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Russia - Buying Property
Who Can Buy Property In Russia?
Anyone with adequate financial resources can buy property in Russia, regardless of their nationality, profession or residency status.
There are only a few exceptions to this rule, in the national interest. As an international individual or company, you may not buy property or land which is in:
• Arable farmland;
• A National Park;
• A military facility;
• A border zone;
• An oil or gas zone;
• One of the remaining ‘closed cities’, home to sensitive strategic facilities.
Buying Property Does Not Confer Residency Status
It is not possible to receive a residency visa to stay in Russia by purchasing a property there. It doesn’t matter how much money you have to invest in your Russian home, you must still qualify for residency under the same terms as everyone else.
Choosing An Area For Your Russian Property Purchase
If you’re looking for a second home in which to enjoy weekends and holidays away from the busy city, make sure there’s enough infrastructure to meet your needs. Do you need a variety of destinations to keep you entertained and plenty of restaurants to try? Will the property be self-sufficient when you spend the snowy winter months in the city?
For your main home, your route to work and access to friends are likely to be top of the list. If you have a family, then proximity to good schools is important, especially if your children will be attending an International School. The traffic in Moscow is notoriously bad, so if a journey is slow or difficult, stop to consider what it would be like to do that journey twice a day.
You also need to consider the safety of an area. The inequality of wealth and power in Russia is acute, and alongside corrupt or ineffective state systems, there are plenty of desperate people who are willing to steal for the things they need. Gated communities and apartment blocks with concierge services will protect your home and possessions when you are away at work or on holiday.
Most expats looking to purchase a Russian home want to buy somewhere in Moscow. The ExpatFocus article Finding the Perfect Neighborhood in Moscow will help you find a great location to satisfy the needs of you and your family.
Will The Property Be Suitable For All Seasons?
The weather in Russia varies considerably. Whereabouts you are located in this vast country will have an impact on local conditions. However, even the large cities popular with expats, such as Moscow and St Petersburg, can experience challenging extremes of temperature throughout the year.
In the winter, snow and ice are almost permanent companions. Siberian winds can drop temperatures to Arctic levels. Just a few months later, the pleasant summer days can suddenly turn into a heatwave and make homes and public transport unbearably hot.
When you are looking at a prospective new home, you will only be able to assess it in one set of weather conditions. Therefore, stop to consider the impact that hot, cold or windy weather will have.
Check that there are adequate heating and insulation, and that they are in good order. If the windows look a bit draughty, by winter you’ll be looking to replace them quickly. With substantial amounts of snow due for several months each year, your roof and guttering have to be in great condition.
Some apartments in the city may have air conditioning units fitted. These won’t be necessary except for the few days there’s a heatwave, but at this point, they become invaluable. Just remember to budget for the running and maintenance costs, which can be a surprise if you’ve never had air conditioning before.
A good building surveyor will check all aspects of the property which could be affected by weather conditions, and alert you to any foreseeable problems. This is therefore a worthwhile investment before you finalise your purchase of the property.
Buying Properties In Russia Off-Plan
You can find developers building new apartments and houses all over Russia. Typically, these will be sold before the building work has finished.
There are obvious risks to these purchases, as the builder could run out of money or do a bad job. Involve your lawyer right from the start and make sure everything is clearly set out in a contract before even the deposit is paid. The contract must be in Russian for it to be legally enforceable, but an English-speaking lawyer should be able to provide a translation before you sign.
Make sure funds are paid out over time according to the satisfactory completion of building stages. These should be set out in the contract alongside a proposed timescale which should specify the detail of work required as well as the percentage of funds due. Having an independent building surveyor examine each stage should quickly identify where work has been done badly or remains outstanding.
You need to plan your own life carefully around the proposed timescale. You will probably be renting and need to give your landlord adequate notice, yet also be able to cope with any unexpected delays of days or even weeks.
Unexpected Quirks Of Russian Apartment Blocks
At the end of 1991, Russia became an independent state, no longer part of the Soviet Union. This is just one generation ago, meaning that much of the housing stock from the Soviet era still stands.
You can often spot the bleak, monotonous apartment blocks which were built to house families effectively and affordably. In many flats, there was only one bedroom. The living room doubled up as a second bedroom at night. With the significant increase in property costs, this still happens today, meaning apartment blocks remain largely unchanged, even when sitting between new luxury apartments of glass and steel.
Sometimes you will come across apartments that used to house several families. They have between six and 10 rooms, with limited kitchen and bathroom facilities. Even today, individual rooms may appear for sale, but expats should avoid these. Apart from the obvious issues about living in a sub-divided flat, the legalities of ownership and maintenance are difficult to establish. This would be a purchase riddled with problems and will be difficult to hold as an investment, even if the asking price looks like a bargain.
Luckily, current demand is changing the design of new apartments. Two- and three-bedroom apartments are now common, with many features you’d find on offer in western Europe.
Find An Independent Lawyer In Russia
You should never purchase a property in Russia without the services of an independent lawyer. Due diligence is paramount.
Russian systems can feel overly bureaucratic, but when it comes to investing significant sums of your money into one asset, you need to be sure everything has been done right. Your lawyer is responsible for doing all checks thoroughly and correctly, obtaining all required documents in the specified format, and registering your ownership so it is watertight from legal challenge.
If you agreed to hire a lawyer recommended by your estate agent or property developer, you have no idea what financial or other relationships already exist between them. Laws exist in Russia, but there are plenty of people operating around the rulebook and usually getting away with it. The ‘special discount’ for a recommended lawyer may be genuine, but it’s worth paying a bit more to know for certain that the legal work has been done solely for your benefit.
The UK’s Foreign and Commonwealth Office (FCO) maintain lists of English-speaking law firms in key Russian cities.
In addition, you can reach out to the online expat community to ask for recommendations, although once again remember to take care. You are effectively announcing to a group of online strangers that you have money; every community in the world has people who take advantage of those situations. However, if you get two or three credible expats explaining why they recommend a particular law firm without asking you to get in touch or discuss your finances further, you can be more confident about the quality of the recommendation.
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