedure for the customer to obtain urban planning conditions and restrictions in all regions of the country is characterized by significant manifestations of corruption, and customers face artificial barriers created by officials so as to obtain illegal benefits. Therefore, urban planning conditions and restrictions, which formally should repeat the requirements of urban planning documentation at the local level for a specific land plot are, in practice, provided by local officials on a discretionary and non-transparent basis.

The Decree of the Cabinet of Ministers of Ukraine On Amendments to the Resolution of the Cabinet of Ministers of Ukraine dated 24 June 2022, No. 722 finally introduced a mechanism allowing customers to appeal a refusal to grant UPCRs directly to the State Inspectorate of Architecture and Urban Planning of Ukraine (DIAM) via an electronic portal. Chief building inspection officials now have the authority to demand documentation from local authorities to review the merits of the refusal. These rules will remain in effect throughout martial law and for one year thereafter.

Choice of Architectural and Construction Control Authority

The Decree of the Cabinet of Ministers of Ukraine On the Implementation of an Experimental Project regarding the Peculiarities of Providing Administrative Services in the Sphere of Construction launched an experimental project allowing developers of low and medium-complexity objects (CC1 and CC2) to choose their regulatory body either a local architectural control body or the State Inspectorate of Architecture and Urban Planning of Ukraine. It is anticipated that this shift will enhance transparency and mitigate regulatory bottlenecks, as historical data reveals significantly higher refusal rates among local authorities compared to those of the national regulator (DIAM).

Furthermore, as of 1 April, 2026, architectural and construction control authorities must use the “Transparent Construction” application during on-site inspections for the commissioning of CC2 and CC3 objects. This ensures a controlled process involving mandatory digital documentation, video recording, and verification of key systems.

In conclusion, these structural reforms provide compelling grounds for optimism: increased transparency and comprehensive digitalization are repositioning Ukraine as a secure and predictable jurisdiction for international capital.