Purchase Property in Russia: Guide for Foreign Buyers

What a foreigner may and may not own

Ownership of buildings is the open part of the market. Apartments, individual houses, offices, warehouses and industrial buildings can be held outright by a foreign individual or a foreign legal entity. There is no citizenship test applied at the moment of registering title in the buyer's name, which is why foreign buyers are concentrated in residential and commercial property rather than in land.

Land is where the restrictions bite. Foreign citizens, foreign legal entities and stateless persons cannot own agricultural land. The permitted route is a lease, which can run up to 49 years. Land in designated border territories is closed to foreign ownership altogether; Sochi, Anapa, Gelendzhik and Novorossiysk are among the areas affected, and the full perimeter is wider than most buyers assume. Before paying a deposit on any plot, have a local lawyer confirm the specific cadastral parcel is not inside a restricted zone.

Separately, acquisitions that touch a strategic sector require prior government approval under Law 57-FZ. Real estate can fall inside this perimeter when the asset sits with an operating facility in a covered industry, so the test is applied to what the property is used for, not only to what it is.

• Open to foreign ownership: apartments, houses, commercial and industrial buildings
• Closed to foreign ownership: agricultural land (lease up to 49 years is the alternative)
• Closed to foreign land ownership: designated border areas, including Sochi, Anapa, Gelendzhik and Novorossiysk
• Requires prior approval: assets connected to strategic sectors under Law 57-FZ

The order of steps in a purchase

The sequence matters more than the paperwork, because each step produces the document the next one depends on. Buyers who reverse the order, paying first and documenting later, are the ones who end up in disputes.

Title in Russia transfers on the date of state registration, not on the date of contract signature and not on the date of payment. Until Rosreestr records the transfer, the buyer holds a contractual claim, not ownership.

• 1. Identify the object and confirm the seller's identity and authority, including corporate approvals or a valid power of attorney
• 2. Order an extract from the state register (EGRN) covering the object: registered owner, encumbrances, arrests, lease rights, cadastral data
• 3. Confirm the legal regime of the land under the building, particularly if the parcel is agricultural or near a border area
• 4. Choose the structure: buying the asset itself, or buying the company that holds it. The second carries the target's historical liabilities with it
• 5. Sign the contract. Notarisation is required in defined cases, such as shared ownership and transactions involving minors
• 6. Settle payment through a documented banking channel, keeping the payment trail aligned with the contract
• 7. File for state registration with Rosreestr. Ownership arises on the registration date
• 8. Obtain a fresh EGRN extract confirming the buyer as registered owner

Payment, banking and compliance

This is where foreign purchases most often stall, and it is a compliance question rather than a real estate question. Buyers from countries designated as unfriendly face special account regimes and, in defined cases, government approval requirements before a transaction can complete. Sellers from those jurisdictions sit under comparable constraints, which means both sides of a deal can be waiting on permissions at the same time.

The practical consequence is that payment timelines are not set by the buyer's bank alone. Funds may need to move through accounts with restricted operating conditions, and the releasing bank will ask for the underlying contract, the source of funds and the corporate chain behind the buyer. Build the file before signing, not after.

Ruble settlement is not an exotic route. 86% of Russian exports are settled in rubles and friendly-country currencies (Bank of Russia, 2025), and 88% of retail payments inside the country are cashless (Bank of Russia, 2025). For a buyer from a friendly jurisdiction, ordinary bank transfer in rubles is the normal mechanism.

Take independent compliance advice in your own jurisdiction before committing funds. This is not a step to delegate to the seller's lawyer, and it is not something a property agency can substitute for.

• Restricted-jurisdiction buyers: expect special account regimes and possibly government approval
• Prepare source-of-funds evidence, corporate structure charts and the signed contract before the first transfer
• For friendly-country buyers, ruble settlement through ordinary banking channels is the standard route
• Get compliance advice from counsel acting for you, not for the counterparty

Taxes and running costs

Corporate profit tax stands at 25%, with 0-5% available inside special regimes (Federal Tax Service, 2025). The standard VAT rate is 22% from 1 January 2026 (Federal Tax Service, 2026), which matters directly when buying commercial property from a VAT-paying seller and when letting space.

Individual owners pay property tax assessed on cadastral value, with rates and deductions set at municipal level and revised periodically. Those rates change and must be verified for the specific object and region before you model net income.

Residency drives the personal income tax outcome on a later sale. An owner who is not tax resident in Russia is treated differently from a resident, and the residency thresholds themselves have been amended more than once. Confirm the current rules, and the applicable double tax treaty between Russia and your country of residence, with a tax adviser rather than relying on figures circulating in forums.

Running costs to budget for: property tax, land tax where the parcel is owned, building maintenance and management charges, insurance, and the cost of a local representative if you are not resident.

• Corporate profit tax: 25%; 0-5% within special regimes (FTS, 2025)
• Standard VAT: 22% since 1 January 2026 (FTS, 2026)
• Individual property tax: cadastral value basis, municipal rates, subject to change
• Sale proceeds: tax treatment depends on residency status and the applicable double tax treaty

Holding through a company or a special regime

Holding Russian real estate through a Russian legal entity is common for foreign investors because it separates the asset from the individual and simplifies later partial exits. The trade-off is that corporate ownership brings reporting, transfer pricing attention and exit mechanics that a private individual never faces.

For larger or industrial projects, special investment contracts provide a defined framework for long-term commitments. 90 such contracts have been signed, covering more than ₽2T of declared investment (Government of Russia, 2025). Special administrative regions are a separate instrument, used mainly for redomiciling foreign companies into Russia; 674 companies are registered there (Ministry of Economic Development, 2025).

Pooled real estate vehicles remain a smaller part of the market than in Western Europe. Stock market capitalisation is 19.5% of GDP against a target of 66% by 2030 (Bank of Russia, August 2026), and 106 licensed investment platforms operate in the regulated perimeter (Bank of Russia, May 2026). Some of those platforms list asset-backed instruments, but availability to non-resident buyers depends on the platform's own rules, which change. Verify with the platform and your broker before assuming access.

• Russian legal entity: standard holding structure, adds corporate reporting and exit planning
• Special investment contracts: 90 signed, over ₽2T declared (Government of Russia, 2025)
• Special administrative regions: 674 companies registered (Ministry of Economic Development, 2025)
• Regulated investment platforms: 106 licensed (Bank of Russia, May 2026); non-resident access varies by platform

Due diligence and where deals fail

Most failed foreign purchases do not fail on the property. They fail on the seller, the land regime or the money.

The seller side: confirm that the signatory actually has authority, that corporate resolutions are valid, and that the entity is not in the middle of a reorganisation or insolvency process. A power of attorney can be revoked, and revocation does not always reach the buyer before the money leaves.

The asset side: read the EGRN extract rather than the seller's summary of it. Look for encumbrances, registered lease rights that survive the sale, arrests, and cadastral disputes with neighbours or the municipality. For new-build residential purchases, use the statutory escrow mechanism for shared construction rather than paying the developer directly.

The money side: match the payment currency, route and timing to what the banks involved will actually accept. A contract that requires a transfer your bank cannot execute is not a contract, it is a delay.

End with the obvious point that is easiest to skip: use a lawyer licensed in Russia for the property work, and a lawyer in your own country for the compliance and tax work. The two are not interchangeable.

• Read the EGRN extract yourself; look for encumbrances, lease rights and arrests
• Verify the seller's authority and corporate standing on the day of signing, not a month earlier
• For new builds, use the statutory escrow route for shared construction
• Align payment route with what the banks will accept before fixing deadlines in the contract
• Retain Russian property counsel and home-country compliance counsel separately

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