We do provide full legal support for apartment acquisition in Ukraine. We are very experienced in real estate and our solicitors and lawyers have more than 10 years of legal practice in construction and property law. We offer from A to Z legal support during buying flat process. We will support you at each stage beginning from money transfer and opening of investment account till the day when you will obtain ownership documents for apartment in Ukraine. We do provide a written guarantee and we will be responsible for your successful apartment purchase in Ukraine. The cost of our services is only 1% from the cost of the property.
We are happy to share with you for free our practical information below that will help you to buy your residential in Ukraine.
How to buy an apartment in Ukraine?
Foreign citizens have the right to buy and to own any kind of apartments in Ukraine. There are no restrictions to buy any kind of property in Ukraine, except agriculture land. Also the number of apartments and dimensions of that residential that a foreigner can own is unlimited. You can acquire an apartment in Ukraine for personal use or as investment or for rent. Foreigners in Ukraine do have the same rights in buying apartments as Ukrainian citizens. In this article we will inform you about particularity of Ukrainian apartment acquisition process. Generally, there are two legal ways to buy a flat in Ukraine:
- Acquire already registered real estate from an owner (so called secondary real estate);
- Buy an apartment from developer company (so called primary real estate);
In the case if you are not a citizen of Ukraine and you do not have a permanent residence permit, first of all you need to transfer funds to Ukraine. Investment account in Ukrainian bank shall be opened. You can not buy any property in Ukraine with your individual account in non-Ukrainian bank. Consider that money transfer (including account opening) can take more than one week. So please take care of this before you will start apartment purchase process. Other important thing is that only banking money transfer in UAH is possible if you will acquire an apartment from developer or construction company. Even if the cost of property is mentioned in United State dollars or Euro, still the payment shall be in Ukrainian hryvnia. And always remember that inside of Ukraine, I mean between two accounts opened in Ukrainian bank, money transfer is possible only in Ukrainian national currency. Other very important thing is that all foreigners for property acquisition shall have Ukrainian tax id number and certified translation of passport.
How to buy an apartment from an owner in Ukraine?
This is the case when you have found an apartment that already belong to individual or to a company. The real first stage is the visit to the notary office. You need to find a good one because it is the notary to register the property rights on your name at the end. Consider also that to minimize any risks the notary shall be from the side of the buyer. Do your best to make all the process to be made by your trustee notary. It is very important because notary has responsibility for incorrect apartment purchase. And all the documents at every stage are to be verified by the notary.
First of all an apartment shall be registered in Ukrainian digital register of property rights. Consider that this register of real estate was introduced at 2012 in Ukraine. So in the case if the apartment you intend to buy was constructed before 2012 it is possible that it is not in this register. In such a situation it is not a problem and current owner of the flat shall take care of this. It can be done in a few days. Usually notary fee that include registration fee is 1% of valuation cost apartment.
If the flat is registered the next stage is real estate appraisal. It is always made for tax purposes. Property valuation shall be done by certified company or appraiser. It is made to have the official value of the flat because such a type of acquisition is taxable from 3,5% to 7,5%. The assessed value of apartment may differ from the real cost. Seller and buyer can negotiate on the amount of taxes that each party has to pay.
Next and stage of real estate acquisition is signing of the contract. This is to be done directly at the notary office. At this stage also full payment for apartment and payment of all the taxes shall be done. That is because under Ukrainian civil code a property rights for the new owner can be registered only if the full payment was made. If official evaluated cost of the flat is less from the real cost of the property in such a case cash payment to seller is possible. But all the official amount of payment to vendor shall be made by cashless money transfer. If there is more than one owner of apartment, the contract shall be signed by all of them. If the owner is married so his/her spouse shall give the permission for such sale. The fact of marriage and needed permission is to be checked by the notary.
Preliminary agreement is to be signed in the case if the seller is ready to give you a loan arrangement or deferment of payment. But you will not get a property rights under preliminary Ukraine contract of apartment acquisition.
The last stage of this process is the state registration of property rights on the name of buyer. As it was mentioned above, it is the notary to make such registration. Right after the agreement was signed and all the payments has been made a new owner of apartment is to be written in governmental database. Both buyer and vendor shall receive the contract of sale and purchase of an apartment that is certified by the seal (stamp) of the notary. The purchaser will receive also the extract from Ukrainian register of real estate rights in which the buyer is mentioned as the owner.
How to buy an apartment from developer company in Ukraine?
Ukrainian housing market is very fast growing. In Kyiv, the capital of Ukraine, you will find so many houses that are being constructed. Dozens of developer companies in Ukraine can offer you all the variety of apartments in Kiev. In this type of purchase the buyer is named as investor. You are not buying the apartment itself at the very beginning because from the legal point there is no flat at the stage of construction. So you will invest in construction financial fund with the aim to get the property rights after commissioning of house. The good thing is that you do not pay any taxes (except $200 registration fee) when you buy a flat or a house from a construction company. The bad thing is that due to still not very good construction law in Ukraine not all of developing companies do have proper documents and needed permissions. These are some of the problems that we have discovered in some residential buildings:
- absence or cancellation or expireof construction license;
- problems or absence of land ownership documents;
- stoppage of construction under a court decision or under an act of Ukrainian construction and architecturalcommission;
- high risk of failure or bankruptcy of construction company or developer.
Only in Kyiv there are more than 50 residential buildings that can not pass the process of commissioning due to the problems that mentioned above. Some houses has been constructed with no land ownership documents and investors can not get the property rights for apartments in such cases. Any way please consider that it is a bit more risky to purchase a flat at the stage of construction in Ukraine. But does not mean at all that you should avoid such purchase. So in the case if you have decided to buy a flat in the building under construction, you need to check property documents first. Legal due diligence of both construction company and needed permissions is strongly recommended. Consider also that when you will come to sales department of developer construction company, the documents issued on the name of the house will be on the name of the company that is different from the name of developer. It is normal in Ukraine. Our clients always pay attention on this because in their opinion it does not seem to be the right way. But the main thing is to check the following documents.
- Construction license of the company. It shall not be expired or cancelled. On the website of Ukrainian state building authority there is a list of issued and cancelled licenses. Construction license of Ukrainian company is a very important permission to make an activity in construction business.
- Declaration about the beginning of building works. Probably this is the main document. This is also shall be checked on the website of construction governmental authority. It shall be also reviewed at the website of Ukraine court cases, because some litigations are potentially possible.
- Construction company itself. You need to be sure that you will not invest in apartment that is constructed by corporation that is going to fail.
- Documents of investment financial company. This is the company that is acting as a financial construction fund and accumulate the money to pay for construction. Make sure that you are purchasing the flat in Ukraine through strong financial investment company that has all needed permissions.
- Contract or agreement on apartment purchase through investment. Usually most of companies do have their typical agreement on apartment acquisition. But that does not mean that it can not be changed in some unacceptable parts. Cash is the king and you can decide if some conditions of agreement are not ok for you. In this contract the price, apartment number, floor, dimension, payment terms shall also be mentioned.
You can make a payment to financial fund of construction only if all the documents are good and projected apartment is ok for you. Consider that you can ask for a discount if you will make a 100% payment. Investment company shall issue a certificate about the full payment during 10 days after the full payment was done. This document will confirm that the buyer of the flat has done the main obligation for this process. After the building was made you need to wait for commissioning process, when the house is connected to water, electricity, gas, etc. It may take some time if developer had some problems with documents. That is why it shall be checked at the very beginning. The ownership document on the name of investor are issued after commissioning. You will also receive a technical passport of the flat that is issued by bureau of technical inventory of Ukraine. In this passport will be mentioned the plan of apartment, the size of each room, floor, etc.
We hope that this article was useful for you and we always hope that you will find a lot of prosperity and success in Ukraine.
Sincerely your, Capital Law Consulting.