How can a foreigner sell an apartment in Ukraine?

Real estate in Ukraine is an excellent investment opportunity, including for foreigners. The law of Ukraine allows foreigners to buy almost any kind of real estate (with the exception of certain types of land), and to freely own and dispose of it.

It is not unusual when a foreign person wants to sell the earlier purchased apartment, house or office in Ukraine. And there is a whole range of questions:

  • When is it profitable to sell the apartment after the purchase?

  • Are additional documents required from a non-resident?

  • What is the procedure of reselling the apartment by a non-resident?

  • What are the tax implications when selling the apartment or other real estate in Ukraine?

  • How to check the reliability of the buyer of the apartment, etc.?

In this article we will try to answer all these questions and pay attention to the key aspects of the procedure.

If you want to know how to sell an apartment or other real estate in your case - contact our specialists for personal consultations and support.

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Resale of real estate in Ukraine by a foreigner

The procedure for reselling real estate involves the following preparatory work:

  • documents confirming the right of ownership to the apartment;

  • the technical passport (for the apartment) from the BTI (Bureau of Technical Inventory); 

  • the certificate on the number of registered persons in the apartment, issued in the housing cooperative or the condominium; 

  • statement about absence of utility debts; 

  • real estate appraising; 

  • personal documents - usually a translation of passport certified by a notary, TIN, which a non-resident usually has by this time (it is required when purchasing an apartment), as well as other documents, such as the consent of the spouse for the sale of the apartment;

  • the marriage certificate (if any). 

Making copies and translations of documents with notarization is a matter of hours. Real estate appraisal can also be done quickly through a special service. A problematic issue could be obtaining the apartment’s technical passport, if you have lost it while owning the property, or if the apartment/house/office has been rearranged.

In such a situation, the lawyer will check the relevance of the documents you have, and help to obtain the missing ones. 

Once the documents are ready, and a buyer is found, you can proceed to the agreement. At this stage, you will need to take care of the following aspects:

  • checking the reliability of the counterparty (buyer);

  • opening an account in a Ukrainian bank;

  • proper drafting of the purchase and sale agreement;

  • proper arrangement of the transaction at the notary.

If you want to be sure that the sale of the apartment will take place within the law and will not lead to problems, follow the basic rules:

  • Settlement of real estate transactions in Ukraine is made in hryvnia only - national currency, but if you want you can specify the equivalent amount in a foreign currency in the agreement;

  • It is recommended to make payment for real estate transactions through a bank transfer - for this purpose, you need a current account in a Ukrainian bank;

Note: Opening a bank account for a foreigner is a quick and easy procedure. Our lawyers can arrange this process and accompany the foreigner to the bank if he/she does not have an account at the time of the transaction.

  • You must check not only the counterparty, but also the notary where you are going to conclude a transaction - in our practice, we had a case where we insisted on changing the notary, because after checking it turned out that he had a criminal record;

Note: For the reliability and safety of the procedure, we personally arrange meetings with our trusted partner notaries.

  • If the seller or buyer of the real estate is married, the transaction will require a written notarized consent of the wife/husband;

  • When visiting the notary, if you are not fluent enough in Ukrainian, you will need a certified interpreter, otherwise the notary will not be entitled to conduct the transaction;

  • At the conclusion of the agreement it is important to make sure that the transaction does not imply double taxation for the Client;

  • When developing the purchase and sale agreement, pay attention to the state fee payment (often it is divided between the parties equally) and also choose the law of the country, which the parties will use in case of any disputes.

You may also like: Monetary Settlement Rules for Real Estate Transactions

What tax will a foreigner have to pay when selling an apartment in Ukraine?

In two rules are met:

  • the apartment was bought more than three years ago;

and

  • this is the first property to be sold in the current calendar year.

A non-resident is exempt from paying tax on the sale of real estate.

In all other cases, you will have to pay:

  • Personal income tax at 18%; 

  • Military fee at 1.5%.

In most cases, the buyer will have to pay a duty on obligatory state pension insurance at 1%. This payment is usually divided in half by the parties to the transaction.

Please note! Today we will talk about the sale of real estate by a physical person to a physical person. If we are talking about the sale of real estate in Ukraine by a foreign company, the taxation will be quite different. First of all VAT will be added and secondly you will have to pay attention to repatriation of income.

How to transfer money to a foreigner’s account after the sale of an apartment in Ukraine?

Having received the payment for the sale of real estate in Ukraine, the absolutely logical question would be the procedure of money transfer to your foreign account. It is necessary to understand at once whether such a procedure will not require unnecessary costs of money and time.

Unfortunately it is impossible to find a universal answer applicable to all situations when selling real estate in Ukraine.

After receiving the money for the sale of your property, you have the right to dispose of the money at your discretion, including transferring it to a foreign bank account. In this case, it is important to consider the fee of your bank and the domestic laws of the country of residence, and, if necessary, the country of location of the bank to whose account you plan to transfer the money.

At the same time the money must safely leave Ukraine, which is also sometimes difficult.

We have several times encountered a situation where a foreigner, when withdrawing funds for the sale of real estate from Ukraine, faced a requirement from the bank to confirm the origin of the money at the time of purchase of the apartment. That is, you must not only provide documents on the sale of the apartment, but also prove the way your money for its purchase was transferred to Ukraine, and their sources.

As a standard, when transferring money from one account to another, an individual goes through the standard financial monitoring procedure in the bank. For this purpose, the bank performs the Client’s identification procedure, which confirms:

  • passport of the Client;

  • availability of Ukrainian Taxpayer Identification Number (TIN);

  • source of origin of the money received on the account - in this case, the purchase and sale agreement.

However, when making money bank transfers you should take into account that transfers over UAH 400,000 may be subject to state financial monitoring, which may slow down their receipt to your account, and require additional interaction with authorities in Ukraine.

This is only a superficial analysis of money withdrawal from Ukraine, as each situation is unique and requires its own algorithm of actions.

When should I sell my apartment in Ukraine?

One of the important aspects in the process of selling a previously purchased apartment is the resale period.

Please note! At least 3 years must pass since the purchase of the apartment, otherwise you will have to pay income tax at 18%, as well as several other mandatory fees when reselling it. Thus, you will lose 1/5 of the possible income from the sale of the property.

The number of real estate sales per calendar year also matters. Only the first sale of real estate held in the reporting year will not be subject to additional tax.

Legal services to a non-resident selling an apartment in Ukraine

Our company offers a full range of services to a non-resident selling real estate in Ukraine. This means that you can get answers to all your questions in one place, and the sale will be safe and smooth.

We offer:

  • Legal consultation on the sale of real estate in Ukraine;

  • Preparation of all necessary documents for selling real estate in Ukraine;

  • Assistance in obtaining missing documents, arranging translation and copies of the required documents;

  • Drafting Real Estate Purchase and Sale Agreement;

  • Checking up counterparty;

  • Arrangement of the transaction at a reliable notary;

  • Legal support of the transaction;

  • Consultation on tax implications for a non-resident selling real estate in Ukraine.

Why us?

  • All the answers in one place;

  • A staff of English-speaking specialists who will ensure comfort and understanding for you;

  • A staff of proven notaries and translators;

  • Comfortable arrangement of the process with your minimal involvement;

  • Guarantee of your security.

You can check the cost of legal consultation and support for real estate transactions here. Or you can contact our specialists for a personal package of services.

Do you want to solve your real estate problem in Ukraine? Don’t hesitate to contact us! Our team will find the best option for you and help translate it into action. 

Didn’t find an answer to your question?

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Publication date: 27/10/2021

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