Legal Aspects of Real Estate Transactions in Russia

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

The following documents may be required for a real estate transaction:

1. passports of the parties to the transaction; 
2. extract from the Unified State Register of Real Estate, including to check that there is no ban on conducting the transaction without personal presence, arrests and bans on registration of the transaction;
4. child's birth certificate and certificate on the balance of maternity capital - if maternity capital was used to purchase real estate;
5. marriage contract or spouse's consent to the sale, if the housing was purchased in marriage;
6. document of title, which confirms the transfer of ownership to the current owner of the property. This is a contract of sale, deed of gift, rent, certificate of right to inheritance, certificate of privatization;
7. technical plan: it contains the technical characteristics of the apartment and a detailed graphic plan. Technical plan of non-residential premises, apartment or building is needed for the initial entry of information in the USRN or for changing the register. It is also possible to find out about the presence of illegal redevelopment of the apartment;
8. certificates from psycho-neurological and narcological dispensaries;
certificate of absence of debts on utility payments;
9. registration certificate in Form 9 - contains information on persons registered in the residential premises, as well as those removed from the registration;
10. signed contracts and transfer acts. Acts, as a rule, are signed after full settlement and brought to the Rosreestr service to the main package of documents;
11. a receipt of payment of the state registration fee;
12. рower of Attorney - if there will be a trusted person at the transaction.

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

The Federal Service for State Registration, Cadastre and Cartography (Rosreestr) is a federal executive body which carries out the functions of state registration of rights to immovable property and transactions with it. 

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

Several taxes are payable on land transactions in Russia, including value added tax (VAT) on the sale of land plots if the seller is a VAT payer, as well as personal income tax (PIT) or corporate income tax depending on the status of the seller. In addition, the acquisition of a land plot may give rise to land tax, which is paid later on for the ownership of the land.

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

When buying and selling real estate by a foreign citizen in Russia, it should be taken into account that there may be restrictions on the purchase of agricultural land plots or land plots located in the border zone. Also, foreign citizens are required to obtain permission from authorized state bodies, and the process of registering rights to real estate may involve additional stages and documents.

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

The main obligation of the seller is to transfer the ownership of the real estate of proper quality to the buyer in accordance with the contract of sale.

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

The consequences depend on the type of encumbrance. For example, when property is seized, the owner is prohibited from making any disposition of the property; when real estate is pledged, the pledgee's consent to the transaction is required. In most cases, encumbrances and pledges are retained and follow the fate of the real estate.

Authors: Pavel Balyuk (St.Petersburg); Yuliya Zhadan (Rostov on Don); Aleksandra Levenkova (Samara); Makar Likh (Samara)