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Property Purchase FAQ

Your Guide to Real Estate Purchase in Moscow



The Moscow real estate market has a relatively short history. In the Soviet times, all properties were state owned and people only had the right to “use” them. Apartments were distributed based on one’s place of work, and the options of moving were limited. In 1990, after the fall of the Soviet government, the Moscow real estate market emerged and Muscovites were able to privatize and subsequently sell and buy properties for the first time. Today, Moscow real estate is booming and offers many exciting opportunities and high returns on investments.

Please click here to read more about Moscow real estate investment opportunities.

Below are some of the answers to our clients’ most frequently asked questions. Unfortunately, this page cannot address all the issues of each real estate transaction; however, we will be happy to advise you on your individual situation and answer any questions regarding buying and/or selling properties in Moscow and offer professional guidance throughout the entire process. Please feel free to contact Anya Levitov with any questions about selling or buying real estate in Moscow.

You are also welcome to call us at +7 (495) 232-6703 if you are in Russia, or +1 (800) 840-6604 and +44 (20) 8002-9605 if you are in the US or UK, and our property consultants will be happy to assist you.

Can foreigners buy apartments in Moscow? Read

Is there a difference between foreign individual and corporate ownership of properties in Moscow? Read

Are there taxes on buying property in Moscow? Read

Are there taxes on sale proceeds? Read

Who pays the brokerage fee in Moscow? Read

How do I find a property to buy in Moscow? Read

Most sellers already have a realtor. Do I need a real estate agent on my side? Read

I have found a property to buy, can you assist me with checking its legal history and finalizing the transaction? Read

What will be my purchasing expenses? Read

Do I need to use a notary? Read

What are the notary fees? Read

How are property rights registered? Read

What are the bank fees for sale-purchase transactions? Read

Why do I need to check property history? Read

What are the main steps of a sale-purchase transaction in Moscow? Read

What is a depositary (preliminary) agreement? Read

Is the listing price legally binding in Russia? Read

What is the usual deposit amount in Moscow? Read

What is the procedure of the closure? Read

Is there any additional paperwork after the property is registered in the buyer's name? Read


Can foreigners buy apartments in Moscow?

There are no restrictions on foreign ownership of Moscow apartments.


Is there a difference between foreign individual and corporate ownership of properties in Moscow?

Both foreign individuals and corporations can purchase real estate in Moscow. The process of the deal and its registration is the same. However, the registration of the deal in the name of a foreign company is significantly more expensive than that in the name of an individual. Also, foreign company ownership makes it much more difficult to manage relationships with the city; it is often impossible to arrange for utilities and telephone services. Your Evans agent will help you to determine the right ownership structure considering your individual requirements.

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Are there taxes on buying property in Moscow?

Buyers do not pay taxes when purchasing a property, and property taxes on owning a property are still minimal. However, when buying, one should consider the implications of a future potential sale. Evans professionals will advise you on the nuances of tax residency issues, Russian Marital Code and other relevant issues.

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Are there taxes on sale proceeds?

The seller pays the tax on capital gains, i.e. on the difference between the purchase and the sale price. The tax rate for tax residents (those, who spend more than 183 days per year in the Russian Federation) is 13%, while for others it is 30%.

However, there are generous tax exemptions. If the seller owns a property for more than three years, the seller is exempt from all taxes. If a seller owns a property for less than three years, the seller receives an exemption of 2,000,000 rubles (approximately $60,000 US dollars). These exemptions, however, are ONLY valid for tax residents.

To avoid dual taxation in the country of residence, the seller can utilize dual taxation agreements, which Russia has with a number of countries. However, it might be worth inquiring about this in your country of residence regarding different fiscal nuances.

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Who pays the brokerage fee in Moscow?

The brokerage fee is paid by the party for whom the service is provided, whether it is a buyer or a seller. In both cases, the brokerage fee is usually calculated as a percentage of the sale price ranging from 6%, for cheaper properties, to 3% for properties costing around 3,000,000 USD.

The buyer's brokerage fee is inclusive of the property search, ownership documents and the “rights of use” check, arranging the deal closing, and the supervision of the final property transfer to the new buyer.

The seller's brokerage fee covers property evaluation and appraisal, property marketing (this entails using multiple advertising venues to reach maximum potential buyers), arranging property viewings, negotiating with potential clients, preparing the complete set of necessary documents for the transaction, arranging the deal closing, and supervising the final property transfer.

Most importantly, your Evans agent will act as your representative, protecting your interests during the negotiation of the sale-purchase deal conditions. We will prepare the necessary paperwork and perform the title search to make sure that the property’s legal history and title do not have any hidden problems. We will structure the closing procedure in order to guarantee that everything goes smoothly, that you don’t take financial risks or overpay in fees, and that you ultimately receive your apartment on time and with no legal liens.

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How do I find a property to buy in Moscow?

Unlike on the rental market, the seller’s contact is not the most important piece of information you receive when turning to a real estate firm. A great deal of information on apartments for sale, although scattered and often outdated, is listed in public sources or available online and through different publications. However, sorting through this information is extremely burdensome and time consuming.

Selecting the property and organizing a viewing, as well determining which options are more or less attractive, requires experience. Evans will be able to present you with the most complete and current information on all properties available on the market, including the ones that are not publicly listed. Evans will save you time and money by selecting only the attractive options according to your criteria, previewing them and providing you with complete and accurate information on both apartment specifications and possible risks and intricacies involved with each option. Choosing a property is the easiest part of the process. We highly recommend using a real estate broker or a lawyer with real estate expertise to represent your interests during your real estate transaction.

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Most sellers already have an agent. Do I need a real estate agent on my side?

Finding the right property in Moscow is only a small portion of the deal. Negotiations with the seller representative and minimizing your risks in a transaction are the most important parts of the process. Evans professionals will perform due diligence on the property, negotiate the conditions and the length for which the apartment should be taken off the market, prepare a list of necessary documents and, most importantly, structure the closing procedure and other important conditions regarding the deal such as the date after which the seller will be registered at a new permanent address and the physical removal of the sellers’ belongings from the previous property.

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I have found a property to buy, can you assist me with doing the title search and finalizing the transaction?

We will gladly provide you with full legal assistance. This assistance includes the following services in addition to many others: performing the title search, checking the seller's background and compliance with providing ownership documents needed to complete the deal closing, the preparation of a sale-purchase agreement, and the arranging of bank, notary, and registration logistics. The fee is usually half of our regular brokerage fee, but not less than $5000 dollars.

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Why do I need to check a property’s history?

The real estate laws have changed several times over the past 15 years. These changes necessitate the careful research of property history due to the fact that in some instances, your ownership rights may be challenged by previous owners or people formally registered in the apartment. Usually such risks can be eliminated if determined before the real estate transaction.

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What will be my purchasing expenses?

It is the norm in Moscow for a buyer to cover all closing expenses, including notary fees, state registration fees and bank expenses. Also, if you use a real estate agent to find your apartment and/or negotiate your deal, you will be charged a brokerage fee.

Click here to estimate your purchase expenses.

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Do I need to use a notary?

The law does not require a notarization of the sale-purchase agreement. However, there are a few specific cases when notarization is recommended. Since notarization is costly, Evans professionals will help you evaluate the risks of your real estate transaction and advise you on whether or not spending the money for a notarization is necessary in your case.

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What are the notary fees?

Notary fees vary depending on the sale price of the apartment and range from 0.7% for more expensive properties to 1.5% for smaller and less expensive ones.

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How are property rights registered?

Registration of the sale-purchase agreement with the Main Department of the Federal Service of State registration, Cadastre and Cartography for Moscow makes the transfer of property rights official by recording deal details in the state registrar. There are several offices around Moscow in which the sale-purchase agreement can be registered. The registration can be arranged by a notary or by a realtor. It usually takes 18 days for the Main Department of the Federal Service of State registration, Cadastre and Cartography for Moscow to complete the registration. The state fee is approximately 1000 rubles. In addition, there is a 8000 rubles fee if you choose to hire someone to take your paperwork to these offices on your behalf.

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What are the bank fees for sale-purchase transactions?

Although the overwhelming majority of real estate transactions are made in cash, sale-purchase transactions always take place in a bank. Here, the bank’s safety deposit boxes replace an escrow account to guarantee buyers and sellers that the payment is made upon the final ownership transfer. In this case, the full cash amount is deposited in a bank safety deposit box with the condition to allow the bank to release the money to the seller upon presentation of the complete package of registered documents under the buyer’s name.

Such bank services costs may range from $100 -$130 dollars per safety deposit box. Complex deals with alternative apartment purchases may require as many as ten or more of such deposit boxes.

More expensive apartments or the ones with foreign owners may sometimes use a payment by wire transfer. However, there is no well established institution of an escrow account, and therefore, ironically, such transactions are riskier than cash. Usually, the payment is made after the notarization and before submitting for the state registration. Since such transfers are made unconditionally, the state registration may be enforced or blocked irrespective of whether the payment was or was not made.

As an alternative to a wire transfer and/or costly foreign escrow account arrangements, Evans recommends using the well-established local procedure of a "Letter of Credit." The cost of its arrangement depends on the bank and varies from $500 USD to 2% of amount of the transaction. Not all banks are able to arrange a Letter of Credit, and very few sellers will agree to go through such a procedure.

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What are the main steps of a sale-purchase transaction in Moscow?

The process of buying an apartment can be divided into the following stages: finding a property of your choice or a potential client for your property, negotiations and signing of the preliminary agreement, preparing the closing and researching the apartment’s history, closing the deal, payment and registration of the deal, and finally, a property transfer.

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What is a depositary (preliminary) agreement?

Most real estate deals in Moscow extend over a period of two weeks to several months. The reasons for this are many. First, any real estate transaction in Moscow requires the collection of a set of current documents from various state institutions. Second, the buyer may need to secure financing or the seller may need to secure an alternative residence. As a result, there is a need for a preliminary agreement between the buyer and the seller. Preliminary or depositary agreements describe all of the conditions of the future deal as well as outline the list of the necessary documents to be provided by the seller.

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Is the listing price legally binding in Russia?

No. In Russia, a seller is not required by law to sell his or her property at or below the listed price. The current market conditions, with limited property supply and high demand, often push the property prices above their initial listing. Moreover, in a growing market it may happen that a seller will raise the price even after the preliminary contract is signed given that the property value increase justifies covering possible penalties stipulated in such a contract.

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What is a usual deposit amount in Moscow?

Upon the signing of a preliminary (depositary) agreement, a buyer pays the seller a deposit (usually in cash) to take the property off the market during the time that all the required documents are being assembled and the closing is being prepared. The amount of the deposit does not usually represent a certain percentage of the property price, but is rather a round number that both parties find acceptable.

According to the Civil Code of the Russian Federation there are two types of deposits: advance payment (Avans) and a proper deposit (Zadatok). Depending on your circumstances, Evans professionals will help you to determine which type of the deposit is best to use in your real estate transaction.

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What is the closing procedure?

If the payment for the apartment is made in cash, the full amount is deposited in a safety deposit box. Depositing the funds often involves bank officials checking the bills for authenticity. Unlike other transaction costs, this cost is usually covered by the seller. After this procedure is completed, the parties proceed to sign the sale-purchase agreement. The signing usually takes place at the bank, in an office of a realtor or in a notary office, in case if you choose to use a notary. The signed agreement is submitted for state registration, upon which the actual transfer of the ownership rights takes place.

If you choose to make the payment via wire transfer, the procedure may vary. Evans professionals will help you to develop a transaction procedure which will protect your interests.

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Is there any additional paperwork after the property is registered in the buyer's name?

On the property transfer date, the parties need to sign an Acceptance Act, which certifies that the apartment is transferred to the buyer in the acceptable and agreed upon condition. This Act, even though it does not need notarization, is an integral part of the paperwork for the apartment and should be kept by both parties.


Browse our listings for sale


Read a New York Times article about the Moscow real estate market (February 14, 2007)


Read a Moscow Times article about Moscow real estate transactions


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Contact Us:
Tel.:
+7 (495) 232 6703
(MSK 9am-10pm)
+1 (866) 976-9033
(EST 1am-2pm)
+44 (20) 3608-0592
(GMT 6am-7pm)
E-mail: