Property for Sale in Russia: Where Foreign Investors Look

What a foreigner may and may not own

Russian law draws the line at land and at strategic assets, not at buildings. A foreign individual or a foreign legal entity can hold title to apartments, houses, non-residential premises, offices, retail units and warehouses. Ownership of these objects does not depend on citizenship or on the country of the buyer.

The restrictions are specific and worth knowing before you shortlist anything:

• Agricultural land cannot be owned by a foreign person or a company with foreign participation. The permitted route is a lease, and the maximum term is 49 years.
• Land in border areas is closed to foreign ownership. Sochi, Anapa, Gelendzhik and Novorossiysk are the well-known examples; the perimeter is set by regulation, so check the specific plot, not the city.
• Acquiring shares or participation interests in Russian companies in strategic sectors requires government approval under Law 57-FZ. Buying the real estate asset directly is a different transaction from buying the company that owns it.
• Buyers resident in countries designated unfriendly face a special account regime and, for corporate transactions, approval requirements. This affects how money moves far more than what can be owned.
• Land category and permitted use are separate from ownership. A plot zoned for agriculture cannot simply be built on, regardless of who owns it.

Where property is actually for sale

The market is not one market. Pricing, counterparties, documentation and liquidity differ sharply between segments, and a foreign buyer's realistic entry point depends on which one is being considered.

New-build residential is the easiest segment to transact in: the seller is usually a developer, the documentation is standardised, and escrow structures are common under the shared construction framework. Secondary residential is more fragmented, with individual sellers and a wider range of title histories to verify.

Commercial property is where larger tickets sit. Offices, retail and warehouses are typically sold by companies rather than individuals, which means due diligence on the corporate seller, its debts and its encumbrances matters as much as the building. Moscow office vacancy stood at 7.6% in Q2 2026 (IBC Real Estate, 2026), which tells you the balance of power sits closer to tenants than landlords in that segment.

Industrial and logistics real estate in the regions is often tied to incentive regimes, which change the economics but also the obligations. Land plots for industrial use are frequently leased from municipal or state owners rather than bought outright.

A fourth route has grown: regulated investment platforms, of which 106 were licensed as of May 2026 (Bank of Russia, 2026). These allow exposure to real estate-linked assets without direct title, which removes the land ownership question entirely but introduces platform and counterparty risk that must be assessed separately.

The purchase sequence, in order

The order matters, and skipping a step is expensive to undo. A typical direct acquisition runs like this:

Ownership in Russia arises from state registration, not from signing or from payment. Until the entry appears in the register, you do not own the object, whatever the contract says.

• 1. Shortlist and check eligibility of the object and the plot, including land category, permitted use and any border-area restriction.
• 2. Order an extract from the state register (EGRN) on the object and on the seller. It shows the registered owner, encumbrances, mortgages, arrests and lease registrations.
• 3. Establish who the seller is: an individual, a Russian company, a municipality. If the seller is a company and you are buying shares rather than the asset, approval rules may apply.
• 4. Sign a preliminary agreement with a deposit. The deposit terms should state what happens if registration fails and who bears the cost.
• 5. Route the payment through a Russian bank. The bank's compliance function, not the seller, decides how long this takes.
• 6. Use a notary where the law requires it, for example with shared ownership, land shares or minors' interests.
• 7. Register the transfer with Rosreestr. In straightforward cases this takes days, not months, but incomplete documents reset the clock.
• 8. Obtain a fresh EGRN extract in your own name. Keep it. It is your proof of title.

Payment is the bottleneck, not the paperwork

Settlements have largely moved away from Western currencies. 86% of Russian exports were settled in rubles and friendly-country currencies in 2025 (Bank of Russia, 2025), and the same practical logic applies to real estate payments: the corridor your bank can actually use determines whether a deal closes.

For buyers from the Gulf, China, India, South-East Asia and the CIS, payment through a bank with a working correspondent relationship is usually a compliance exercise rather than a legal barrier. Expect source-of-funds documentation, beneficiary disclosure and, in some cases, a longer review than the property transaction itself.

For buyers resident in countries designated unfriendly, the mechanics are harder. A special account regime applies, conversions and transfers require bank approval, and the counterparty bank may simply decline the transaction. This is a compliance question with no shortcut, and independent compliance advice is the only sensible route.

75% of foreign direct investment now comes from friendly countries, against 25% previously (UNCTAD via Izvestia, 2025). That shift mirrors where real estate capital has been able to move, not where the assets are.

Taxes and holding costs

Tax treatment depends on who holds the asset, how it is used and where it sits, and the parameters change. The figures below are the current reference points, not a calculation.

The standard corporate profit tax is 25%, with 0-5% available in certain special regimes (Federal Tax Service, 2025). The standard VAT rate has been 22% since 1 January 2026 (Federal Tax Service, 2026); whether it applies to a given sale depends on the object, the seller and the structure, so it must be confirmed for the specific deal.

Beyond the headline rates, budget for the annual property tax set at regional level, land tax where a plot is owned, management and utility costs, and the cost of any lease obligations attached to the building. For an individual owner, personal income tax applies on disposal, and the residency status of the seller affects the rate.

Rates, thresholds and reliefs change, sometimes annually. Verify the current position with a tax adviser before modelling a deal.

Regions and incentive regimes worth understanding

Location decisions in Russia are increasingly driven by incentive regimes rather than by classic yield comparisons. Several frameworks change the cost base for an industrial or commercial buyer.

The Free Port of Vladivostok had 2,130 registered projects as of 2026 (KRDV, 2026), and the Arctic Zone reached 1,000 residents with ₽1.1 trillion declared (KRDV, December 2025). Special administrative regions hosted 674 companies as of 2025 (Ministry of Economic Development, 2025), and 90 special investment contracts covering more than ₽2 trillion of investment were in force (Government of Russia, 2025). These are business-investment instruments, and each carries its own obligations and deadlines.

Financing costs set the ceiling on what a deal can return. The Bank of Russia key rate stood at 14% in September 2026 (Bank of Russia, 2026), which raises the hurdle for any leveraged acquisition and pushes cash buyers into a stronger position.

Moscow remains the deepest and most liquid office and retail market, but depth also means competition and professional counterparties. Regional industrial and logistics assets often offer a lower entry ticket with thinner liquidity on exit.

The mistakes that cost foreign buyers most

Most losses in Russian real estate come from diligence that was skipped, not from market movement.

Title history is the first exposure. A chain of owners that includes a privatisation, an inheritance or a court-ordered transfer deserves extra scrutiny. The second is the physical object: unregistered redevelopment is common, and regularising it after purchase is expensive.

Zoning and permitted use are the third. A building that is used as a warehouse but registered as something else creates problems with tenants, insurers and lenders. The fourth is the corporate wrapper: buying a company to get its building means buying its liabilities, its tax history and its litigation.

Finally, financing and exit. Liquidity varies widely by segment and city, and a well-bought asset in a thin market can still take a long time to sell. Plan the exit before the entry.

This article is general information about how the market works. It is not investment or legal advice, and no deal should be structured without independent legal, tax and compliance advice in Russia.

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