Legal Aspects of Real Estate Transactions in Armenia

1) What legal documents are required for a real estate transaction?

For a real estate transaction, the parties involved are required to provide documents verifying their identity. For citizens of the Republic of Armenia (RA), such documents include a passport, an ID card, a birth certificate for individuals under 16 years of age, and other documents specified by Government Decree. For foreign citizens, acceptable documents include a passport or internationally recognized travel document, a residence card, or the internal passport used to enter the territory of the RA.

2) Which official institutions are authorized to make real estate transactions?

Real estate transactions must be authorized by a Notary or the Cadastre Committee and registered with the Cadastre Committee.

3) What are the tax implications of buying and selling real estate?

Income from the sale of real estate is taxed as follows:

In the case of an individual-income tax, which in the case of alienation of property is 10%.

In the case of a legal entity-profit tax, which is 18% and is calculated on the annual profit.

Income tax is calculated at a rate of 20 percent on income received by the developer from the alienation of a building, its apartments, or other premises.

4) Are there any differences to consider if the purchaser of the real estate is a foreigner?

There is no distinction between foreign nationals and citizens in these transactions, except that foreigners are not permitted to purchase land unless they possess a residence card in the Republic of Armenia. 

If the buyer is a resident of another country, it is possible that a tax liability may arise in terms of non-resident income tax. Here it is important to consider the country of residence of the buyer and whether the Republic of Armenia has a double taxation agreement with that country.

If a double taxation agreement exists, it is necessary to study its regulations in the case of the specified transaction.

5) What are the responsibilities of the seller in a real estate transaction?

The Seller must transfer to the Purchaser the appurtenances of the property, all related documents, and real estate free from third-party rights, unless the Purchaser has been informed of such rights and has expressly agreed to them.

6) What are the implications of property liens and encumbrances?

The lien on real estate must be registered with the appropriate state authority to be valid. The right of pledge remains in effect even if the pledged property is alienated, whether with or without compensation, or if the ownership rights of the pledgor are transferred to another person through universal legal succession.

Authors: Syuzi Harutyunyan, Hasmik Martirosyan