Legal Aspects of Real Estate Transactions in Kazakhstan

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

In accordance with the Law “On State Registration of Rights to Immovable Property”, all transactions require title documents for the property, such as a sale and purchase agreement or a certificate of inheritance, as well as an identification document for land plots, such as an act of private ownership or an act of land use rights. Additionally, a technical passport for the property is required. These documents are subject to state registration.

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

In the Republic of Kazakhstan, transactions involving real estate, specifically the registration of rights and encumbrances, are carried out by the registration authority — the non-commercial joint-stock company “Government for Citizens” at the location of the property. Additionally, in case of disputes or the need for the enforcement of transactions, the courts are responsible for protecting the rights of the parties.

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

Tax obligations when purchasing and selling real estate in Kazakhstan arise in the following cases. According to Article 331 of the Tax Code, the obligation to pay individual income tax on the income from the gain on the sale of property arises if the residential property has been owned for less than one year from the date of registration of ownership to the date of sale. This tax is calculated based on the increase in the value of the property.

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

There are certain differences to consider when conducting real estate transactions with foreigners. According to Article 9 of the Law of the Republic of Kazakhstan “On the Legal Status of Foreigners”, foreigners permanently residing in Kazakhstan have the same rights in housing relations as citizens, including the right to own residential property. However, temporarily residing foreigners are not allowed to own housing. Additionally, under Article 23 of the Land Code, foreigners may own land plots in Kazakhstan only for construction purposes or with existing buildings and structures, as well as land plots serving these facilities.

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

The seller's obligations in a real estate transaction include complying with general provisions of the sale and purchase agreement, such as maintaining the property in proper condition and transferring it as per the contract. The seller must ensure that the property is free from third-party rights unless the buyer agrees to accept it encumbered. Additionally, the seller must have the necessary documentation. If required, the seller must pay taxes, such as individual income tax on the income from the gain on the sale.

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

Property liens and encumbrances on real estate, to varying degrees, limit the ability to use, dispose of, own, and conduct transactions involving the property. In the case of a lien, under Articles 315, 319, and 323 of the Civil Code, the lienholder has the right to use the encumbered property in accordance with its intended purpose, including deriving income from it. Liens remain in force upon the transfer of ownership, and the new owner assumes the obligations of the previous owner. Encumbered property may be sold through public auction in accordance with procedural legislation.

Author: Mila Ryzhkina