Buying real estate by a foreigner in Ukraine

Buying real estate in Ukraine by foreigners is an issue that arouses considerable interest among citizens of other countries. It is especially relevant for those who plan to invest in the Ukrainian market, move to Ukraine for permanent residence or find housing for business purposes.

Ukrainian legislation allows foreigners to buy real estate in the country. A foreign individual can freely purchase an apartment, house, commercial premises or non-residential building, there are restrictions only for agricultural land. Let's consider in detail whether such a purchase gives the right to a residence permit, what documents will be needed for the transaction, how the process of acquiring real estate and many other nuances.

Restrictions on the purchase of real estate for foreigners

Although foreigners have the right to buy real estate in Ukraine, the legislation provides a number of important restrictions, especially when it comes to land. Here are the restrictions:

• Prohibition on buying agricultural land. Foreigners cannot be owners of agricultural land. Even in case of inheritance of such land, the foreigner is obliged to sell it or transfer it to another person within one year.

• Purchase of non-agricultural land by individuals. Foreign citizens can buy non-agricultural land plots, but only if the land is located within a populated area. If the land plot is located outside the settlement, a foreigner can buy it only on condition that it contains real estate that will belong to him.

• Restrictions for legal entities. A legal entity established by a foreigner may purchase land plots within populated areas for commercial activities, and outside populated areas - only if the plot already has real estate that belongs to this legal entity. If the land is owned by an individual or a local government body, a foreign legal entity will be able to purchase it only if it has a representative office in Ukraine.

Although the purchase of real estate in Ukraine for foreigners is quite realistic, the land issue requires special attention and legal advice to avoid violating the law.

Obtaining a residence permit in Ukraine when buying real estate

The purchase of real estate in Ukraine in itself is not a basis for an automatic residence permit. Still, it is possible to obtain a residence permit if a foreigner correctly organizes the process and fulfills certain conditions.

How to buy real estate in Ukraine to have a basis for obtaining a residence permit:

1. Register a legal entity in Ukraine. A foreigner can set up a company in Ukraine, even being the sole founder. This allows further acting as a director or an official employee of the enterprise.

2. Purchase real estate on behalf of a legal entity. The purchase does not yet give grounds for residence permit, but it can be part of business activities or investments justifying presence in Ukraine.

3. Form an employment relationship with a Ukrainian company (including your own). To do this, obtain a work permit and officially conclude an employment contract.

4. Apply for a residence permit on the basis of the work permit. A residence permit is issued for the duration of the work permit. A foreigner who owns a company can officially employ himself as a director and on this basis obtain a residence permit.

Purchased real estate in this case should not be the only basis for obtaining a residence permit, as it acts as a tool for conducting economic or business activities. Thus, the purchase of real estate can be part of a legal way to obtain temporary residence, if it is combined with official employment or entrepreneurial activity.

Documents to formalize a real estate purchase transaction by a foreigner

In order for a foreigner to legally purchase real estate in Ukraine, it is necessary to prepare and submit a number of documents. Registration is notarized, so all documents must be valid, if necessary translated into Ukrainian and certified in accordance with the requirements of the legislation.

Here are the documents that will be needed if the buyer is a foreign individual:

• foreign passport;

• identification code (tax number must be obtained in Ukraine before the transaction);

• notarized consent of husband/wife, if the buyer is married;

• notarized power of attorney to conclude the transaction, if the contract will be signed by a representative of an individual.

If the real estate will be bought by a foreign legal entity, in this case you need an extract from the company's register, the company's statute, documents confirming the appointment of the company's director, and the passport of the company's representative. Before concluding the transaction, it is best to consult a lawyer or a notary to make sure that all documents are prepared correctly.

The process of buying real estate by a foreigner

Buying real estate in Ukraine by foreign citizens is not much different from the purchase of housing Ukrainians. But this procedure has some peculiarities related to the execution of documents and transfer of funds.

The main stages of the procedure of buying real estate by a foreigner in Ukraine:

1. Selection of the real estate object. A foreigner can choose an apartment, house or commercial property by himself or with the help of a realtor.

2. Obtaining an identification code (INN). Without a Ukrainian tax number, a foreigner will not be able to conclude a transaction in Ukraine. You can get a TIN in 1-5 days by submitting an application to the tax service.

3. Verification of the real estate object and preparation of documents. At this stage it is important to check the legal cleanliness of the object, in particular the ownership, debts, arrests, encumbrances. It is best to entrust this task to a lawyer or an experienced realtor.

4. Opening an account in a Ukrainian bank. To transfer funds in hryvnias, a foreigner can open a bank account if he plans to pay for the real estate through transfer.

5. Preparation of the sale and purchase agreement. The transaction is formalized in a notary's office. The contract is drawn up in Ukrainian, and a translation is provided for the foreigner.

6. Signing of the agreement in a notary. The parties sign the contract, after which the re-registration of ownership in the State Register is carried out. The seller and the buyer must be personally present at the transaction or act through authorized persons.

7. Payment of the value of the object and mandatory payments. Payment can be made in cash (within the limits allowed by law) or through a bank. In addition, it is necessary to pay for the services of a notary, state duty and taxes.

The final stage is to obtain an extract from the Register of Real Estate Rights. The document confirms the ownership right of the buyer - a foreign individual.

Transfer of funds during the purchase of real estate by a foreigner: how the settlement takes place

Settlement between the foreign buyer and seller during the purchase of real estate in Ukraine must be carried out in strict compliance with currency and tax legislation. What nuances are important to consider before the transaction:

• officially the payment for the purchase of real estate is made only in hryvnia, even if the funds are transferred from abroad;

• the safest and legal way is a bank transfer to the seller's account through a Ukrainian bank - the buyer can open a current account in a Ukrainian bank or make a transfer from abroad in compliance with currency control;

• import into Ukraine of cash in the amount of more than EUR 10,000 is subject to mandatory declaration;

• the maximum amount of cash payment is UAH 50,000, anything exceeding the limit must be made through a bank;

• the bank or notary may request documents from the buyer confirming the origin of the funds;

• as Ukrainian banks exercise currency control over international transactions, the transfer must be consistent with the purpose, for example, "purchase of real estate", and must have the purpose of payment;

• by agreement of the parties, it is possible to use a letter of credit or a temporary deposit account with a notary.

It is best for a foreigner to consult a lawyer in advance about the procedure for transferring funds, so as not to delay the transaction due to possible errors in the payment destination or due to violation of the currency regime.

Taxes when buying real estate by a foreigner

When buying real estate in Ukraine, a foreigner must pay the mandatory payments, and it should be done before the notarization of the transaction or on the same day, as the law requires the notary to check the payment of the parties of the relevant taxes and fees.

What the buyer of real estate who is a non-resident pays for:

• Pension Fund fee of 1% of the amount of the real estate sale;

• notary fee for preparation of the sale and purchase agreement, registration of title in the Real Estate Registry and extract from the Real Estate Registry (approximately 100-200 dollars).

Other taxes must be paid by the seller of the property.

Advantages of buying housing by a foreigner through a real estate agency

For a foreigner who is not familiar with the nuances of Ukrainian legislation and market, cooperation with a professional real estate agency has a number of significant advantages:

• legal support - the agency provides verification of seller's documents, object, ownership history and legality of the transaction;

• protection from fraud - realtors screen out dubious options and check that there are no arrests and debts;

• assistance with TIN registration and account opening - the agency takes care of preparation of documents required by a foreigner for the transaction;

• preparation and translation of contracts - the agency provides notarized translation and support at all stages;

• saving time and effort - the agent helps to choose the best housing options in accordance with the request, conducts viewings and negotiates with sellers.

Buying through an agency is a convenient and safe option, especially if a foreigner is buying real estate in Ukraine for the first time. If you have plans to buy an apartment, house or commercial premises in Kyiv or Kyiv region, please contact the real estate agency "Mayak".