Tax Implications For A Foreigner Buying Apartment In Ukraine
Buying an apartment in Ukraine seems quite a simple procedure at first sight. There are a lot of offers, apartments to fit every taste, color and price. But no matter whether you are a citizen of Ukraine or a resident of another country, you will predictably face a number of questions:
How to buy an apartment safely?
What is the procedure of transferring the title to the apartment?
How much tax will have to be paid when buying real estate and can this amount be somehow reduced?
How to properly check the apartment and the seller in order not to lose the money invested?
This is only part of the issues, because there are still nuances with the transfer of money into Ukraine, there are problems with the process of opening an account in the bank and certain established rules and requirements to executing such transactions in the market of Ukraine, about which a person may simply know nothing.
At the same time there is always a large amount of money at stake - because it concerns real estate.
The price of the legal consultation on taxes and purchase of real estate in Ukraine starts from USD 100. The legal consultation price will directly depend on the complexity of your issue and the amount of information you want to receive.
Please note! We provide not only consultations, but can independently decide all issues regarding the pre-sale inspection of the property in Ukraine and its safe purchase.
When ordering the related legal assistance service, the cost of the consultation will be included in the price of the main service.
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General information about tax implications for foreigners buying an apartment in Ukraine.
The tax rate may depend on several factors. But usually, when buying an apartment, you as a foreigner will pay 1% to the Pension Fund.
If you want to sell this apartment immediately (in less than 3 years from the date of purchase) - you will have to pay 18% of the income tax rate, as well as several other mandatory tax charges.
Foreigners often face a situation, especially when buying an apartment on the secondary market, when the seller does not want to pay the entire amount of fees, but offers to include such fees in the sale amount, and even better - to transfer the entire amount in cash. In such situations we always advise our Clients on the regulatory rules of the transaction and insist that all settlements are done via bank transfers.
You can also try to negotiate with the seller on dividing 1% of the cost of an apartment in half - after all, in fact, even 1% is a large amount. Here it is important to understand how to conduct a conversation with the seller, and where to fix the agreement.
As for the amount of the fees - there is no clear prohibition to include the amount of the fee in the price of the apartment, so the decision is left to the parties.
Please note! Now that we’ve touched the topic of taxes, let’s say that if you decide to rent out your apartment, the income tax rate will be 18%. However, there are some tax optimization schemes, such as the registration of an LLC in Ukraine, or entering into an agreement with a specialized agency, but that is a topic for the next article.
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Comprehensive legal support of the purchase and sale of real estate in Ukraine.
As part of legal support of the purchase of an apartment or other real estate, our lawyers offer you:
Assistance in obtaining the identification code in Ukraine - it is a must for the transaction and can be prepared by us within 1 day;
Conducting pre-sale inspection of the real estate you’ve chosen, or help choose an apartment and conduct its further inspection - we wrote about these processes in great detail here;
Assistance in preparation of the real estate purchase transaction - if you are in Ukraine, we will help you with translation of documents, agreement review and organization of the transaction at the notary. If you are outside of Ukraine, we will help you with a power of attorney and carry out the transaction on your behalf;
Consultation on how to properly deposit money into Ukraine, transfer it to the seller and pay taxes on the purchase of real estate in Ukraine.
After we understand your goals and needs we will make you an offer based on the type of service you need.
Last autumn we assisted our Client from Poland who had overstayed his stay in Ukraine, and had difficulties with opening a bank account. We found a reliable bank for the Client and helped him to make the transaction in Ukraine without any problems. Further we also helped him with re-crossing the Ukrainian border.
Do you want to cost-efficiently buy an apartment, house or office in Ukraine? Don’t hesitate to contact us! We will help you not only to check the real estate before buying, but we will also take care of profitability in your real estate transaction.
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