Real estate

House in Europe with a surprise

In the Ural region in 2005 representative offices of Western and Moscow companies selling foreign real estate began to open. So, today in the Urals Comprarcasa is represented – a Spanish real estate agency, the founder of the Spanish Association of Real Estate Agents API; Westhome – an international corporation offering real estate in 50 countries of the world; TRinfo – a Moscow company specializing in real estate in Turkey; BGP Services Ltd, offering housing in Bulgaria. Among local players, the most famous are the Yekaterinburg real estate agency LiCom, which offers the purchase of housing in European countries, as well as in Malta, Turkey, the UAE; real estate company “Eurobeare”, specializing in real estate in Bulgaria; Chelyabinsk real estate agency “Companion”, Center for foreign real estate in Chelyabinsk. Large real estate agencies MAN, BK Real Estate, and others are showing interest in this business.

The principle of work of real estate companies operating in the Ural region is the same – full support of a client’s transaction abroad. This includes informing about the market situation in a particular country, selecting an object according to the specified characteristics, legal and financial advice, assistance in buying tickets, obtaining a visa, preparing documents for obtaining property rights by the client. “After completing the transaction, we continue to work with our client, providing him with the following services free of charge: consultations on repair, furniture selection, and, if necessary, solve issues related to rental housing. We form partnerships with customers, as trusting relationships are of great importance in our business. After all, as a rule, our new customers are friends and neighbors of old customers, the principle of “word of mouth” works, ”said Lev Rozov.

The average size of the agency commission is 3–6%: it is usually paid by the property owner or builder – it is included in the final cost of the property. Only part of this amount is due to regional intermediaries: the bulk of the money is transferred to the head office, and then distributed according to the share prescribed in the agency agreement. One way or another, in whatever country the real estate is purchased, the client should provide, in addition to the amount necessary for the purchase itself, the costs of registration fees, notary services, payment of the annual real estate tax and utility bills.

The most loyal conditions for the purchase of real estate in Bulgaria and Montenegro. The size of the state duty for the transaction, tax and notarial fee will total about 3% of the amount specified in the contract. In Turkey, the additional costs of the buyer may amount to 0.5-1.5 thousand euros. This amount will be required to pay for services to obtain a permit to purchase a home by a foreign citizen and a residence permit for six months, without which it is impossible to buy real estate. Plus to this – cadastral fees when preparing a document confirming the ownership of the object. Sales taxes (1.5%) and acquisition taxes (another 1.5%), calculated from the value indicated in TAPU in practice, are also paid by the buyer. In Spain, the cost of making a purchase is about 9% of the value of the property. It is expensive for buyers to buy a property in Italy: the registration tax here is 10% of the declared value of the purchased property, and when registering real estate for a legal entity – twice as much. The cost of registration of purchased property in Cyprus is formed from such articles – stamp duty in the amount of 0.15-0.2%, registration fee – at least 3% of the value of real estate. There is also a property tax, which is 0.35%, if the value of the property exceeds $ 550 thousand. There are municipal taxes on the island, which amount to $ 80-220 per year for one object.

In France, the number and amount of taxes levied on owners depends on the type and value of the property, as well as the purchase scheme. Property tax is paid by property owners of more than 732 thousand euros. If the purchased apartment or house is empty for a long time, the owner will have to pay the so-called duty on empty housing. And in Spain, for the conclusion of a purchase and sale transaction, the consent of the spouse of the property owner is necessary, otherwise the rights of the new owner can be challenged at any time. In addition, you must be vigilant when signing the main official document of sale. In order to reduce taxes and registration costs, the Spaniards often recommend that gullible foreigners indicate the value of the property that is 10-20% lower than the real price, without warning that legal problems will necessarily arise in the event of resale of such property.

In some countries, there are restrictions for foreigners in acquiring real estate. In the Czech Republic and Slovakia, a Russian cannot buy real estate without creating a legal entity, which will cost about 6 thousand euros.

Realtors indicate that at present, almost all foreign real estate objects are bought at their own expense, despite the possibility of registering mortgage transactions. The Ural real estate companies are gradually promoting the mortgage service – a Russian citizen can apply for a loan from a foreign bank. The list of necessary documents for submission to a local bank is standard: a salary statement indicating the position and salary, an extract from the bank account and recommendations of the bank that served the client’s accounts at the place of registration. These documents, translated into English, can be obtained from a Russian bank. In Cyprus, mortgage loans are provided by all local banks. The loan rate depends on the currency: from 4-4.5% per annum in Swiss francs to 7% per annum in US dollars. To speed up the procedure for considering applications in Cyprus, a document confirming the solvency of the borrower (ownership of other real estate, securities) may be useful. To obtain a loan for the purchase of real estate in Greece, you will also need a tax return for the last two years. Moreover, when buying property in Greece it is convenient to use a mortgage loan from a Cypriot bank, since Greek banks do not give loans to non-citizens of the European Union. A loan is granted at 60% of the value of the property at a rate of 6.5% per annum in euros. In Bulgaria, a mortgage for non-residents is not yet available. Now the legislative base is being worked out in connection with the requirements of the European Union and it is planned that during 2008, Bulgarian banks will begin to issue mortgages to non-residents. In Montenegro, the loan rate for non-residents is 8% per annum in euros. However, non-residents can get a loan only for a legal entity.

Not knowing the laws of a foreign state, becoming the owner of square meters abroad, you can encounter a lot of problems. For example, to become a victim of fraudsters working in the real estate market and as a result lose both money and housing. Local real estate companies prefer not to talk about the negative sides of transactions, but at the same time they note that they themselves are not immune from unpleasant surprises. “We planned to provide services for conducting transactions on foreign real estate, we even concluded direct contracts with developers in Cyprus and Bulgaria, but so far we are not providing this service. The reason was the lack of personnel with knowledge of a foreign language, legal features of other states, ”complains Anatoly Kholosha, director of Tyumen Real Estate CJSC. And the president of the MAN Real Estate Center, Nikolai Savin, added that the provision of foreign real estate services involves a lot of preliminary work by a realtor in establishing partnerships with foreigners, studying the taxation of certain states, otherwise problems cannot be avoided.

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