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Russia: Purchase Process

Below is the standard purchase process in Russia and issues that may affect that purchase:

• There are no restrictions to foreigners buying residential property in most of Russia. Foreign investors have exactly the same rights as local Russians regarding real estate ownership.
• Since Russians tend to prefer new build properties a survey is not normally conducted as part of the purchase process. However, a survey can be arranged and is advisable for overseas investors buying older properties.
• Once you have agreed the purchase price and conditions of the sale, a preliminary contract is signed by all parties and notarised.
• Your solicitor will then undertake a search to check the property before drawing up the final contract and setting the completion date. As stated earlier, a thorough local search is essential for older properties.
• The final contract is signed by both the buyer and vendor before a public notary.
• Russian real estate purchases are often made in cash. If this is the case, you should arrange to have the cash stored in a bank safe deposit box and released to the vendor upon the presentation of completed, notarised paperwork.
• The signed and notarized paperwork is presented to the state for registration, which can take up to two weeks.
• Please note that Russian law makes a clear distinction between the right of use of real estate, and the right of ownership and disposal, so it is essential to ensure no one else has the right to use the property you intend to purchase.

Costs of a standard property purchase in Russia include the following:

• There is no stamp duty on Russian property.
• Fees to register the contract range from 0.01% to 1%.
• Non-residents are liable for 30% tax on the sale of a property. However, many sales are declared at the "state" value, bringing them under the tax threshold.
• The buyer will often be expected to pay the costs of the transaction, of around £250. These include registration of the contract, translations of non-Russian passports & marriage certificates.
• Agents are often employed to represent the buyer and seller separately. The price agreed for the property includes the selling agent's commission. Commission for buying through a search agent varies from 2% to 5% of the purchase price.

The Obelisk Advantage:

As Obelisk approaches its projects purely from an investment perspective, its priority is to deliver each real estate product with an emphasis on simplicity and transparency throughout the purchase process. Therefore, Obelisk has already identified the purchase procedure for its clients as a simple, four step process:

1. The client chooses and reserves the unit that best suits their investment requirements, and Obelisk takes the client through a compliance procedure.
2. An independent lawyer, sourced and appointed for the client by Obelisk, will have already carried out full due diligence on the real estate product. They will issue all purchase contracts and paperwork to the client.
3. On receipt of this contract, the client will sign and make the first payment. The lawyer will notify the client of all further payments when required.
4. The appointed lawyer will also represent the client in all aspects legally required within the country of purchase, ensuring that clients of Obelisk enjoy the benefits of simple and hassle-free real estate investment.

Read more about buying property in Russia