Land property purchase in the Ukraine
Nowadays, land property is one of the most profitable objects of investment in Ukraine. Both Ukrainian and foreign investors show their interest in this sphere.
The key point of investing in parcels lies in potential income estimation. In past 2-3 years, purchase of a parcel just to resale it lose popularity, because the time when prices grew wild has passed. So you have to consider buying a parcel as a first phase of an investment project and build some kind of realty there (like production assets, residential or commercial properties).
Title to land and other aspects of purchase of land in Ukraine are regulated by Land Code of Ukraine. State, legal persons, joint ventures, international organizations, Ukrainian citizen or people without citizenship are subjects of ownership rights. In this article we will review the process and features of land purchase for individuals, who aren’t citizens of Ukraine.
According to the Land Code of Ukraine, citizens and people without citizenship are able to purchase land ownership not for agricultural purposes in the inhabited locality. But, outside of locality they can only buy land under real estate objects, which belong to them.
So, if you don’t possess Ukrainian citizenship you can buy a parcel not for agricultural purposes. The purpose of a parcel (industrial, residential or commercial buildings, for example) is stated in land registry. In the moment of purchase you will know the purpose of a parcel, so you avoid a risk of buying the “wrong” one. If you want to buy a land for agricultural purposes, you can just establish the legal entity on the territory of Ukraine and purchase a parcel for this legal entity. It is a bit harder than a straight purchase, but it is the best way, that really works and it is widely used by foreigners.
To buy a real estate in Ukraine, a foreigner needs to prepare some documents: passport and document that confirms legal residence in Ukraine (visa). Also you will have to show your personal tax reference number to execute an agreement of sale and purchase. If a foreigner doesn’t have this number he will have to obtain it before executing an agreement. Otherwise, notary officer wouldn’t be able to notarize the agreement and a contract will not jell. If you want to obtain a personal tax reference number, but you don’t want to come in Ukraine, you can enquire with Ukrainian lawyers. They will help you to obtain it by your attorney.
List of essential documents to buy a land is similar with a list of real estate purchase and consists of:
1) Passports of all property purchasers and their mates (if married). It is necessary to have visa in passport and a timestamp with a date of arrival in Ukraine (put by Border Service);
2) Notarized passport translation;
3) Tax reference numbers of all purchasers and their mates (if married) or their children if they will be purchasers as well;
4) Marriage license (if married)
5) Divorce certificate or certificate of death (if a purchaser was married at time of a transaction settlement)
6) Notarized agreement of a mate to purchase property (needed if a mate is absent at the time of a transaction settlement);
7) Certificate of birth (if children are going obtain a property ownership)
If the documents №4, 5, 6, 7 are given by another country they should have legalization mark (apostil or consular certification) and it is necessary to have notarized translation of all these documents.
Property transaction can also be made by an authorized delegate. In this case, your delegate should have notarized letter of attorney (with legalization mark if given by foreign country) that shows a warrant and rights to sign the agreement.
We recommend you to pay a lot of attention to the agreement of sale and purchase. Don’t use the stock agreements from the Web. Firstly, Ukrainian laws often change and even if you use professional high quality agreement, written half a year ago, it can become outdated today. Secondly, language barrier can cause incomprehension by a foreigner, even in casual aspects, and it can cause some problems in future. Please, note that we don’t talk about malicious intents on the part of a seller, which happen sometimes.
It wouldn’t be superfluous to check seller’s loyalty and history as well as parcel’s. For example, you can check presence of some judicial disputes or burdens towards the parcel. Land purchase is often an expensive deal and it will be wise to spend money to be sure you make a fair deal.
Ukrainian law companies provide a wide range of services that can help you to buy a property in Ukraine. These services include consultations and advices in different law questions and help with papers – receiving a personal tax reference number in Ukrainian tax service, and help with documents preparation, formation of an agreement of sale and purchase, document notarization etc. Effective cooperation with Ukrainian lawyers will help you to obtain a real and liquid land in Ukraine.
Author: Kydalov Igor
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Yes, I agree with author that land property is one of the most profitable objects of investment. But what about taxes? Are they small? Or people will give a big part of their money to our country?