Legal Aspects of Real Estate Transactions in Uzbekistan

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

The following documents are required for the transfer of immovable property (purchase and sale, donation, pledge):

1. contract which must be registered in accordance with the established procedure;
2. transfer acceptance deed;
3. extract from the Register on state registration of immovable property;
4. documents of title to the property;
5. certificate of absence of debts and encumbrances.

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

According to the Law of the Republic of Uzbekistan No. ЗРУ-803 ‘On State Registration of Rights to Immovable Property’ dated 28 November 2022 (hereinafter - the ‘Law on State Registration’), the Cadastre Agency under the State Tax Committee is a specially authorised body to implement the policy of state registration of rights to immovable property. The registering body of rights to immovable property is the State Cadastre Chamber of the Cadastre Agency under the State Tax Committee of the Republic of Uzbekistan.

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

According to the Tax Code of the Republic of Uzbekistan, the seller pays 12% personal income tax. 

Income from the sale of property is defined as the excess of the amount of sale of the property over its acquisition cost confirmed by documents. In the absence of documentary confirmation of this value, the positive difference between the sale price and the cadastral value is recognised as income.

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

Article 17 of the Land Code of the Republic of Uzbekistan states that foreign citizens and stateless persons may own land plots only on a leasehold basis.

In addition, citizens of foreign countries, the list of which is approved by the Cabinet of Ministers, are granted the right, without requiring a residence permit in Uzbekistan, to make investments in the form of the purchase of immovable property.

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

In transactions with immovable property, the seller is contractually liable and undertakes to:

1. transfer the ownership of property to the buyer;
2. ensure state registration of the transfer of title to the property;
3. define in the contract what exactly is transferred to the buyer, including data on the location of the property on the land plot; 
4. be liable for the transfer of property of inadequate quality or not complying with the terms of the contract.

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

Encumbrances on a land plot are included in its legal status, are subject to state registration and are retained upon transfer of the land plot to another person. In case of transfer of title to the encumbered immovable property, the pledge or other encumbrances remain in force for the new owner.

If the owner violates the terms of the pledge or encumbrance, the pledgee has the right to apply to the court to force the sale of the property.

The court may restrict the right to dispose of the object up to seizure of the property.

Authors: Kozimjanova Sitora, Karimov Bakhodir