Legal Aspects of Real Estate Transactions in Ukraine

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

For a real estate transaction, the following documents are required: 

1. documents confirming the signatory's identity;
2. title documents for the real estate object;
3. documents confirming the rights of the seller/buyer to carry out the transaction;
4. documents confirming the absence of encumbrances;
5. technical passport for the real estate.

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

State registrars and notaries (private and public).

3) Каковы налоговые последствия при покупке и продаже недвижимости?

Tax implications for the seller

Personal income tax (PIT) at a rate of 18%;

Military tax at a rate of 1.5% of the income received.

Tax implications for the buyer

1% of the property value is the standard rate charged to the buyer for registration of real estate rights in the Unified State Register of Real Estate Rights.

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

Foreign citizens cannot purchase agricultural land plots.

If a foreign citizen does not have a TIN, he/she must obtain one from the Tax Service of Ukraine.

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

1. Provide the buyer with title documents;
2. Notify of any utility debts and pay them;
3. Conclude and notarize the purchase and sale agreement;
4. Transfer the property to the buyer within the agreed time frame;
5. Pay sales taxes (personal income tax and military tax);
6. Obtain spouse's consent to the sale, if the object is jointly acquired;
7. Hand over all documents related to the object, including keys and technical documentation.

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

Encumbrances (e.g., leases, easements) can impede the sale, use or transfer of real estate. An encumbered transaction requires the consent of the parties who have rights to the property.

A lien is imposed to secure obligations, and the lender can seize the property if the obligations are not met. The sale of a mortgaged property requires the consent of the mortgagee.

Author: Mykola Aleksiuk