[BUYING AND SELLING REAL ESTATE IN RUSSIA]
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VII.
Th e principle of “unanimous destiny of land plot and objects closely connected to it”
− Value added tax (VAT): The VAT is payable on sale of real estate at the rate of 20 % of full purchase price. VAT is not imposed upon: ▪ sale of residential houses or premises and shares in such houses and premises;
Despite the legal distinction made between land plots and buildings located on them and considering them as separate property interests, one of the basic principles in the sphere of land law is the principle of “unanimous destiny of land plot and objects closely connected to it” which is as follows. A person, when acquiring a title to a building or construction located at the land plot belonging to the owner of such building or construction, acquires the title as well to such land plot necessary for use of building or construction, unless otherwise provided by the law. A person, when acquiring a title to a building or construction located at the land plot belonging to another person, acquires the right as well to use the respective part of such land plot necessary for use of building or construction on the same terms and to the same extent as prior owner did. An owner of building or construction located at the land plot belonging to another person has a preemptive right to buy or lease such land plot. Foreign individuals, apatrides, foreign legal entities – owners of buildings or constructions located at the land plot belonging to another person, have a preemptive right to buy or lease such land plot. However, the President of the Russian Federation can provide for the list of buildings and constructions that are not subject to the aforementioned rule. VIII. State duties/transfer taxes payable on the purchase of real estate − State duty: State duty is payable for state registration of title transfer in the amount of 22 000 Rubles for legal entities and 2000 Rubles – for individuals.
▪ sale of land plots and shares in land plots;
▪ sale of shares in charter capital of companies holding title to real estate. *** LML Alliance is an alliance of two leading Russian law firms, Maxima Legal and Lidings, who advise Russian and international companies in a variety of sectors on all legislative aspects of doing business in Russia and the CIS. Among our clients are market leaders, international investors, representatives of medium and large global businesses interested in entering the Russian and CIS markets and pursuing projects in the region. Over the years, both firms have assembled teams of dedicated and experienced professionals and have earned a reputation as reliable legal partners both in the domestic and i nternational markets. The firms’ cooperation has allowed us to operate fully in the markets of Moscow and St Petersburg simultaneously and to deepen our level of legal expertise; complementing our strengths and areas of practice, as well as significantly strengthening the teams of lawyers who are ready to support larger and more diverse assignments and projects. Through ongoing cooperation with leading national legal advisors and government authorities in all regions of Russia and the CIS, we have access to experts in any region of the country and are able to solve clients’ legal issues effectively regardless of project complexity and scope.
ILN Real Estate Group – Buying and Selling Real Estate Series
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