Law No. 4958-IX, which introduces unified property valuation rules in accordance with international standards, was recently adopted by the Verkhovna Rada.
What will the new Law change, how will it influence Ukraine's investment attractiveness, and what exactly will change for people selling, buying, donating or inheriting real estate?
Oleksii Movchan, Deputy Chairman of the Committee on Economic Development, discussed these issues in an interview with the Press Service of the Secretariat of the Verkhovna Rada of Ukraine.
— Why did the need arise to fully update the property valuation legislation that has been in force since 2001? What key challenges is the new Law designed to address?
Ukraine is moving toward European and Euro-Atlantic integration. This means that we have to align regulations in various sectors with international and European approaches. They do not necessarily have to be identical, but they must be compatible and clear to our partners.
Property valuation is a fundamental sector that requires regular updating. The 2001 Law indeed contained outdated approaches to regulating property valuation.
Property valuation is a vital element of asset circulation, ensuring the determination of asset value in line with the terms, nature, and purpose of transactions. It facilitates economically sound asset transactions, including their acquisition, disposal, pledging, and investment.
There are two key blocks of changes. The first is the introduction of international and European valuation standards. Currently, national valuation standards are in force in Ukraine. At the same time, authoritative professional organizations operate internationally, notably the International Valuation Standards Council (IVSC) and the European Group of Valuers’ Associations (TEGoVA), which develop valuation standards and promote best professional practices.
European valuation standards are based on international approaches and principles while remaining tailored to the legal and regulatory environment of the European Union. This allows for incorporating both universally recognized asset valuation approaches and the specific requirements of EU law.
The new Law provides for the introduction of international and European valuation standards in Ukraine, the application of which will become mandatory in accordance with statutory requirements. This is fundamentally important, as potential investors in Ukraine may represent not only European Union member states, but also the United States, Australia, Japan, and other nations. Operating in different regulatory environments, they may have varying requirements for asset valuation. Implementing international and European standards will allow these specifics to be taken into account, ensuring that valuation results are understandable and acceptable to a broad range of international partners.
Ultimately, this is primarily a matter of attracting capital and investment. Ukraine’s valuation system must be transparent to international partners, align with universally recognized professional approaches, and foster confidence in the valuation results of Ukrainian assets.
The second key area concerns a shifted approach to real estate valuation. Historically, Ukraine has separately regulated the valuation of a building and the land plot beneath it. This creates challenges, as a building may belong to one entity, while the land under it belongs to another. Similar difficulties arise when an individual purchases a land plot encumbered by another party’s real estate asset. Such situations complicate real estate transactions and generate additional transaction costs. Previously, the valuation of buildings and land plots was also carried out by different professionals. The new Law provides for combining these areas within a unified professional system. A building and the land plot beneath it will be treated as an interconnected real estate asset, and their valuation must be reflected in a single report. Thus, the reform pursues two main objectives: integrating international standards into the Ukrainian system and consolidating valuation approaches for buildings and land. This is intended to simplify real estate transactions, cut unnecessary costs, and facilitate investment attraction.
— What exactly will change for citizens selling, buying, donating, or inheriting real estate?
For individuals, no drastic changes in everyday real estate transactions are expected. We are primarily speaking about regulatory standards rather than an automatic shift in the market value of property. For example, if a square meter of real estate in Kropyvnytskyi costs around one thousand dollars, with a certain variance depending on the specific asset, the change in valuation standards itself will not mean that this property will instantly appreciate or depreciate in value.
The greatest impact is anticipated for legal entities and financial institutions. First and foremost, this concerns building greater confidence in valuation during bank lending and other financial transactions. This is crucial for the economy as a whole. For citizens, the main change is that valuation reports will become far more trustworthy. Currently, there are cases where property valuation is effectively tailored to meet the client's desired outcome. While such actions can entail liability, the new rules are designed to make such manipulation significantly more difficult.
Furthermore, the Law enables foreign valuers to operate in Ukraine while simultaneously creating the conditions for Ukrainian valuers to access foreign valuation markets. In doing so, the principle of reciprocity will apply: if another state guarantees Ukrainian valuers unhindered access to its market without requiring additional examinations or licenses, identical conditions will apply to that state's valuers in Ukraine. At the same time, it is important to recognize that the Law has only recently been passed, and much will depend on its practical implementation. It is the implementation phase that will ultimately demonstrate how effectively the new rules operate.
— Will the new Law provide for specific valuation rules for state- and municipally owned land plots? How will the role of the state in this market change?
We do not establish special valuation conditions simply because property is state- or municipally owned. One of the core principles underpinning Ukraine’s modern economic policy is competition. State, municipal, and private entities must operate under clear and predictable rules. At the same time, there are specific nuances associated with the privatization of state and municipal assets. These must be taken into account, but they should not serve as grounds for unjustified advantages or special regulation based solely on the form of ownership.
Instead, the Law mandates the compulsory state registration of valuation reports for state and municipal property, as well as peer reviews of such reports. This measure is aimed at ensuring transparency in public asset management, increasing openness regarding valuation data, and mitigating the risks of potential abuse.
— The Law provides for a dedicated property valuation framework to assess damages caused by the war. What key challenges in this section of the reform designed to address?
Ukraine is navigating a full-scale war, which requires us to account for circumstances where standard international rules do not always provide ready-made answers. While international standards must remain the foundation of valuation, Ukraine needs the flexibility to introduce supplementary regulations tailored to its own needs and realities. For example, our "eVidnovlennya" (eRecovery) mechanism is already operational, offering compensation for damaged or destroyed housing. This process has unique characteristics, particularly due to state budget constraints, donor involvement, and the sheer volume of residential properties requiring assessment. At the same time, the issue of business losses lacks a similarly comprehensive regulatory framework. While enterprises can attempt to prove their losses in court, a systemic approach covering all such cases remains absent. Therefore, we are laying the groundwork for a broader regulatory framework for war-damage valuation. It is designed to accommodate diverse circumstances and resolve key challenges in determining the extent of the damage inflicted.
— How will the new system interact with existing damage assessments and documents already submitted by citizens and businesses to claim compensation?
This issue requires a separate approach. We must take into account that the nature of war-inflicted damages can vary significantly depending on the circumstances. For instance, there are assets located in temporarily occupied territories, as well as property damaged by strikes in rear areas. In some cases, records concerning assets or their condition have been lost altogether. Each of these situations may require distinct approaches to damage assessment. Therefore, it is essential to build a system that accommodates these differences. At the same time, I would not claim that this Law alone provides comprehensive answers to all compensation-related questions. Its primary objective is the introduction of international valuation standards and a shift in approaches to real estate valuation.
— How is the reform designed to protect citizens and businesses from the artificial overvaluation or undervaluation of property?
This is one of the most complex components of the reform. In my seven years of service in Parliament, I can say that this is among the most challenging reforms I have ever worked on. The valuation market was deeply troubled, involving criminal proceedings and various fraudulent schemes. A multitude of conflicting interests had consolidated in this sector, making a balanced solution difficult to achieve. The underlying complexity stemmed from the numerous market participants, each representing distinct interests and attempting to defend their own positions. Parliament’s objective in such a scenario is to balance those interests and establish rules that function effectively for the entire system.
A pivotal decision in this process was the reform of the professional self-governance of valuers. Currently, valuers operate largely in isolation from one another. While they hold the necessary credentials and must fulfill statutory requirements, the professional community lacks an effective mechanism for collective accountability. Although professional associations of valuers exist, their activities do not form a unified regulatory framework. They may conduct training, draft codes of ethics, and build expertise, but this is insufficient for comprehensive oversight of professional activities. At the same time, the state lacks the resources to independently and effectively monitor all market practitioners.
According to the data I previously presented, around 14,000 valuers were historically registered in the system, whereas today that number stands at approximately 3,000. A portion of those records accounted for individuals who were no longer actively practicing, pointing to systemic deficiencies in record-keeping and oversight. Consequently, we have provided for a more systemic regulatory model for the market. It is designed to unite the professional community, strengthen its accountability, and preserve the state’s capacity to oversee statutory compliance.
— What role will the National Chamber of Valuers play in the new system, and how will it operate?
Once the Law enters into force, the National Chamber of Valuers will be established. The vision behind it is to create a unified framework representing the professional community under the principle of "one voice." The Chamber will consist of self-regulatory organizations of valuers, encompassing both existing bodies and new entities founded by valuers themselves. These organizations will form a collegial governing body, elect leadership, and the chairperson will represent the profession’s interests at the national level. This model can be broadly compared to a parliament, where factions and parliamentary groups represent the interests of MPs; in our case, self-regulatory organizations will fulfill that role.
We do not intend to diminish the experience accumulated over nearly 30 years of the profession's existence in Ukraine. Established organizations have contributed significantly to industry development, notably in training specialists and cultivating professional ethics. This expertise must be preserved, while simultaneously making the system more accountable.
Additionally, we have embedded a safeguard against the usurpation of power. If the new model proves ineffective or the single organization fails to carry out its functions, valuers will have the mechanism to change the system. In such an event, an all-Ukrainian convention can be convened to transition to an alternative self-regulation model based on the principle of "one valuer, one vote."
— The Law provides for the creation of two state electronic registers: the Register of Valuers and the Register of Valuation Reports and Peer Reviews. What functions will they serve, and who will have access to the information?
The new Law provides for the establishment of the Unified Register of Valuers of Ukraine. Rather than acting as a simple directory of specialists, it will function as a centralized electronic system facilitating interaction between valuers and the State Property Fund of Ukraine, the Qualification and Disciplinary Commission of Valuers, self-regulatory organizations, and the National Chamber of Valuers of Ukraine. Through dedicated online portals, valuers will be able to exchange documents, undergo required administrative procedures, verify continuing professional development, and execute other actions stipulated by law. This will automate a significant portion of procedures, lighten the administrative burden on valuers, make professional regulation more transparent, and minimize corruption risks.
Simultaneously, the register will perform a key informational function. For citizens, it primarily offers a tool to verify whether a given specialist is authorized to conduct property valuation and whether their credentials remain valid. For the state and the professional community, it serves as an instrument to track valuers, monitor their professional status, and ensure the proper operation of the valuation market. Thus, this reform goes beyond organizing data—it represents a transition toward a modern digital regulatory model for valuation activities that is more convenient for professionals, clearer for citizens, and more transparent for all market participants.
The second registry—the Register of Valuation Reports and Peer Reviews—serves a distinct purpose. This Unified Register focuses on public rather than commercial valuations—for instance, when an assessment is commissioned by the state, or when the National Bank requires financial institutions to perform a valuation and submit the report to the registry. It acts as an additional mechanism for quality control across large datasets and within key sectors subject to state regulation, particularly the financial services industry. At the same time, registration will not be mandatory for all valuation reports. The legislation defines the specific categories of valuations and entities for which the state may impose this requirement. In such cases, the register will serve as a secondary verification tool for both the valuation process and the resulting report. Where necessary, law enforcement and tax authorities will also have access to this information. In essence, the objective is not to mandate the logging of every single valuation report, but to ensure robust oversight in sectors where state regulation specifically requires it.
— The Law introduces disciplinary liability and fines. What specific violations can lead to fines for valuers, and how will the amount of these sanctions be determined?
Significant attention in the new Law is devoted to the accountability of valuers. To this end, the Qualification and Disciplinary Commission of Valuers (QDCV) will operate, comprising representatives from both the National Chamber of Valuers of Ukraine and the state, acting through various governmental bodies. The Commission will review infractions and issue decisions regarding the enforcement of professional liability against valuers.
Primary focus will be directed toward violations that directly undermine the validity and independence of valuations. This applies first and foremost to any manipulation of property values, the concealment of such manipulation during report peer reviews, and breaches of conflict-of-interest rules. Depending on the nature and severity of the infraction, sanctions will range from temporary suspension to permanent revocation of the right to engage in valuation activities. These restrictions will be enforced and reflected directly through the Unified Register of Valuers of Ukraine.
Additionally, measures of professional liability will include mandatory early re-certification of continuing professional development. Concurrently, we are working to elevate professional standards among valuers and overhaul their training framework. Specifically, this entails strengthening qualification criteria and ensuring test transparency through mandatory video recording of the examination process. Our objective is to establish a framework where a valuer's professional competence, independence, and integrity serve as the bedrock of public trust in valuation outcomes.