Great fortunes are made during the times of war, and this observation is proving true today in Ukrainian real estate market.

In fact, if you drive around Kyiv these days, you will see prolific construction of high-rise apartment buildings, rows of townhouses and single-family home developments. Despite the ongoing war with Russia, construction is booming all around Kyiv in anticipation of the new arrivals from the devastated cities and suburbs of Kharkiv, Mariupol, Kherson, etc. Plus, after the war, Kyiv will be overwhelmed with foreign companies and their employees, who will also need housing and office space.

And at the same time, there are very few sales taking place, with everyone waiting for the end of the war, and no bank financing is available, which gives prospective investors with cash a tremendous negotiating advantage.


In other words, today’s real estate prices are the lowest they will ever be, and Ukraine will surely win this war in the not-too-distant future. From a business viewpoint, this is the perfect time to invest in Ukrainian real estate.

So, what are the options for a foreign investor who is interested in projects that produce income? Two realistic choices exist: (1) to purchase apartment(s) to rent out for residential or office use, and/or (2) to purchase free-standing building(s) and the land underneath (to renovate and re-sell, known in the U.S. as “flipping houses”). The second option usually involves distress sales, and therefore can be especially profitable. 

Today, we’ll review the process of purchasing apartments for residential or office re-sale or rent (the building and land acquisitions will be reviewed in our follow-up article).

For a mid-size investor, who does not have enough cash to buy an apartment in London or New York, investing in apartments in Kyiv is an excellent option, especially considering the low expenses associated with property maintenance (minimal taxes, condo fees, etc.). This way, a savvy investor can rent out the apartment (either for residential or office use) and then sell it a few years later, after the property appreciates in price. So how does a foreign investor go about buying an apartment in Kyiv? 


Most investors focus on buying older apartments in the center of Kyiv, because new construction in the center is prohibitively expensive. These are older apartments (with or without repairs), and therefore it is vital to conduct a full inspection of the property. In our experience, many old apartments have legal and practical problems involving the title (encumbered ownership rights), unregistered construction that does not comply with the building’s technical passport, undiscovered fungus (especially in the showers), leaky pipes (sewage, water, gas), etc. That’s why in addition to experienced lawyers it is also necessary to have a trustworthy property inspector or at least a knowledgeable handyman who can assess the depth of all the problems.

From a legal perspective, in all cases involving real estate questions of security in the property’s title and ownership rights predominate the agenda. The reason is simple: fraudulent transactions abound and, consequently, all issues connected with title transfer and the identity of the true owner must be fleshed out before the actual execution of a sale/purchase agreement before a notary public.


To avoid the pitfalls, any potential investor must review the background documentation that serves as the ultimate proof of ownership, including:       

·      if the ownership was acquired prior to 2013, you’ll need to obtain the title document (confirmation of ownership) that is registered with BTI (Bureau of Technical Inventory); if the property was bought after 2013, you will need to obtain an extract from the State Register of Immovable Property Title (anyone can request such an extract because this is public information, readily available upon request for a minor fee of about Hr. 33. We often perform this simple task to check properties upon clients’ request);

·      technical passport (submitted if it is inalienable from title document);

·      list of household members (issued by a housing management authority or other relevant authority for the issues of residence registration);


·      in case the property owner has underage children, consent from the child custody and guardianship agency should be obtained and provided in the name of the minor; the birth certificate of the minor; obligatory presence of parents with passports and tax ID codes at the sale;

·      waiver from all co-owners of the right to exercise their preemptive purchase rights;

·      an independent expert appraisal of apartment value for taxation purposes.

Furthermore, the foreign investor can be either a physical person (an individual) or a legal entity (usually an LLC). The following additional documents are required in both cases:

(a)       Individual investors:  

·      passports and tax identification numbers of the parties (if executed via a legal representative, they should present a notarized power of attorney (PoA), their passport and tax identification code);

·      notarized confirmation of consent to the sale or acquisition of property from a spouse;

·      marriage certificate (if applicable).

(b)       Legal Entities/Investors:

·      the founding documents of the legal entity (Charter, Extract from the Unified State Register of Legal Entities and Natural Persons-Entrepreneurs);


·      the passport and tax identification number of the representative authorized to act on behalf of the legal entity, and a document confirming the authority of the representative (usually a director or general manager – minutes on appointment to the position and respective HR order, or other representatives – a notarized PoA);

·      minutes of participants’ meeting with the approved decision to alienate [transfer property – ed.] or acquire property;

·      company seal (if applicable).

Finally, the investor should negotiate with the seller the following expenses related to notarization of the sale-purchase agreement: (a) notary fees for preparation and certification of sale-purchase agreement; (b) payment to the notary of the state duty of 1 percent of the purchase amount indicated in the agreement, but not lower than 1 percent of the appraised value (this is usually split between the buyer and the seller); and (c) 1 percent of the purchase amount indicated in the agreement (contribution to the Pension Fund, paid by the buyer).

After the above documents are collected, the purchase procedure is straightforward: first, the parties and the notary review and verify the aforementioned documents. Next, the sale-purchase agreement will be signed and all taxes and notary fees will be paid. Finally, the settlement will occur (usually in cash or by wire transfer).


After signing and notary certification of the main agreement, a seller will receive a notarized copy, and the buyer receives the original and a notarized copy, an Extract from the State Register of Immovable Property Title confirming their registration as the new owner, and the property’s technical passport.

The investor will have to perform subsequent registrations as the new owner, including with the Zhek (or an in-house condominium association), electricity, water, and gas providers, etc.  These tasks are usually performed by real estate agents or lawyers with a power of attorney.

In conclusion, one of the consequences of the war is the decimation of Ukrainian real estate market, where all prices (for rentals and acquisitions) have dropped to their lowest level in the last thirty years.  For a foreign mid-size investor, however, this is a perfect time to buy an apartment in the center of Kyiv that can provide rental income in the short term and is guaranteed to significantly appreciate in value in the next one to three years. 

The views expressed are the author’s and not necessarily those of Kyiv Post.

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