Why Invest in Ukraine? Without question there are many reasons to invest in Ukraine; the nation is strategically located bridging the divide between the Commonwealth of Independent States, Eastern Europe and the European Union, it has a population of fifty million citizens eager and willing to work, to learn, to spend and to embrace capitalism, the country is independent, economically stable, labour resources are strong, economical and qualified and there is a housing deficit. Just look at the benefits:
 • Low living costs: around a quarter of those in the UK
 • One of the fastest growing economies in the world
 • Developing tourist destinations
 • Regular flights to Kiev from London
 • Simple and favorable buying process
 • Strong property ownership laws
 • Quality ski resorts with a long season

Ukraine Real Estate Welcome to the exciting new world of Ukrainian property. From the capital Kiev, through the beautiful Carpathian Mountains to the sunshine of Crimea, this big country offers property to suit all tastes and budgets.

How to participate in Ukraine's burgeoning
real-estate market. Many foreign visitors to Ukraine are well aware that Ukraine's real estate market has been developing rapidly. Apartment prices in Kiev and other major cities of Ukraine have "gone through the roof" in the past several years. Happy indeed are the investors who purchased real estate (apartments) in Ukrainian cities in the early 90s for a few thousand dollars and have seen their property rise in value an average of 20-40% a year ever since. Add to that revenue from apartment rental and you have a very profitable asset! Many investors made their decision to enter the Ukrainian market after the Orange Revolution (Nov-Dec. 2004), which demonstrated that the country has strong democratic and European leanings and will likely continue moving in this direction. As you will see below, acquiring real estate in Ukraine is not difficult at all.

Property appreciation patterns Property appreciation began in the early 1990s after Ukraine's economy hit bottom and has been most pronounced in Kiev, Odessa, Lvov, Dnepropetrovsk and other large cities. Soon afterwards prices in resort areas of Crimea began climbing, and now real estate prices in Yalta are often even higher than in Ukraine's capital Kiev. In the late 90s property values began rising in the Carpathian region and in other desirable vacation areas around the country. There are very few places in Ukraine where no price action has occurred since the post-Soviet economic collapse, but in general property prices in villages and small towns around Ukraine remain very low. Property values show no sign of halting their growth, and real estate analysts generally agree that the fundamental causes of the growth in prices in Ukrainian cities will continue to push up prices for several more years at the least.

Causes of Ukraine's real estate boom Among the causes of the rise in price of real-estate in Ukraine are the following:
 • Low levels of housing per capita in Soviet times;
 • Soviet system kept people from moving to big cities, but now they are allowed to;
 • Opportunities and capital concentrated in big cities;
 • Rising income levels in cities and resort areas;
 • Lack of investment alternatives;
 • Mistrust of banks after losing life savings during the inflation and banking crisis of the early 1990s;
 • Increasing accessibility of bank loans and mortgages; This boom has occurred in spite of very high interest rates. When these rates finally lower, demand for real estate will likely rise further.

Documents needed for purchasing real estate in Ukraine Any foreigner may purchase real estate in Ukraine regardless of residential status or visa type. Foreigners may buy any real estate other than non-privatized property and agricultural lands; however, almost all foreign investors are interested in residential real estate. Just a few documents are needed to transfer residential property in Ukraine:
 • Passport
 • Ukrainian taxpayer identification code certificate; this can be obtained in Kiev (find out how to do this here), or a representative who can do this for you with your passport and a power of attorney.
 • If buyer is married and comes to Ukraine without his or her spouse: copy of marriage certificate, copy of spouse's passport, and notarized copy of spouse's consent to buy property in Ukraine.
 • Ukrainian property can be bought through some real estate agencies without the buyer's physical presence. However, for obvious reasons almost all buyers of expensive property prefer to make the deal in person.

Getting money into Ukraine to buy property. Opening a bank account. Up to $15,000 USD may be brought into Ukraine without special documents (until recently it was $10,000). Most foreign property buyers open a bank account in Ukraine and transfer money from abroad. Then money can either be transferred to the seller's bank account or taken out in cash. Opening a bank account in Ukraine is easy and requires these documents:
 • Passport.
 • Taxpayer code certificate.
 • Proof of foreign origin of money (if foreigner puts cash in account after opening); a custom's declaration from entering Ukraine, a bank receipt from exchanging cash or travellers checks, or a bank receipt from receiving cash with a credit or debit card.

Real estate improvement and maintenance costs In most cases foreign buyers immediately renovate their newly acquired residential property, typically spending $10-15 thousand on repairs and construction. In order to build new structures on property acquired, all real estate owners must obtain a building permit. Many locals and foreigners opt to pay building firms (usually around $500 or more) to do the whole process for them — from drawing up architectural plans to standing in line in all the government offices that put their stamps of approval on the plans. Property maintenance costs in Ukraine are generally very low. Utilities usually amount to $30-50 per month for an average apartment, and there are no property taxes (other than the tax paid when selling real estate). Foreign owners of real estate in Ukraine often install security systems, especially if they are not renting out their property. Property that is consistently rented out usually requires periodic repair, which may add up to 5-20% of rent.

Renting out property in Ukraine Typical rental prices in Ukrainian cities are usually 5-10% of the property value per year, or 0.8% per month. In other words, an apartment that would currently sell for $80,000 USD would probably cost $450-800 per month to rent (closer to the middle of this range would be most typical). Many real estate agencies offer facilities management services, allowing foreign owners to not have to worry about their property at all. Owners can agree to pick up rent from the agency periodically or have the money deposited to their Ukrainian bank account.

Taxes on property rent Money earned from renting out real estate is taxable in Ukraine. If owners are not Ukrainian tax residents, they must pay 26% on earnings from real estate rental — twice the rate of 13% (flat tax on income) for residents. Owners of higher-end apartments or multiple properties may find it worthwhile to register as private entrepreneurs and pay a fixed monthly tax instead of percentage-based income taxes on money earned from rent. This standard tax of around $40 USD does not change for any level of income related to entrepreneurial activities that amounts to less than 500 thousand UAH (nearly $100,000) per year. Foreigners can also create a Ukrainian firm that will be a tax resident of Ukraine. This firm will pay different kinds of taxes on earnings and, in addition, will be able to legally acquire non-privatized and agricultural land which non-residents are not able to acquire by law. After land has been privatized and developed, ownership may be transferred to the foreign owner through legal means. Money that can be proved to having been legally earned in Ukraine may be transported or transferred out of the country with the necessary documentation. However, most foreigners prefer to leave their earnings in a Ukrainian bank and use it inside Ukraine.

Note For British investors this is an excellent time to buy as most transactions are in US dollars and the present exchange rate seriously favours the British pound.

Property in Crimea

Property Tour

Crimea Real Estate Expo 2007