Purchase a Property in Russia (2024)

Investors who want topurchase a property in Russiaare advised to seek specialized help. Moscow and St. Petersburg are two of Russia’s most developed cities. However, other cities also offer business opportunities in Russia and the real estate market is always evolving. Our lawyers in Russia can explain the steps for buying a property in this country. We can also help with the preparation of the sale-purchase agreement for real estate transactions in Russia.

Real estate purchase regulations in Russia

According to Russian law, foreigners are usually allowed to purchase or rent property in Russia, but certain exceptions apply. Also, in order to be allowed to buy a property, the foreign citizen must hold a valid Russian resident permit.

TheRussian Land Codestipulates that foreign people or foreign legal entities cannot own properties built on borderline zones. Foreigners also have restrictions regarding the purchase of agricultural land in Russia.

When searching for aproperty in Russia, foreigners are advised to seek the help of a specialized real estate agency. This minimizes the risks and protects the buyer from fraud. Ourattorneys in Russiacan recommend real estate agencies in Russia and inform you during the purchase procedure, to make sure that everything is done according to law. Here is an infographic with information in this topic:

Due diligence when buying a property in Russia

The due diligence procedures are recommended in the case of residential real estate properties, however, they become mandatory in the case of commercial purchases.

This step is usually completed before the acquisition of the property as it implies a thorough verification of the property to be purchased. Also, it is the future owner’s responsibility to ask for real estate due diligence procedures before buying a property. This can be completed by a law firm in Russia when it comes to the legal side of the transaction and by an architect or any other team of construction experts when it comes to the technical side of the transaction.

Here is a video presenation with details about buying a property in Russia as a foreigner:

Buying residential real estate in Russia

There are no restrictions related to buying a residential property in Russia. Moreover, there are several laws which provide for the sale and purchase of real estate property for residential purposes in Russia. These laws are:

• the Housing Code which is the most important law when it comes to defining residential real estate;
• the Civil Code which provides for the right to acquire real estate in this country;
• the Contract Law which provides for the information which must be contained in a real estate sale-purchase contract;
• the Federal Law on the Registration of Titles and Real Estate Contracts which provides for the registration of properties with the Land Registrar.

As mentioned earlier, any Russian or foreign citizen can buy real estate for residential use. The exception for foreign citizens resides in purchases on border and seaport areas. However, an important aspect should be considered here: aforeign individual can buy a property built on such land plots but is restricted from buying the land the property is built on.

Our Russian lawyers can offer detailed information on the conditions imposed fot those interested in buying a property in Russia as a foreigner.

Another important aspect which should be considered when deciding to buy a property in Russia is related to the categorization of the real estate. Fortunately, the Russian Housing Law is very strict about the categories of properties which have a positive effect on the price because the Act provides for every type of unit which can be purchased here.

Acquiring commercial real estate in Russia

Not only foreign citizens are allowed to buy properties in Russia, but foreign companies are also allowed to buy real estate for commercial use. There is a clear distinction between the two types of real estate purchases, however, the same restrictions apply when it comes to the areas in which such properties can be bought.

There are also cases in which commercial property purchases involve agricultural land, however, in this case, the foreign company will only be entitled to use the land plot for the commercial activities which include completing various types of agricultural works. The right to use such property is granted through concession agreements.

One of the easiest ways of acquiring commercial real estate property in Russia is through mergers and acquisitions, which are regulated by the law with the same name. This procedure implies a foreign company to take over a local business with all its assets, including the real estate ones. However, the foreign company must pay attention to the regulations imposed by the Civil Code.

An interesting aspect when buying real estate in Russia is that aircraft, vessels, and navigations boats are also considered real estate property when purchased by a company. If you are interested in immigration to Russia and want to buy a property, please contact us soon.

Elements of the real estate sale-purchase agreement

When buying real estate in Russia, the Contract Law must be respected. The following elements must be present in the sale-purchase agreement when buying Russian residential or commercial real estate:

• full information about the property, such as the complete address;
• the full price of the property;
• information about the seller and the buyer;
• terms related to the payment of the price;
• the procedure for transferring the property to the new owner;
• information about all the individuals who will reside in the property, in the case of residential real estate purchases.

Also, if any special mentions are agreed by the seller and the buyer, these must be stipulated in the contract.

The sale contract of commercial real estate property is slightly different from that a residential property because the former enters the merger and acquisition deals regulations. In this case, the contract must contain a few more elements, among which a description of the property with all the facilities on it, the warranties and the representations of the property.

Our Russian law firm can help you in buying a property in Russia as a foreigner by managing the formalities.

Steps for purchasing a property in Russia

After finding a property that meets their needs, buyers must meet the owner and draw up an initial agreement. This document describes all the provisions of the final sale purchase agreement and includes information about the necessary documents.

The buyer must make sure that he/she can provide the entire negotiated sale price for the property. After the payment has been made and confirmed, both parties must sign the final purchase agreement in front of a notary. An acceptance agreement must also be signed on the same date the property is transferred to the new owner. This document certifies that the property was transferred in an acceptable condition.

The new owner must register the property and the former owner must perform a de-register procedure. The following documents need to be provided for theregistration of property in Russia:

• an application signed by the parties,
• identification documents (passports for foreigners, translated into Russian),
• the sale contract,
• acceptance agreement,
• documents stating who will live on the property.

If you decide to buy a property in anoother former Soviet Union country, such as Georgia, you should know that there can be some differencies related to the imposed conditions. For example, in Georgia you don't need a residence permit in order to be allowed to buy a property, compared to Russia, where such a permit is mandatory. The property tax in Russia is 2% and in Georgia is only 1%. In both countries, you can sign a pre-sale contract and pay a certain amount before buying the property. More details about purchasing a property in Georgia can be offered by our partner lawyer.

Fees related to buying real estate in Russia

The following fees and taxes must be considered when purchasing a property in Russia:

• the real estate agent’s fee, if such service has been used;
• the documents notarization fee;
• the property registration fee;
• the value added tax.

Purchasing a property for a Russian residence permit

Foreigners can opt to buy a property in Russia and obtain a residence permit. This type of residence permit allows foreigners to live in Russia and even do business without restrictions. In the first phase, a temporary residence permit is issued in Russia, when purchasing a property. Here are other important aspects:

• In order to apply for a permanent residence permit, applicants must hold a temporary permit for at least 8 months in Russia.
• Applying for a residence permit through property purchase in Russia is a relatively simple process. However, the support of some attorneys in Russia is needed to deal with the legal aspects.
• The process of obtaining a Russian residence permit through property acquisition is simpler for citizens who speak Russian as native speakers.

Buying a property in Russia as a foreigner comes with various rights in this country, but there are also some restrictions. Here are some of them:

• The purchase of agricultural land is not allowed, as is the purchase of forests.
• It is forbidden to buy land at the borders of Russia or in reserved territory.
• Real estate that belongs to the Russian army or that is administrative territory cannot be purchased.

On the other hand, foreigners can easily purchase houses, villas, apartments, and commercial and residential properties, without any limit in this respect. We advise you to contact our immigration lawyers in Russia to learn more about how to buy a property in Russia and obtain residency.

Some aspects of property transactions in Russia for foreigners

The purchase of a property in Russia by a foreign citizen involves the same process and formalities as in the case of Russian citizens. After checking the documents and the history of the property from a legal point of view, the sale-purchase deed is drawn up, which is to be signed by the people involved in the process.

The local authorities reserve the right to make checks in the case of foreign citizens before the aforementioned contract is signed in front of the notary. In this case, we specify that the final price can be negotiated. Also, the buyer and seller can agree on the advanced payment that must be made before the final signatures. What you should consider before signing the contract of sale-purchase of a property in Russia, as a foreign citizen:

• The market is not without risks, which is why it is good to collaborate with a real estate lawyer in Russia and do all the legal checks. Certain properties may be in litigation, and legal issues must be resolved first.
• In the case of foreigners who want to buy land to build, there must be separately registered contracts.
• The price can be negotiated, but it is good to have the final amount written and signed by the person selling the property in question.
• It is recommended that you make and sign a document that certifies that both the owner and the buyer have agreed on the initial deposit. This can be established after the final negotiation and when a preliminary contract is drawn up.

Why purchase real estate in Russia?

Contrary to some beliefs, buying a property in Russia is not expensive. Thanks to the Housing Law which provides for a strict categorization of real estate units, a foreigner can choose the most appropriate type of property they want to buy. Also, real estate transactions are very safe if all the procedures which need to be completed before and after agreeing with the seller follow the right order.

Real estate facts in Russia

In addition to assistance in buying a property in Russia, foreign citizens can also benefit from the services offered by our immigration lawyers in Russia. They can take care of the formalities related to immigration to Russia.Pleasecontact our Russian law firmfor a detailed offer and then discuss in detail aboutpurchasing a property in Russia.