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GoodWife / Planet-Love Archives => Threads started in 2004 => Topic started by: tfcrew on December 03, 2004, 05:00:00 AM

Title: Exiting Ukraine with "substantial funds"....?
Post by: tfcrew on December 03, 2004, 05:00:00 AM
Suppose a citizen of Ukraine sold their property.
They receive 20-25K US (or so)  
How would they bring out such a sum legally?

Title: Re: Exiting Ukraine with "substantial funds"....?
Post by: TimInUkraine on December 03, 2004, 05:00:00 AM
... in response to Exiting Ukraine with "substantial f..., posted by tfcrew on Dec 3, 2004

First of all they would have to prove that they earned this money legally (such as from the sale of a flat). The problem--at least for this particular situation--is that when most people sell their flats here the documented amount (on which they must pay a tax duty)is often far less than the actual amount. For example, I recently purchased a building for $23,000. According to the official appraisal, the building was worth 18,000 Hyriven (less than $3,500). When I renovate it and sell it, it will be sold for a lot more but the official appraisal, the one that shows up on the title will not be much more than the original 18,000H. While this is great for property developers, it makes it difficult to establish source of income.

I'm not sure about Ukrainian citizens, but foreigners are subject to a repatriation tax of 15%--basically the tax on investment business profits that are taken out of the country.

Title: UltraThanks..
Post by: tfcrew on December 04, 2004, 05:00:00 AM
... in response to Re: Exiting Ukraine with "substanti..., posted by TimInUkraine on Dec 3, 2004

Wonder what city you're in? You mentioned Kherson.
I glanced @ your profile.
Feel free to view mine.
Most likely I'll email some details.


Title: Real Estate in Ukraine
Post by: Streetwise on December 03, 2004, 05:00:00 AM
... in response to Re: Exiting Ukraine with "substanti..., posted by TimInUkraine on Dec 3, 2004

I've been looking into investing in real estate in Eastern Europe. As one who has already taken the plunge, do you have any advice for purchasing in Ukraine? The main question I have is, are there any restrictions on the purchas eof real estate by foreigners? For example, in Romania it used to be ok to buy an apartment but to buy land was more tricky. And what about these taxes, are they applied as an annual percentage? Are there any up-front taxes to be paid at the time of purchase? I've been told that when buying an apartment in a purpose-built block, it's important to consider the era in which the block was built; for example in Latvia they told me to avoid some of the post-Stalin buildings that were designed to last for 20 years and have been standing for over 30 already. Grateful for any info!

Title: Re: Real Estate in Ukraine (longish)
Post by: TimInUkraine on December 04, 2004, 05:00:00 AM
... in response to Real Estate in Ukraine, posted by Streetwise on Dec 3, 2004

Buying R/E in Ukraine is very straightforward and there are safeguards. They have Notaries here that perform similar tasks to the title search company in the US, and all of the contracts can be easily officially translated into English. Most Notaries will also insist on a certified interpreter to be present (for 50H a good idea).

As far as restrictions go, foreigners are not able to buy land here. No other restrictions. If you are buying a flat, no problem. If you are buying a house with land, you need to check to see if the land has been privatized or if the government still owns it (the land other than the land under the building, that is). If it has not been privatized, you need to ask the sellers to privatize it because you as a foreigner, if you don't have connections, will find this process almost impossible. There is very little land for sale in Ukraine, and if there is, and it's decent, the big boys will snap it up anyway.

As far as taxes go, you pay a one time 2% tax on the government's valuation of the property, when you buy and when you sell (and, as I said in my last message the government valuation on most building is significantly lower than the market value). Like in the States, you should insist on at least a 50% split with the buyer/seller. You have to pay monthly taxes on your property, but they are very minimal.

As far as condition of the property goes, get a professional builder to give you advice. Yes the flats built during the Stalin era (Stalinkas) are the best, but they also sell for about 2 times the price of a similar sized non-Stalinka in the same area. The pre Stalin buildings are usually very crooked and have lots of work needed. The upside is that they are usually larger and have a variety of designs. The post-Stalin buildings are newer and usually made from concrete slabs, are straighter, and easier to renovate. The downside to them is that they are badly laid out and because of their design, it's hard to knock out walls. The rooms are also very cramped.

They have new buildings available, but they are very expensive (especially in Kiev) and the investment potential for them is minimal (or at least long term). But there is a lot of money to be made in renovations. Basically it costs about $100 per square meter to euro-renovate (sheet rock, tile, new plumbing and electric, laminate floors, Italian bath fixtures, etc.) a space that doesn't have major problems. A euro-renovated space will sell for about $250 a square meter more than one that is not renovated. For example, you buy a 80 sq.m P.O.S. (sh*tty in terms of decor, windows, plumbing etc--not structurally--no point paying for things you will be replacing anyway)in downtown Kherson for about $16,000. You put about $8,000 into it and the flat is worth $36-40,000 depending on the uniqueness and quality of the finished design. However, it'll take you about 6 months of screaming, yelling, swearing, and kicking workers to get this done. If you can afford to have several projects going at one time, it's a good deal.

The reason for people not taking advantage of this big spread and renovating their homes themsleves is that most people don't have the cash to live in one place while investing in another--even the business class often need the proceeds of the sale of their old place to pay towards the new one. And if they are rich, they don't have the time or inclination.

Even without renovating, investing in property is good business over here. I have a building in downtown Kherson that has not had any work done on it because of a lawsuit with the neighbor. It has simply been sitting for 14 months. In this time, it's value has risen about 60%. While this is not typical, all property is rising. I think, however, if the dollar crunch and frozen bank accounts lasts for several months, there will be a lot of deals as business owners will have to liquidate some of their property to spend on inventory.

Hope this helps.

Title: Re: Re: Real Estate in Ukraine (longish)
Post by: Streetwise on December 04, 2004, 05:00:00 AM
... in response to Re: Real Estate in Ukraine (longish), posted by TimInUkraine on Dec 4, 2004

Many thanks indeed, that is good information! One more question - is it easy enough to get hold of reputable tradesmen (electricians, plumbers, plasterers etc) or is it better to work with one building firm who would take care of the whole renovation, including these items? And are such firms easy to locate? All info much appreciated.