Real Estate today
What To Expect When Buying Real Estate In Kiev
Kiev, being one of the oldest cities in Europe, possesses beautiful historical districts with architecture and monuments dating back to the eleventh century. Even during the Russian-dominated Soviet Union, the Ukrainian capital was considered one of the most beautiful cities of the empire. For a millennium, Kiev has acted as the as Europe’s a gate way to the Middle East and Asia.
With a population of 2.6 million, Kiev still retains a friendly sense of the country-side with lots of greenery, parks and forests. Over the recent few years, Kiev has shown signs of market reform and has experienced an economic upswing, which, in its turn has caused a building boom along with a mass privatization of apartments, stores, and cafes.
Of forty million square meters of Kiev's residential real-estate, only 2 million is located in the historical downtown part. The great majority of population lives in the giant soviet block that dominate the suburbs. There are three major historical districts: Khreshchatik, Podil, and Pechersk.
 Khreshchatik. Khreshchatik is located in a valley on the bluffs of the Dnipro River; it serves as Kiev’s business and city center. It is a popular shopping and sightseeing district. Khreshchatik Boulevard features huge Stalin-style architecture and wide tree-lined walking areas. The valley's name comes from the Slavic word khreshchata (crossed) because of the many ravines that once crossed it.
Podil. The name originates from the old Slavic word ‘podol’ which means lowlands; it runs along the Dnipro River side. Originally, it served as the city’s river port populated by craftsmen, merchants and fishermen. Present-day Podil is home to well-to-do students the artists. Podil’s narrow streets of two-storey buildings provide a good contrast to Khreshchatik, which is dominated by the monumental architecture of the Stalinist Era.
 Pechersk. Pechersk is situated on the hill just south of Kreshatik. This area was built up in 16th century, and during soviet times was home the governmental bureaucracy. The same holds true today as the Ukrainian Parliament (Verhona Rada) is set in the middle of this district.
Paperwork.
These days, Ukraine is undergoing a hard time trying to put an end to soviet-style bureaucracy. One of the greatest obstacles to buying real-estate in Kiev is the amount of red tape. However, with patience and a good lawyer at hand, it is manageable. Hiring a good local expert in legal issues, even if s/he charges a hefty fee, is a very wise idea for a foreigner.
Untility Bills.
The buyer of the apartment will inherit any unpaid bills on apartment. This is a concern because an apartment fees/bills may have not been paid for years. Most aparment buildings still run on the soviet central planning system, which encourages free loading since heat, electricity and water cannot be cut off to any one individual apartment, but instead the whole apartment building is one unit. A competent lawyer should make sure that you don’t have to pay these bills.
Ownership Titles.
Because of disrespect for individual rights and undeveloped legal system, business in Ukraine is influenced by interpersonal relations, which complicates the process of purchasing property. Quite often, it is impossible to check the legal status of an apartment without hiring an agency. Since many downtown apartments are owned by very poor and desperate families who may not pay attention to important details, the seller and the buyer cannot establish relationship of trust. The apartment papers may not be correct or be insufficient. There are numerous legal issues to keep in mind, as well. Do not let anybody fool you by selling you property with phony papers and then legally reclaiming it as their own.
An impressive number of Kiev residents have constructed buildings without authorization; some have added balconies and extensions, or built onto the sidewalk to make small stores. All of these «innovations» are illegal but not enforced until the owner decides to sell the property. In majority of cases, the required permission paper from ZHEK (the Ukrainian Housing Department) is missing, then they legally can’t sell their apartment and you can’t legally buy it. So you have to make sure that the seller’s paper work is straight, and this can take some work.
You can get into a nightmare of trying to keep track of the changes in regulation rules and laws. For example, taxes are doubled if the property entrance faces the street (not the inner yard). Residents and businesspeople have now reacted quickly, inventing all kinds of side entrances and fake hallways to get around this regulation. To avoid extra problems, try to deal only with good local experts you can rely on.
Lack of Legal System.
According to the European Bank for Reconstruction and Development (EBRD), the greatest deterrents to investment in Ukraine is the lack of an impartial judiciary, meaning that if you have to go to court, you cannot be sure that justice will prevail. The line between fraudulence and legality is fuzzy. It may be hard to get a strait answer and even harder to get a judge to rule in your favor without a sufficient bribe. Fortunately, the corruption has not been as bad in the home real-estate market. Some buyers proudly claim that they didn’t have to bribe anybody, but many have to admit that a bribe or two might have accelerated the process.
Money Transfers.
Many foreign property buyers state that their biggest headache is transferring money. “We paid hefty service charges and used a non-Ukrainian bank that is used to doing international transactions. I would be scared to try these kinds of transactions through a Ukrainian bank, and of course their fees for transfers are much higher.”
Conclusion.
Buying a home in Kiev is still very affordable, but because of the unknowns of Ukrainian culture, the following must be kept in mind.
First, a good preliminary research of the phycial area is necessary. Noone wants to end up on a flood plan in Podil or old cemetery or next to a major electricity line. The process of finding an apartment will certainly be a headache as there is a considerable number of apartments that for various reasons stay on the market for many months. Either the agent is incompetent and has the sole license to sell that apartment, or there is something wrong with the apartment that they don’t tell you. So it makes perfect sense to get someone to assist you in going through the ads and making a list of apartments that stay on the market. Unlike them, there is a good choice of good ones that come on to the market and are sold fairly quickly.
Second, give a good thinking to what you build (reconstruct, renew, etc). As long as you are paying, construction companies and architects will carry out whatever fantasy without considering any building codes or engineering standards.
Third, work in tight contact with an experienced agent and have a good lawyer. Be careful, take it slow, make sure you have some one who speaks your language and has your interests at heart, and then make sure they know a lawyer who is in the business. It is worth paying the fee for a good lawyer because there are constantly pitfalls that can turn out to be very costy.
Finally, buying a home in Kiev is more difficult than in the United States because there are more pointless regulations and paperwork. Without having someone competent to be at hand, you may kiss it good bye.
Tax Break: There is a 3% Ukrainian pension fund tax that foreigners are not required to pay when buying their first apartment. However, If you plan to buy a second apartment apartment, then this 3% tax applies.
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