Nuts and Bolts - How to obtain property in Crimea, Ukraine

How we can help you to find property in Crimea

1) At AccessCrimea we provide a personalized service to buyers looking to purchase real estate in Crimea, Ukraine. We are not a real estate agency, but work with the best and most reputable real estate agency in Simferopol to bring you the most sought after properties at the best rates.

2) We can disuses possible options with you, and then search the market for you, and narrow down the field to find the options that best suit your requirements.

3) We will work to get you the best price. Many property websites aimed at foreigners tend to offer only the more expensive options, and often at a price higher than the real market value. We are on your side; and will get you a property at the price that locals pay.

4) We have detailed knowledge of the property market here; concerning pricing, property zoning, cultural quirks concerning real estate in Ukraine, and specifics relating to utility payment and property maintenance.

5) Through AccessCrimea, we can provide you with full support when you travel to Crimea to purchase a property. Accommodation, transfers, translations; its all covered.

I have personally bought some property in Crimea, and there are many tips that I can give you regarding real estate in Simferopol and Crimea as a whole. Small pieces of knowledge that could dramatically affect your success in investing in real estate in this part of the world.

For instance, here are a few tips;

1) Simferopol is flooded with 3 bedroom apartments and they are currently much less in demand than one and two bedroom flats; which are hot property. Generally, flats of a large square area can be a bad investment, as the size of the utility bills is closely linked to the size of the flat.

2) Locals shy away from flats that are on the lowest floor, the highest floor, and on the side of a building.

3) In Simferopol the area of town has great significance. There are certain parts of town that are in great demand, and others where this demand is much lower. Some investors like to do up flats and sell them on for a profit. This is only worth it in some parts of town; in others this a cap on the price of property no matter how could condition it is in.

I've bought real estate in Crimea, now what?

If you buy property in Crimea, what can you do with it then? These are the 3 most common options;

1) Rent it out on a long term basis to residents

2) Rent it out on a nightly basis to tourists

3) Do the property up and sell it on for a profit

You can rent property out in Ukraine at 5-7% of the property value per year. A flat in Simferopol $40,000 USD would cost about $200 a month to rent.

If you want to rent out a property, then this can easily be arranged. You will be taxed however; at the rate of 26% on your earning from the rental. If your tax burden is higher than $50 a month, then you can become part of a wonderful system in Ukraine. It is very simple for you to obtain a private entrepreneur code in Ukraine. With this code in hand, you will be charged a flat rate of about $50 a month for any income that you make with Ukraine up to $100,000 a year.

We can arrange it so that your property is managed in full or in part. An agent can find tenants, collect money, and look after your flat, meaning that you do not have to worry about your property at all.

Property maintenance costs in Crimea

These are low in Crimea and Ukraine as a whole, although they have doubled in the last year and could increase again this year. The monthly maintenance fee for a one room flat in Simferopol including electricity, gas, water and taxes (assuming there is one permanent resident in the flat) is no more than $30 a month.

Real estate improvement costs:

Some foreigners choose to renovate their property. Although the price of materials is not dramatically different to western prices, the price of labour is; and a typical one bedroom flat can be fitted out luxuriously for around $8,000. For about $5000 you can do what is called 'Evro-remont'; a common term in Ukraine, which refers to a property that has been stripped of its archaic communist interior and re-done in a modern more 'European' style. Such flats are considered prestigious and are in demand. In short, Evro-remont means installing plastic framed windows and a metal door, tiling the bathroom and kitchen and fitting modern utilities, carpeting or laminating the floor and wallpapering or painting the walls of the bedroom/lounge, replacing the light fittings and sockets, and, if necessary, installing a new water heater.

Fees, taxes and red tape

The Buying Process:

Foreign citizens have the right to buy and own property in Ukraine. Your property rights are set forth in the Constitution of Ukraine and law of Ukraine "On Ownership". The law permits property owners not only to own property, but also use such property for commercial purposes, lease property, and keep the revenues derived from its use; after all the necessary taxes have been paid

1) If your stay in Ukraine will be short, then you should get a Power of Attorney drawn up by your local solicitor, and notarized. This authorizes the property agency in Crimea to complete the legal formalities in your absence.

2) The 1^st step is to sign a Preliminary sale/purchase agreement and pay a deposit of (on average) $1000-2000. This agreement sets out the terms of purchase, including the date when the main contract will be signing and completed. This agreement is signed in the presence of a Notary officer. If the seller of the property then goes back on the deal, by law he or she must pay you the amount equal to double the deposit.

3) Signing of the main sale agreement and transfer of funds. The money is usually transferred into the buyer's Ukrainian bank account, and then handed over to the seller of the property.

4) Registration of the purchase with the state authorities. To save the buyer's time, this can be conducted by the property agency using the Power of Attorney.

Documents you need to bring:

1) Your passport.

2) Copy of your birth certificate

3) Ukraine taxpayer identification code certificate; this can be obtained in Kiev or a representative such as the property agent can do this for you with your passport and a power of attorney)

4) A notarized Power of Attorney (If required).

5) If a buyer has a registered marriage and he/she has come to Ukraine without the wife or husband, he or she must have the following documents:

- The copy of the marriage certificate

- A notarized copy of the husband's/wife's agreement to buy a property

- A copy of the husband's/wife's passport.

When you purchase real estate in Crimea and Ukraine, as anywhere else, there are fees to be aware of. They are listed as follows:

Buying a flat:

1) Agency fee - 3.5-4% of the price of the flat. This is not cheap, but good agencies do offer a very comprehensive service with full legal accompaniment during the purchase, as well as background checks on the property to make sure there are no problems later on.

2) Tax 1%-2% of the price of the flat. When a property changes hands in Ukraine, the total tax is payable is 2%, but this can be split 50-50 with the seller.

3) Notary fee - $200 for overseeing the legal aspects of the purchase.

4) Money transfer fees.

Selling a flat which is smaller than 100m2:

1) Tax - 1%

2) Notary fee - $200

3) Money transfer fees if relocating back to home country

Selling a flat that is larger than 100m2:

The same as above, with one important exception; Tax - 1% up to 100m2, and 30% on the value of the area above 100m2.

If you sell more than 1 property in any one year, then you have to pay a tax of 5% on the selling price of these subsequent properties.

Transferring money:

It is simple to transfer legally earned money out of Ukraine. If you sell a property, the money will however have to be changed into Ukrainian Grevnas before it can be transferred. This is not too big a concern as the currency has been stable at around 5Gr to the dollar for many years now.

I'm interested. What's the next step?

Contact us  and indicate your interest in real estate in Crimea. We can discuss your needs and send you some examples of properties that meet your budgetary requirements. Ultimately, most people choose to travel to Crimea to purchase property in person (even though it can be done remotely). In this case we can arrange your trip for you so that you get the most out of your time here, and most importantly, obtain the property that you want, with the maximum amount of ease.