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Buying a property in Ukraine is becoming more appealing to both individuals and businesses. Real estate is available to clients in major Ukrainian cities, including Kharkiv, Dnepropetrovsk, Odesa, Lviv, and Kyiv. Non-citizens may buy apartments on the secondary market or in brand-new buildings. What you like is the deciding factor. Regardless, in both circumstances, all paperwork and data must be double-checked. These two choices aren’t identical.
Firstly, choose a legal agent to act on your behalf in purchasing the flat or Ukrainian house by issuing a power of attorney. No matter whether you’re Buying property in Ukraine or an apartment via the main or secondary market, PayMeHere is here to help you through each step of the process. Next are the steps to purchase property for sale in Ukraine.
Step 1: Due Diligence
Just as with an apartment or Ukrainian house in brand-new construction, you shouldn’t rush into Buying property in Ukraine on the secondary market just because you saw it. Do your research first. The following documents and data must be verified as part of the due diligence procedure:
Legal Status of the Property
Verify the building’s status of the flat. It might be possible to find out by consulting the State Register of Ukrainian Immovable Monuments of State and Municipal Importance, but is it a building or artefact of cultural heritage in Ukraine?
In such case, you’ll have a tough time checking all the little details—like whether the Ministry of Culture has given their approval for the apartment’s alienation, whether a protection contract is in place, whether the monument’s technical condition has been updated every five years, whether the one-month term has expired, throughout which the Department of State of Cultural Heritage Protection has its entitlement to privileged purchase, etc.
Title Deed
The property’s title documents, including a purchase and sale contract for the apartment or another document proving the seller’s ownership (e.g., a certificate of ownership, a deed of gift, etc.), the apartment’s technical certificate (e.g., a passport), and an extract from the Register of Titles to Real Estate or a Certificate from the Bureau of Technical Inventory (BTI) confirming the registration of the previous owners’ ownership rights.
Mortgages, Arrests, and Limitations
You can look up the Ukrainian house’s mortgage status in the Register of Titles to Real Estate or see if it’s involved in any lawsuits in the Unified State Register of Court Decisions and Registry of Enforcement Proceedings.
Verification
The seller’s identity must be confirmed, including their marital status (written authorization from the spouse is needed to sell the flat if they are married), any children or disabilities they may have, and any outstanding debts that have not been paid off. It must be verified that the entity in question is neither bankrupt nor involved in any legal procedures if it is a corporation.
The alienation of the residence requires the approval of the custody and guardianship agency if the apartment is owned or used by minors. Otherwise, the court may rule the contract unconstitutional if it violates or limits the extent of the child’s existing property for sale in Ukraine’s rights, which might lead to a lengthy legal struggle and the loss of your dwelling.
Other Considerations
- Apartment ownership documentation (such as a passport, tax ID number, marriage/divorce license, birth certificate (if one of the owners is a minor), etc.).
- Verify the apartment’s utility payment debts, if any exist.
- Updates to the listed residents of the unit
- To verify that no children or people with disabilities have any claims to the flat, you may ask a notary public to look into the people’s records if the seller refuses to provide you with this information.
Step 2: Pre-Sale Contract Negotiations
Negotiations with the real estate seller may begin when the due diligence phase is completed and a Presale (deposit) contract can be signed. Price, payment procedure, conditions, and responsibility for non-signing the main agreement are all agreed upon by the parties by the Presale contract.
In a typical Presale contract, the buyer often puts down a deposit to indicate his willingness to purchase the apartment or the Ukrainian house, and the seller promises not to sell the unit to anyone else. This ensures the rights of all parties involved. If the buyer fails to finalize the main contract by the specified date, the seller will retain the entire deposit amount. The buyer will get their twofold deposit back if the seller refuses to finalize the main contract.
Step 3: The Apartment Sale and Purchase Agreement
Everything is coming together to finish the deal. The apartment or Ukrainian house sale and purchase agreement (henceforth – “SPA”) will be finalized and notarized, and a notary will record the ownership rights in the Register of Titles to Real Estate.
The parties are required to do the following before having the SPA notarized:
- Because the asking price must be more than the apartment’s typical market worth, you must thoroughly evaluate the property for sale in Ukraine.
- One per cent of the property’s worth is the required pension tax (fee). In most cases, the buyer is responsible for paying this charge.
- The notary confirming the apartment’s SPA will ask for up to one per cent of the property’s worth.
Regardless of when the Buyer makes the payment for the property for sale in Ukraine, ownership of the realty is transferred upon signing, notarizing, and registration of the SPA with the Register of Titles to Real Estate.
Any amount more than 50,000 UAH (around USD 2,000) must be sent via a bank in Ukraine. Most personal real estate transactions do indeed include cash.
Prepayment Requirements
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- Prepayment of five per cent of the purchase price is a common requirement from vendors.
- From one per cent to six per cent of the purchase price of the real estate is the real estate agent charge.
- The purchase price plus a little more for the notarization (certification) of contracts and agreements and the issuance of extracts from different registries totals 1%. Depending on a notary, this extra fee might be substantially different.
Factors To Know Before Investing In Ukraine’s Real Estate
High Real Estate Investments
The Ukrainian people have little faith in financial institutions. Ukrainians often turn their wages into hard money (often US dollars), preserve this cash, and purchase real estate whenever possible. Ukrainians tend to spend a large portion of their windfalls on real estate like Ukrainian houses, which helps to drive up and sustain the value of this asset type. Real estate has effectively ensnared a large portion of Ukraine’s capital.
Mortgages are Hard to Get
Ukrainian mortgage rates exceed 20% yearly. Due to rising inflation and low bank trust, Ukrainian banks must offer high deposit rates to attract consumers. Deposit rates raise banks’ financing costs, which raises mortgage rates. Lack of long-term cash on deposit causes liquidity concerns, which may be relieved by higher mortgage rates. Ukrainian deposits average three to six months, but most mortgages last 15 to 20 years.
While the hryvnia stayed essentially constant in 2017, it fell sharply between 2014 and 2015, contributing to high mortgage rates related to currency risk. Even if the hryvnia and inflation stabilize and depositors return to their banks, Ukraine must solve many economic difficulties before mortgages may be used for home financing. In early 2017, about 66% of Kyiv purchasers paid cash, 33% used developer delayed financing, and 34–34% used credit financing.
Real Estate Brokers Are Unlicensed
Real estate agents must pass many tests to get a state license in established markets. Ethics codes restrict their conduct, and ethical infractions may result in heavy penalties or license revocation. None of these rules exist when buying property in Ukraine, so choose a broker or real estate firm carefully.
Ukraine has no MLS
Unlike in other countries, Ukraine does not have a Multiple Listing Service (MLS) that real estate agents may use to exchange property for sale in Ukraine details with other agents who might assist them in finding a buyer or brokers who represent sellers in exclusive listing contracts. Brokers use their access to proprietary MLS databases to set commission offers and provide appraisals with Ukrainian house details. The information found in MLS is often more comprehensive than on real estate websites.
Legal Issues for Foreign Buyers
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While this essay does not pretend to provide professional legal or tax advice or address your unique situation, there are a few things that foreign nationals thinking about purchasing property for sale in Ukraine or Kyiv should bear in mind from a legal standpoint. Ukraine recognizes you as a foreign national with the legal right to buy and hold real estate. But in Ukraine, the rights to own land and structures are distinct; if you are a foreign national or a business company, you may buy the land rights to a building you already own or inherited.
It is wise to get a Power of Attorney, which permits others to perform legal procedures in your absence, drafted by your lawyer if you want to purchase in Kyiv remotely or if you will not be spending more than a few days in the city at any one time. Be advised to contact a Ukrainian lawyer before your trip so that you can legally legalize a foreign power of attorney locally upon arrival in Kyiv, as it can be a hassle to have the document “legalized” with an Apostille and certified translation into Ukrainian. This is necessary if you intend to use a power of attorney not drafted in Ukraine.
To lawfully purchase property for sale in Ukraine, one may do one of four things:
- Forming a limited liability company (“LLC”) in Ukraine with charter capital equal to the target property’s value and then buying it;
- Forming an LLC with a minimum charter capital and then lending money to it from abroad to buy the property (these loans must be registered with the National Bank of Ukraine);
- A buyer who is not a Ukrainian resident transfers the full purchase price of a property from their foreign bank account to the seller’s Ukrainian bank account;
- Alternatively, a buyer from abroad can deposit enough money to buy the Ukrainian house into an investment account in Ukraine and then transfer the balance to the seller’s bank account in Ukraine. When purchasing property for sale in Ukraine, it is possible to use the buyer’s and seller’s foreign bank accounts as settlements. This works when the seller is not a Ukrainian resident or has bank accounts created lawfully overseas. There are benefits and drawbacks to each of these approaches.
The proportion of foreign currency gains received from outside subject to required conversion into Ukrainian hryvnia was decreased to 50% on April 5, 2017, so keep that in mind. However, it’s worth noting that when buying property in Ukraine, currency restrictions are still retained. Skeptical investors contemplating investing in Ukraine’s real estate market would be reassured by the country’s progress towards establishing escrow accounts, which would substantially lessen counterparty risk.
Looking for property for sale in Ukraine? PayMeHere can be your go-to assistance in making the right choice. From hundreds of listings, you can easily shortlist or choose the kind of land you want to buy in Ukraine while living anywhere in the world. So, why get expensive lawyers or other methods when we are here to make it easy for you?
Let PayMeHere be with you on this journey.