Buying Property in Ukraine as a Foreigner

Buying property in Ukraine as a foreigner is a real opportunity for a profitable investment or establishing a comfortable place to live, but it is important to consider the specifics of Ukrainian legislation. Foreigners are allowed to purchase real estate in Ukraine, but the process involves certain legal requirements, including property ownership rights and contract formalization. To ensure a secure transaction and compliance with all regulations, it is essential to carefully navigate the key stages, which we will detail.

Acquiring an apartment in Ukraine can be a profitable investment or an opportunity to establish a comfortable place of residence. A common question arises: can a foreigner buy an apartment in Ukraine? The answer is yes, but certain conditions must be met. However, this process requires careful preparation, consideration of legal nuances, and strict adherence to Ukrainian law. In this article, we will outline the key steps involved in the purchase process to ensure a secure and transparent transaction.

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How Can a Foreigner Purchase an Apartment in Ukraine?

1. Property Due Diligence

Before proceeding with the purchase, it is essential to verify the reliability of the property and the security of the transaction. The scope of due diligence depends on the type of real estate market.

• Ensure that the seller holds all necessary documents and that the property is free from encumbrances (mortgages, liens, arrests), unpaid utility bills, or other legal risks.
• For developers (in the case of newly constructed properties), it is crucial to verify their licenses, construction permits, the company’s reputation, the terms of the contract, and the deadlines for the completion of the project.
• A legal review of the sale and purchase agreement is mandatory, especially when the property is being purchased by a non-resident. The agreement must account for all potential risks, include mechanisms to protect the buyer’s interests, and clearly outline the procedure for resolving disputes.

2. Document Preparation

To complete the transaction, a foreigner must have:

• A Tax Identification Number (TIN)
• A notarized translation of their passport into Ukrainian
• A foreign passport
• Any additional documents (depending on the specific situation)

3. Financial Aspects of the Transaction

Payment for property in Ukraine must be made in hryvnias due to banking transfer regulations. To proceed with the payment, a foreigner must:

• Open a bank account. To make payments for real estate, a foreigner must open an account in a Ukrainian bank. Required documents typically include a passport, TIN, and other documents that the bank may request. It is advisable to contact the bank in advance to confirm the specific documents needed. Some banks may allow account opening remotely.
• Transfer funds to the account in accordance with currency control regulations. Transfers from abroad are subject to Ukrainian law. There are limits on transfers of up to 100,000 UAH, and the source of the funds must be confirmed.

Some Ukrainian banks offer mortgage loans to foreigners, though the terms and conditions may vary.

4. Closing the Deal

The real estate sale and purchase agreement must be notarized by a Ukrainian notary. If the buyer does not speak Ukrainian, a certified translator must be present during the notary meeting.

Once all terms have been agreed upon and the necessary documents are prepared, both parties sign the agreement, and the notary registers the property ownership in the State Register of Real Estate. The buyer then receives the documents confirming their ownership.

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Documents Required for Foreigners When Purchasing Real Estate

For a foreigner to successfully purchase an apartment in Ukraine, the following documents must be prepared:

1. Taxpayer Identification Number (TIN): This must be registered in the State Register of Individual Taxpayers, a process that typically takes 2–3 days. To obtain it, the foreigner must visit the tax office with the original foreign passport.
2. Notarized translation of the passport into Ukrainian: The passport must be translated into Ukrainian within Ukraine, and the translation must be notarized.
3. Foreign passport with an entry stamp or valid visa: The foreigner must be legally present in Ukraine, which is confirmed by an entry stamp or a valid visa in the passport.
4. If the property is to be jointly owned with a spouse, a notarized consent from the spouse is required.
5. A power of attorney, if necessary.

Although the list of documents required for an individual is relatively short, proper preparation and documentation require careful attention to detail. Legal assistance during the document preparation and verification process can help prevent delays and risks during the transaction.

Please note! All documents issued outside of Ukraine must be legalized (either with an apostille or consular legalization), unless otherwise specified by international agreements to which Ukraine is a party. Additionally, these documents must be translated into Ukrainian, with the translation notarized. It is recommended to have copies of all documents in both paper and electronic formats.

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Taxes for Foreigners When Purchasing Real Estate

When a foreign citizen purchases real estate in Ukraine, the primary tax obligation is a 1% payment to the Ukrainian Pension Fund. This fee is mandatory for all property buyers, including foreigners. It is important to consider taxes when purchasing property as a non-resident, as additional obligations may arise depending on the specifics of the transaction. If you plan to rent out the apartment, the income tax on rental earnings will be 18%.

Differences Between Buying in a New Development vs. the Secondary Market

For a non-resident, purchasing an apartment in a new development or on the secondary market involves specific legal and practical considerations.

Please note! Whether purchasing in a new development or on the secondary market, a foreign buyer must be legally present in Ukraine (with a valid visa or a temporary or permanent residence permit).

It is important to note that buying in a new development is typically structured as an investment in property rights until the building is officially commissioned. This means that you do not immediately become the legal owner of the apartment but instead acquire the right to ownership upon the project's completion. In contrast, on the secondary market, ownership is transferred immediately upon signing the sale and purchase agreement.

Regardless of your choice, to ensure a secure transaction, it is strongly recommended to seek assistance from a qualified real estate lawyer.

Secure Real Estate Purchase: How We Can Help

Legal support is essential for foreigners purchasing real estate in Ukraine, as the country’s legislation has its own specific requirements. Additionally, an experienced lawyer can help prevent potential issues that may arise during or after the transaction, ranging from problems with property documentation to fraudulent schemes by sellers.

Our legal team provides comprehensive assistance for purchasing an apartment in Kyiv or any other city in Ukraine, including:

• Legal consultation on real estate purchases in Ukraine based on the Client’s situation.
• Due diligence on the property before purchase.
• Assistance in obtaining a Taxpayer Identification Number (TIN) in Ukraine.
• Preparation of all necessary documents for the real estate purchase in Ukraine.
• Review of the agreement and verification of the notary before the transaction.
• Legal support throughout the entire real estate purchase process.

Remember, proper preparation and legal guidance are essential for a successful and secure real estate purchase in Ukraine.

We will guide you through the process smoothly and safely. Request a consultation today!