Problemi Ekonomiki (Jun 2017)
The Problems of Payment for Land at the Implementation of Investment Projects on Redevelopment of Industrial Areas in the City of Kiev
Abstract
The aim of the article is to determine the amount of fees to be paid by investors for the industrial areas subject to renovation at the stage of approving the relevant project documentation at implementing projects on redevelopment of these areas in the city of Kiev and identify a mechanism for encouraging and stimulating investments in this industry. Despite the complicated procedure for implementing a project on redevelopment (renovation) of industrial areas, it is worth noting that one of quite significant capital-intensive categories of investment activity that creates a certain additional “barrier” for investors is overhead cost, namely, payment for land. That is, at the stage of development, coordination of projects on reorganization of industrial areas, an investor has already to pay a fee for land plots gaining no economic income from these territories. The maximum amount of land tax to be paid by investors for the actual functional use of these lands is 72.51 million UAH / year. Thus, in order to make the redevelopment of large industrial territories attractive to investors, the city authorities should act as a full partner and take a number of obligations, namely, to introduce special investment rules and mechanisms, for example, to significantly shorten the time for review and approval of relevant projects (transferring industrial facilities, changing the purpose of land, constructing new real estate properties, etc.), grant tax breaks (“holidays”) for this period, take the responsibility for organizing the transfer of production facilities and defray part of the costs related to it and after completion of the investment project to transfer the land to the investor without equity participation in a predetermined period.
