According to p.3 art.62 of The Constitution of the Russian Federation, foreign nationals and stateless persons shall enjoy in the Russian Federation the rights and bear the obligations of citizens of the Russian Federation, except for cases envisaged by the federal law or the international agreement of the Russian Federation.
So, in most cases the procedure for real estate acquisition is the same for both citizens and foreigners. But some details exist as well.
IDENTITY DOCUMENTS
First of all, to purchase real estate, a foreign citizen shall present identity document. That is a passport or some other document, set forth in a federal law or some other document acknowledged in accordance with an international agreement.
Foreign passport needs notarized translation. Some documents, set forth in international conventions with Russia, may also serve as identity documents without further legalization. For example, such convention was signed in January 22nd, 1993 by Commonwealth of Independent States. Other documents, issued in one state, need to be legalized in order to be acknowledged in Russia. Legalization is to take place at the territory of a country where the document was issued. It may be of two kinds: consulate legalization or apostille. The choice depends on situation. For example, apostille is used for sending documents to countries which are parties to Hague Convention of 5 October 1961 Abolishing the Requirement of Legalization for Foreign Public Documents.
POWER OF ATTORNEY
Foreign citizens may take part in real estate transactions via representative. It is better to issue a notarized power of attorney at the territory of Russian Federation in conformity with Russian legislation. However, the power of attorney may also be issued abroad. In this case it shall be legalized and notarized translation into Russian shall be made.
PERSONAL LAW REGULATIONS
Sometimes personal law of a foreign citizen is necessary.
Citizens of some countries, such as Turkey, Czech Republic, Bulgaria, Slovakia or Austria may face limitations imposed by these countries on investment into real estate.
The right of possession over property as ownership is also regulated by the personal law. Therefore, a person shall become adult according to the law of his country.
If a foreign citizen is married, the spouse’s consent may be required. The document where consent is expressed needs to be legalized, translated into Russian and duly certified.
LAND REGULATIONS
According to art.15 of The Land Code, foreign citizens cannot become owners of land plots in border areas and some other special territories, set forth by legislation. The land plots which are in federal or municipal property may only be sold to foreign citizens for the price, prescribed by legislation. Also foreign citizens may only lease agricultural land.
TAXATION
First of all, foreign citizens are to pay state duty that is common for all physical persons carrying out real estate transactions.
Foreign citizens obtaining income as a result of using property are to pay income tax. According to art. 224 of The Tax Code, income tax for real estate transactions makes up 30% for non-residents of Russian Federation. To decrease this tax to 13% and to have a right on various tax deductions, foreign citizen shall become resident, namely, actually reside at the territory of Russia not less than 183 calendar days during 12 months.
ONE MORE POINT
By purchasing real estate in Russia, foreign citizens only buy real estate – and no more. This transaction does not entail any visa privileges and advantages; it does not remove registration problems and does not simplify obtaining work permission.
Article by Ms. Arina Makarova.