Today, experts agree that in the future, Ukraine will have a huge potential for foreign investors, because it will require a revival in almost all industries and spheres. It is also predicted that after the end of the war, the value of real estate in Ukraine will increase, among other things, due to the interest in the country in tourism.
The question therefore arises whether there are any restrictions on the purchase of real estate in Ukraine for foreigners, as well as what are the elements and conditions for concluding real estate contracts.
Ukraine has a state system of real estate registration, run by an administrative body, and not – as is the case in Poland – by a court. It should be emphasized right away that the ownership right to real estate is transferred upon entry in the state register, and not upon conclusion of the contract. An entry in the appropriate register therefore has a constitutive (dispositive) effect, which is a very significant difference in comparison with the Polish legal system.
A foreigner who intends to purchase real estate located in Ukraine must obtain a TIN in Ukraine. To do this, he must submit an appropriate application to the tax office.
The regulations exclude the purchase of premises for cash, so the price is paid by bank transfer. The exception concerns the purchase of new premises and houses, because in such a case it is possible to pay in cash at the cash desk or by bank transfer to the developer's account.
When concluding a real estate sale agreement, the seller must provide documents on the ownership of the real estate, the so-called technical passport of the object and a report on the valuation of the property (this can be done online on the website of the Ministry of Justice of Ukraine) and a certificate of persons registered in the premises. The sales tax (equivalent of the Polish tax on civil law transactions), for both Ukrainian citizens and foreigners, is 1% of the value of the property.
If minors are registered in the apartment, the Guardianship Office must give its consent to the sale of such apartment. In the absence of the guardianship authority's consent, the deed may be considered invalid.
It should be remembered that if there are any people registered in the premises or house, the new owner will only be able to deregister them through the court. This means that it is very important to check the property before buying and identify any "problem" properties. This also applies to the sale of real estate to the detriment of third parties, e.g. heirs in certain situations. For example, if the apartment was inherited without taking into account the rights of any of the heirs, then the court may invalidate the sale agreement for such an apartment.
Real estate sales contracts require the form of a notarial deed under penalty of nullity. The notary directly enters information about the change of owner into the register of real estate ownership rights.
When it comes to the sale of real estate , a foreigner can sell his real estate in Ukraine without any major problems by concluding a contract of sale or donation. But there are also nuances here. If a property is sold that a foreign citizen has owned for less than three years or if more than one property is sold during the year , the percentage rate of tax increases significantly. A non-resident will have to pay personal income tax in the amount of 18% of the sale price and the so-called military tribute in the amount of 1.5%. In a similar situation, a citizen of Ukraine will pay 5% personal income tax .
This entry contains general information on the legal issue discussed. It does not constitute legal advice or a solution to a specific case or legal problem. Due to the unique nature of each factual situation and the variability of the legal status, we recommend that you seek the assistance of a law firm for legal advice.