Kiev Property Purchase FAQ GuideGuide to Real Estate purchase in Kiev, Ukraine
We often get approached with clients interested in learning the basic process framework for property purchase in Ukraine. The process is fairly simple, but can seem
complex to foreigners that do not speak the language.
In recent years, the purchase and sale process have gotten more transparent - as the old days of Soviet times which had no concept of private ownership wear off.
Since the collapse of USSR, Ukraine has had one of the most robust real estate markets in the world. Using just one example, at the market’s peak in 2007,
there were over 20,000 real estate transactions per month in Kiev. Today Ukraine’s real estate market offers many wonderful opportunities and high returns on investments.
To find out more, please consult our real estate broker specialists.
Below is a brief FAQ regarding purchase process in Ukraine. Of course, all questions can not be answered in a FAQ so if you are interested in finding out more or require a
consultation service please do not hesitate to contact us via email or by phone and we will be happy to assist you.
Our consultation fee is only $50 per hour.
Can foreigner purchase apartments in Ukraine?
Ukraine law does not distinguish between property rights or right of ownership in regards to non Ukrainian citizens versus Ukrainian citizens.
Foreigners purchase real estate using the same process. However, non Ukrainian citizens are at the moment not allowed to purchase land.
What are the typical steps of the purchase process?
After the acquisition property has been identified and price has been agreed upon, it is necessary to sign a preliminary purchase agreement.
As a standard a deposit is involved which is typically 5% of the purchase price or the agreed upon amount.
The preliminary agreement outlines the terms of the purchase and time frame during which the purchase will take place. It is signed in the presence of a notary.
On the date of the actual deal, the remaining balance is paid also in the presence of a notary.
At this point, the title of the property is officially signed over to the new owner and is registered within the state structure.
What documents are required for a foreigner to purchase property?
Passport with valid visa stamp. If no visa was required, simply a stamp page that shows legal entry into the country.
Ukrainian taxpayer identification code. You can easily obtain this with our guidance – all that is required is your passport.
We can also obtain this for you if we have power of attorney created on your behalf.
Can a foreign corporation purchase real estate in Ukraine?
Both foreign individuals and foreign corporation can purchase real estate in Ukraine. However, the process is considerably more complex if a foreign corporation
is making the purchase and more documents are required than for a purchase done for an individual. It can also be somewhat complex to register a corporation with
city utility services, however, with our assistance we can help you navigate through this bureaucratic maze.
What are typical expenses associated with a purchase?
Everything can be negotiated, but as a standard the buyer in Ukraine covers all closing expenses, including notary fees, state registration fees, property purchase taxes and bank expenses.
If you use a real estate agent to locate the property you are purchasing, you will be also paying a brokerage fee which is negotiable but typically 3% to 5% of the property price.
Notary fees vary from 0.25% of the purchase price up to 1%.
Property purchase taxes are usually 2% with 1% going to Ukrainian Pension Fund and 1% as a State Tax. Various state registrations usually are around $500 USD in total.
How are property rights in Ukraine registered?
Registration of the sale purchase agreement is stored with main department of federal registration service in Kiev and is kept on file both in paper and electronically in the state registrar.
There are official public notary offices around the city which have the authority to access the state registrar.
How do I find a property to buy in Kiev?
Naturally, there are many real estate agencies in Kiev which deal exclusively with apartment sales. There are also dozens of newspaper and online publications which often contain both owner direct listings and realtor listings.
Majority of real estate listings listed are realtor protected as typically sellers want someone on their side working for them, marketing the property.
There are also various industry specific databases, similar to multiple listing services which are proprietary to realtors. At UA Realty Group, we subscribe literally
to every single database and publication to give us the widest variety of options for sale for our clients.
Trying to find a property yourself by calling phone numbers in newspapers is often a losing strategy as many local agents waste client’s time by not showing them the type of properties they seek.
Often, the agents are not professionals and do not have a clear grasp on what Western clients are looking for.
We at URG understand exactly what type of property our clients are searching after having a brief conversation and understanding all of our client’s needs.
We will present you with the most complete and current information on all properties available on the market, including ones which are exclusively sold through us.
We highly recommend using a real estate broker with vast experience in the field to truly represent your interests during your real estate transaction.
Many sellers have a realtor working for them. Do I need a real estate agent on my side?
Locating the right property for your purchase is only part of the process. After the property has been identified, smart negotiations with the seller or their representative should begin.
Further, your lawyer or agent should verify that the property truly belongs to the seller, has no document issues or other potential legal pitfalls to minimize your risks.
At URG, we will do all the due diligence on the target property; negotiate the sale price and terms and conditions for the purchase. We will also fully investigate the property history,
its documents in the archive and any other related issues.
We can also help with city registration services, such as electric companies, telephone utilities, etc.
It is absolutely critical to have professional and competent agent on your side to make sure that the purchase process is smooth and legit.
I found a property myself to buy, can you assist me with checking its legal history and finalizing the transaction?
Even if you find a property on your own, we will gladly provide you with full legal assistance on your purchase. The assistance includes performing title search,
checking seller’s background and verifying the legality of the documents. We also check if the property has an outstanding arrest on it and if any money is owed to any bank on the property.
We charge a flat fee either pre-agreed or on a per hour basis. Every property purchase is different so please contact us to get a quote if you have a specific property already identified.
What types of maintenance fees are involved?
Typically there are no maintenance fees of any sort involved on older type of buildings. Those who have been to Ukraine are familiar with the often bad shape of common areas in buildings.
This is a result of course of having no maintenance fees. In older buildings, tenants will usually mutually agree to pay small monthly contribution for general cleanup of the entrance of the building.
These fees are usually insignificant, often $10 or less per month.
Some buildings, with wealthier type of residents will in fact have a larger maintenance fee involved but usually no more than $30-$40 per month.
With building entrances which have not been renovated, often the tenants are asked to contribute to a renovation fund, although many tenants often refuse (often senior citizens which do not have the ability to contribute).
In such cases, often wealthier types of client can pickup the share of unpaid contributions to simply bring the entrance into presentable shape.
In newer, modern type of buildings built recently there are standard maintenance fees which cover elevator maintenance, hallway cleanings, etc.
The monthly fees vary based on the size of the apartment, however, they tend to be much lower than those in the West.
Many new buildings charge about $1-$2 per square meter in maintenance fee per month and include doorman services.
Why do I need to check property history?
Ukrainian properties may often have what’s called an arrest placed on them for variety of reasons. The reasons vary from outstanding debt owed to a bank to ownership issues with previous owners or unsettled utility expenses.
It is absolutely critical to check that the property does not have any of the above or other issues as it can make a sale of the property difficult and costly in the long run.
Who pays the brokerage fee?
As a standard the brokerage fee is paid by the buyer. However, in today’s market everything is negotiable and in many cases the brokerage fee can be paid by whichever party receives the realty service.
So in other words, if the seller puts up a property and the realtor finds the buyer, in most such cases the seller will pay the brokerage fee. The percentages of fees vary from 2% to 6% typically, with standard being around 4%-5%.
As a standard the buyer pays for all other related costs such as notary fees, but again there are cases when the seller does this when the realtor provides them with related services.
If you use URG as your representative, we will do our absolutely best to protect your interests during the pre sale negotiations and make sure that your transaction goes smoothly with no potential issues relating to legal liens, or other unforeseen problems.
Is the listing price negotiable?
In today’s market the listing price is often a fantasy on behalf of the seller. Because Ukraine’s real estate history is short, many sellers still cling onto the peak days of the peak market. They are, however, slowly realizing that price has to be reduced drastically
if they wish to realistically sell their property. Thus, the listing price is always negotiable and in the early part of 2009 an analysis showed that the property sales were done on average with a 20% discount from the listing price.
Every case is different and all markets are different but the point is that the asking price is typically negotiable.
How is the deposit and balance actually paid to the seller?
It may surprise many Westerners that real estate transactions are often completed in cash as to a large extend it still is a cash economy in Ukraine.
Thus, the most common way of payment for a non Ukrainian purchaser is a wire transfer to themselves (from wherever their funds are being held). On the day of the closing,
the parties meet at the bank (there are designated rooms for transactions) and verify that the bills are not counterfeit.
Then a signing takes place at a state authorized notary office and signed agreement is submitted for state registration at which point the actual transfer of the ownership takes place.
The seller at that point collects the funds which are stored at the bank and have been verified to be legal. It is also becoming more common to do payments via wire transfers and procedures for these transactions vary.
While the cash purchase procedure seems strange by Western standards, Ukraine Realty Group professionals will help you each and every step of the way so the process goes by as smoothly as possible and your interests are completely protected.
What is the usual deposit amount in Kiev?
Deposits vary based on agreement made with the seller. Typically the deposit is 5% of the purchase price but can be negotiated up or down.
What is the procedure of the closure?
Once the seller has verified that the funds are legit and exist at the designated bank, an agreement is signed at a state authorized notary office at which point it is submitted for state registration, upon which the actual transfer of the ownership rights takes place.
It is also logged into a state registrar computer system and a hard copy ownership document is created.
Is there any additional paperwork required after the property has been purchased?
There are various registrations that are required with city utility companies ZHEK. Zhek is responsible for utility services and building maintenance and the new owner must be registered with this authority.
The registration in ZHEK is a simple procedure and we can help easily with this registration.