Wednesday, 20, March, 2019

The draft presidential decree, developed by the Ministry of Justice which proposed allowing privatization of non-agricultural land plots in Uzbekistan.

The draft decree proposes to establish the procedure in accordance with which as of July 1, 2019:

  • legal entities, as well as individual entrepreneurs - residents of Uzbekistan shall have the right to privatize land plots, on which their property: buildings and structures are located, as well as industrial infrastructure facilities, as well as land plots adjacent to them, within areas necessary for conducting production activities, taking into account technological processes, urban planning norms and rules;
  • Uzbekistan citizens, as well as stateless persons permanently residing in the country, shall have the right to privatize land plots allocated to them for housing construction;
  • legal entities and individual entrepreneurs - residents of Uzbekistan, as well as citizens of Uzbekistan have the right to buy state-owned real estate in the course of privatization together with land plots.

Depending on the specific features of a land plot, it is planned to establish the principle of the integrity of land plots and buildings strongly connected them. This means that when ownership for building or structure passes to the buyer of the building or structure, the ownership for the land also shall pass to the buyer.

The draft provides that the privatization of land plots shall only be possible in relation to land plots located in cities, town, settlements that have master plans and detailed planning projects, as well as subject to the existence of cadastral documents on real estate.

The draft proposes until January 1, 2021, to set a land privatization fee based on their cadastral value, depending on the location, availability of utilities and other facilities, and after January 1, 2021 - at market value.

As part of the of Tax Policy Improving Concept, as of January 1, 2019, land tax shall be introduced for all business entities, including legal entities with turnover (revenue) less than 1 billion soums. To stimulate the privatization of land and delimit the status of the owner and user, it is proposed to establish a reduced land tax rate in the amount of half of the established rate for land owners.

Given that the land is the national wealth, the draft provides for the establishment of restrictions on the acquisition of land by foreign citizens and legal entities. In addition, categories of land not subject to privatization will be identified.

It is expected that the adoption of the decree will allow the country to become more attractive for foreign investment, mobilize domestic investment in the economy and eliminate outdated land legislation, and will also contribute to the involvement of land in civilian circulation.

Discussion of the draft document will last through November 1.

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