How To Invest In Ukrainian Real Estate While Sitting At Home Or On The Beach
If there is a bright side to all that has happened in 2020, it might be the fact that we now can see clearly what work can be done remotely. Many companies are now allowing many employees to work from home, with new vacancies often having the option for remote work, and property investment is not an exception to this trend. It is possible to safely invest in Ukrainian real estate without being present in the country.
Two things that you will need to buy property in Ukraine remotely:
- A trusted person with a power-of-attorney (POA) giving them the right to purchase property in your name (this can be a friend, family member, lawyer, or anyone else you trust)
- a Ukrainian tax ID number.
To get these, you will need to do the following:
- Get a proper POA notarized and apostilled in your home country.
- Send the original POA to the trusted representative in Ukraine.
- Once your representative receives the originals, they will be able to obtain the Ukrainian tax ID for you and then you will be ready to buy.
Remember that Ukraine’s real estate market is still developing, and Ukrainian real estate agents are mostly not licensed, so there is little to no oversight and no legal liability on them if a deal goes wrong. It is strongly advised that you properly vet your selected representative before giving them a POA. And if you do give someone a POA, it is best to ensure that there is no right to sell any property that you do purchase.
If you are still not sure what a good real estate agent can do for you, then read our article
In addition to a trusted representative, you will need someone to assist you in the whole process, and that’s where we come in. Using our broad knowledge of the real estate sphere, including legal support, assistance with the buying process and verification, managing the whole renovation process to maximize your profit, finding an ideal long-term expat client, and managing the property once it is occupied, our experienced team can help you maximize your rental yield.
Note that Ukraine has a currency control and strict bank rules, but in spite of this most deals are still actually closed illegally using physical cash payments in USD. With our experience working with foreign clients we have smoothed out the process so that our clients can pay legally by bank transfer while also remaining competitive given how other buyers do not always play by the rules. This is especially important if you plan to rent out the apartment in the future in order to ensure that you can smoothly receive profit from the rent while paying your taxes in Ukraine.
We have many years of experience working with foreigners and challenging different real estate cases to claim that investing in Ukraine property is justified.
1.What taxes do I have to pay while buying the apartment in Ukraine?
There are no special taxes applied to foreigners in Ukraine when purchasing an apartment. A 1% contribution to the state pension fund is applied upon buying a property in Ukraine.
If you were to sell your property before 3 years, a Ukrainian resident pays an “anti-speculation” tax of 5%, +1.5% wartime tax, and 1% state tax, whereas a nonresident would pay 18% + 1.5% + 1%.
NOTE that this is not legal advice, and you should consult a lawyer and/or tax consultant if you have any questions.
2. How can I secure my payments?
If you have a Ukrainian tax ID you can open a USD or EUR bank account in a local bank. Also, Vestor.Estate provides the exclusive service of escrow in real estate, and if you are unable or unwilling to open the local account for the foreign currency we can handle this on your behalf for an extra fee.
3. How to choose the district where I want to buy a property?
It depends on your budget, expected revenue, and targeted client. But still, there are some tips that you can notice while investing in property.