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Throughout all human existence real estate has been, is and will be one of the most attractive investment tools. This rule is efficient in all countries in the world and Russia isn’t the exclusion. Purchasing realty it is very important to rightly understand and estimate future expenses. And may be more important to know how economic changes would reflect to the price of realty. Our article is about this.
Estate tax depends on who the owner is – legal entity or person.
There are own taxes for persons. They depend on property’s region and the cost. There are some tax deductions for several categories of the citizens. The average tax is about from 0.2% to 0.5% from the property’s value for living property and from 1 to 2,2% for the commercial property.
Ahead of the bargain it is important to check this nuance out. Sometimes it is more profitable to rent than buy. But in general it is the opposite.
It is not a secret you have to pay for communal services for maintaining the realty. Unlike major of European countries the CS in Russia is not very expensive. It is depends on the realty square and meter reading. There are different CS in each Russian region. For example, for the persons in Moscow there are:
| Services | Cost (euros, for Moscow), monthly | 50 s.m. for example (euro) |
|---|---|---|
| Heating | 26 per m3 | 25 |
| Cold water | 0.58 per m3 | 8 |
| Hot water | 3 per m3 | 17 |
| Gas | 0.1 per m3 | 3 |
| Electricity | 0.9 per kh | 20 |
| Garbage disposal and other | - | 17 |
| Total | App. 100 euros (7000 rubles) | |
If you look at the price changing over the last 5 years (since 2015) now is very interesting time to invest in Russian property. The property has always grown in price and reached the top in 2011-2014 period (depending on the type of the property). Since the sanctions against Russia and Ukrainian crisis beginning the price fell rapidly. But the falling ended in 2018 and the price stabilized. Now the price is more than underrated for buying. And we think it is time to go ahead. Mostly unlikely the price will go down in the future.
Resulting all the expenses we have approximately 1.2 euros per s.m. a month for communal services for living property and 1.5 for commercial one, and from 0.2% to 0.5% from the living property cost tax yearly and from 1,5 to 2,2% tax from commercial one. Besides if you buy all the building you have to maintain it by ordering some additional services for this sake. Including such as roof cleaning and repairing, cleaning the adjacent territory and so on.
It is obviously realty in Russia isn’t expensive but has some of perspective issues each investor should know. Market economy in Russia is developing constantly and economic potential is growing up. Having huge amount of oil, gas, wood and other nature materials gives good advantage to Russia over many other countries. We are sure Russian realty hasn’t rid the potential for growing further and will accelerate especially after 2024 year when the presence power will be changed. Corruption level is always going down and Internet integration in state services only prove this thesis.
Addiction to nature resource is going down as well. The number of entrepreneurs is always growing up from year to year. Business is turning big and becoming less vulnerable and demand for immovable is more strong.
Our company would be glad to assist all companies or persons who wish to buy, sell, rent or make other bargains with property in any Russian region. Call us or send us a mail and we will discuss your issues as soon as possible.
