What do foreigners need to purchase residential real estate in Ukraine
Foreigners have the right to purchase any real estate in Ukraine. However, the real estate market, the acquisition process and the subsequent transfer of ownership have certain peculiarities.
First of all, two residential real estate markets should be distinguished:
- The primary market, that is, apartments and houses in new buildings. This market includes direct offers from developers and investors, as well as investments in real estate under construction. In this case, the developer is the main service provider and seller, and brokers and intermediaries are rare.
- The secondary market is real estate sold by former owners. In practice, brokers and intermediaries almost always participate in the secondary market on the seller's side:
- apartments
- houses with plots of land below them.
Buying an apartment (property rights to a future apartment) on the primary market
In order to purchase housing from a developer in Ukraine:
● You must have an identification code. This is an important document, because without it it is impossible to buy real estate, open a bank account and register a business. Foreigners arriving must also obtain a corresponding document in accordance with the legislation of Ukraine. Find out how to issue an identification code for a foreigner using the link.
● open an investment account in a Ukrainian bank (optional);
● Determine the reliability of the agreement by requesting the draft agreement and technical documentation from the developer;
● Check the documents and reputation of the developer (this can be dne by consulting a legal company or using special automated services);
● After solving all issues, you need to conclude a contract and make payment.
It is possible to purchase a future apartment by concluding a contract of assignment of rights of claim (ie, the contract with the developer is concluded by another person who wants to sell an apartment that has not yet been built)
Buying an apartment on the secondary market
A contract for the sale of an apartment/house with a plot of land is drawn up by a notary public.
A foreigner who purchases such real estate will need to present:
● Passport, other identity card with a translation into Ukrainian
● Identification code.
● Marriage certificate, if you have a spouse
● Notarized written consent of the husband/wife (this is a feature of Ukrainian legislation regarding the regime of joint property of spouses)
The seller, in turn, must provide additional documentation from his side, namely:
● Copies of passports and identity cards.
● Identification code.
● Certificate of ownership of real estate/ Sales contract based on which he purchased the real estate (preferably)
● Extract from the register of property rights to immovable property for real estate for sale
● Technical passport of the real estate (areas, address, names must match the Extract)
● Property valuation report
● Certificate of family composition of the person selling real estate
If the subject of the agreement is a house with a plot of land, the following is additionally submitted:
● Documents for the land plot, including an extract from the register of property rights to real estate in relation to the land plot
● Extract from the cadastre
The contract of sale of real estate is concluded in the presence of a notary public, and is also registered in the state register. During registration, the notary checks whether all necessary fees and obligations have been paid, whether the parties have the legal right to carry out the transaction, and whether there are no mortgages or third-party rights to the property.
Payment is usually made directly at the conclusion of the contract, unless otherwise stipulated.
The importation of cash in the amount of more than 10,000 euros into Ukraine is subject to mandatory declaration at the customs authorities. If you pay in cash at the bank, you must submit this declaration there. Payment by SWIFT transfer is possible.
The foreign buyer must keep the originals of the following documents:
- purchase agreement;
- technical passport;
- extract from the register of property rights to immovable property.
Subsequently, it is necessary to register and redraw contracts for the payment of utility services.
Taxes on real estate transactions
Definition of tax residency
The tax rate depends on the tax status of a foreigner: resident or non-resident of Ukraine (there are many nuances in this matter, so it is worth getting professional advice from a lawyer).
Taxation when selling residential real estate
If the property has been owned for less than three years and the seller is a foreigner (if the foreigner is a resident of Ukraine), then the pension tax, state duty and military tax remain unchanged (1%, 1% and 1.5%, respectively), but the personal income tax will no longer be 5%, but 18%.
If the foreign seller is a non-resident, then it is necessary to analyze the relevant double taxation avoidance agreements.
Taxation when renting
As a rule, the purpose of the purchase of residential real estate by foreigners in Ukraine is to rent or own residence.
The tax on income from renting a house is usually 18% of the actual income and the military levy is 1.5% of the cost of rental services, however, Ukraine has a simplified taxation system (in particular, the 3rd group) and then the rate of return on rental services is 5% of the Unified tax (note the personal income tax) and 1% of the military levy (from January 1, 2025)
If the foreign lessor is a non-resident, it is necessary to analyze the relevant agreements on the avoidance of double taxation.
Tax on "extra" square meters (or "luxury" tax)
Taxation is determined by the total area of the apartment or building (Article 266 of the Civil Code) . Apartments up to 60 square meters, houses up to 120 square meters are not taxed. For real estate, the area of which exceeds this limit, the tax is inserted by local authorities, and is currently 1.5 percent of the minimum wage for apartments and houses ( current rates for 2025 ).
If the property has real estate with a total area of more than 300 square meters (for an apartment) and/or 500 square meters (for a house), then another 25,000 UAH per year is added to the amount for each such object of residential real estate.
With the help of an online calculator, the owner can independently calculate how much he will have to pay for his real estate.
Useful document templates
https://instaco.com.ua/create-document/poperedniy-dogovir-kupivli-prodazhu-kvartiri-ukr-ukrayina
https://instaco.com.ua/create-document/dogovir-kupivli-prodazhu-zhitlovogo-budinku-ukr-ukrayina
https://instaco.com.ua/create-document/dogovir-kupivli-prodazhu-zemelnoyi-dilyanki-ukr-ukrayina
https://instaco.com.ua/create-document/dogovir-kupivli-prodazhu-kvartiri-ukr-ukrayina
Date of publication: 22.02.2025