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FAQ: How to Buy an Apartment in Kiev, Foreign Property Ownership in Ukraine

What is involved in purchasing a property in Kiev for me as a foreigner?

To purchase as a foreigner, the regulations are the same as a native Ukrainian. You will need to have a passport and a tax identification number. If you don’t have the tax number, you need to translate your passport in any translation agency and apply for the tax number at a tax administration. In Kiev it's located here: Sholudenka street, 33/19, Kyiv, Kyivs'ka oblast, 04116, phone: 044 461 7612.

If you decide to sell your property and you have owned it more than 3 years, there are no additional expenses, except for a 1% state tax and payment for the notary services ($100-200). However, if you sell a second property within the same year or you sell the property you have owned less than 3 years, there is a 18% income tax for you as a non-resident.

Are legal contracts drafted by lawyers?

As for the lawyer, there is no cost as usually a standard notarized form is used. There will be a fee for the notary (about $200-$300), which is usually split between the buyer and the seller and a 1% Pension Fund tax.

What commissions are paid when purchasing a property?

For commission, it is 3-5% depending on the property price, and it is paid by the buyer.

Are there escrow services in Kiev?

No, we don’t have escrow. Usually the buyer pays a prepayment to the seller (the amount of prepayment is negotiable) and they sign a preliminary purchase agreement. It takes approximately up to one month to prepare the necessary documents for sale. If time is limited, we can expedite the process, but there are additional costs associated with this. Please contact us for further details. 

What is the current property market like in Kiev?

At the moment, there are no visible trends, up or down. Everything has plateaued, since the big fall in 2008. There are no more speculative transactions. Quality housing is still limited, so newly built structures are in demand. Older buildings (built from 1900-1980) are becoming less popular, and the price difference is significant. The real estate market reflects Ukraine society, as a whole. Since a middle class is not prevalent here, there are two types of properties that are popular: 1) economy class homes up to $100,000-$200,000 and 2) luxury housing over $1 million dollars.

What do I need to buy property in Ukraine?

To buy property in Ukraine as a private individual, a personal tax ID number must be obtained. In addition, there are other ways to purchase property, such as through the statutory fund of a legal entity or elsewhere. If there’s a decision to explore different options, we can arrange a professional legal service for you from our partner legal company. This is an additional legal service that will have to be paid for.

Are non-residents eligible for property loans? 

Established residency and a confirmed income are necessary to apply for a loan.

Are you required to pay any taxes on foreign funds transferred to Ukraine?  Any other restrictions or limitations?

We have strict foreign currency regulations in Ukraine. Before making any transaction, it is highly recommended that you consult a financial or legal advisor. As a real estate company, professional advice on this matter cannot be provided by All Star Kiev Realty, but our legal partner, Frishberg & Partners, is available to administer the proper services to minimize expenses during the transaction.

Also, more information about doing business in Ukraine can be found, in particular about real estate transactions, on their website: http://www.frishberg.com/index.php/en/briefing-papers

What is the minimum deposit/down payment when buying a house or apartment in Kiev?

When applying for a home loan, the down payment is typically about 30-50% down. However, not all banks provide mortgages in such a risky market. Interest rates are extremely high. The lowest interest procured in the past year in Ukrainian currency is 17%. Please note, due to this, most transactions are completed in cash.

Is full payment possible when purchasing a property?

Yes, most sellers actually prefer this.

How much is the corporate tax and personal tax?

There are different forms of corporate taxes, depending upon the form of legal entity chosen.  Also, it is dependent upon whether or not the legal entity is a VAT payer (20%). Basic is 19% (starting from January 01, 2014 – 16%) – profit tax and 20% VAT.

Personal tax-wise, it is 18% for residents and non-residents. Seeking professional legal advice on the tax issue is highly recommended.

Am I able to get a resident permit or PR in Ukraine? If yes, what are terms and requirements for qualification?

A temporary residence permit can be obtained if you have work permit. In essence, a company can be started and one can hire oneself. A permanent residence permit can only be obtained for a few specific reasons, such as: marriage to a citizen, having close relatives, who are Ukrainian citizens, etc. More detailed information about immigration law can be provided to you by a legal counselor.

What is the bank lending rate per year?

The lowest interest procured in the past year in Ukrainian currency is 17%.

What is the prevailing financial market in Kiev like?

Banks prefer fast, risky, and highly profitable cash loans over long-term mortgages.

Are foreigners eligible to buy any property, such as vacant, agricultural, industrial and housing lands in Ukraine?

Foreigners may buy all types of property, except for agricultural land.

What other services are offered by All Star Kiev Realty for me as a potential buyer (investor)?

For the Buyer, the following services related to the property are available: finding, advising on the condition of a particular property (in terms of its quality and possible hidden defects), negotiating, and handling the documentation process. In addition, we can find and recommend all necessary service providers (such as legal, engineering, finance, construction, etc.) However, all such services will be provided by other companies and need to be paid separately.

Does your agency perform the title search and other aspects of due diligence on the property to ensure that your client’s purchase runs smoothly?

No, this service is provided by lawyers

Do you also assist with obtaining a personal tax ID?

No, this service is performed by lawyers.

Is there assistance in handling of all other aspects of closing (i.e. helping your client set up a bank account to wire money)?

Yes, we are partnered with Ukrsibbank, who can help ensure that all money transactions go through smoothly.

After a sale is complete, is assistance available to register the property with the State Registry and to register with ZHEK, etc?

Yes, we perform all such tasks.

What role, if any, do lawyers play in a typical residential real estate purchase?

The most important legal service during such a transaction is due diligence. Also, if a transaction is not handled in all cash in the name of the private individual but other instruments (such as mortgage, rent-to-buy, setting up a legal entity with the property in statutory fund etc.) are used lawyers will work on such an agreement.

How should I best prepare for a potential investment? Should I have any information ready ahead of time?

The following info should be prepared for optimal service in recommendation prior to any inquiry in property: 1) the approximate size of investment in consideration, 2) the desired return, and 3) and the type of real estate that is most appealing.

Real Estate Services in Kiev

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