Legal Aspects of Real Estate Transactions in Belarus

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

The property owner or holder of another real right must register their rights in the Unified State Registry of Immovable Property, rights to it and transactions with it. These rights must not be restricted by other transactions or legal requirements, including establishing the powers of public authorities to limit disposal (e.g., in case of tax arrears). Each party must have documents confirming their legal status, with translation into Belarusian or Russian language if they are issued abroad. Furthermore, the consent to the transaction is confirmed if it is required by law (e.g., the consent of the spouse in the sale of property that is joint property or the minutes of the general meeting of the shareholders if according to the Articles of a legal entity, the director needs to obtain the consent of the general meeting).

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

The transaction with the real estate is made by its parties and is concluded from the moment of its state registration in the authorized organizations for state registration, which are founded by the State Committee on Property of the Republic of Belarus. The creation, transfer and termination of rights, and restrictions (encumbrance) of rights are also subject to registration. The moment of creation, transfer and termination of rights is the moment of state registration.

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

When the buyer acquires property, he becomes the payer of the real estate tax, and if the real right is transferred together with the right to land - the land tax or land rent payer as well. In the case of subsequent sale of the property, tax on the income of foreign organizations or foreign individual income tax will be paid, depending on the status of the seller. The tax base will, in most cases, be a positive difference between the equivalent of the purchase and sale prices in US dollars at the rates set by the National Bank of Belarus on the relevant dates.

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

To acquire property a translation of the identification document into Belarusian or Russian languages is required. For the alienation of property before the conclusion of the contract, it will be necessary to obtain a certificate from the tax authorities confirming that the foreigner has no tax arrears in Belarus, including the payment of taxes on the planned transaction. Real estate transaction agreements, one of the parties to which is an individual, must be notarized or certified by the registrar of real estate before applying for their registration. Accordingly, if a foreigner is unable to speak Belarusian or Russian languages sufficiently to discuss the terms of the transaction, a translator's involvement in the process of notarization or certification is required.

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

The main obligation of the seller is to transfer the property after getting payment for it or at another moment, which is agreed by the parties, in a condition with components and accessories corresponding to the information of the Unified State Register of Real Estate and agreed by the parties, and to inform about encumbrances of real rights, including existing lease agreements. The seller must create opportunities for state registration of the transfer of rights to the buyer, usually, this is done by including in the text of the agreement a condition granting the buyer the right to apply for state registration of the agreement and the rights based on it. The other obligations are to be determined by the parties.

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

Some of the encumbrances are technical and limit the actions of the owner when using the property (for example, the location of a plot in a water protection zone). Other limitations may either completely block transactions with the property before their termination (for example, arrests of bailiffs), or make it possible only based on the consent of the person in whose favour the encumbrance was registered (for example, liens).

Author: Maxim Lashkevich