Foreigners can own Russian real estate with few restrictions. The complications come afterwards: an annual tax that arrives whether the property earns or not, rental income taxed differently depending on your residency, a sale where timing is worth more than negotiation, and proceeds that have to find a route out of the country.
The same building produces different obligations depending on whose name is on it. The choice is usually made for commercial reasons and then lived with for years, so it is worth understanding what each one costs before it is fixed.
An apartment for your family, a flat you let out, property you inherited or bought years ago.
An office, warehouse or retail space held by a Russian entity or directly by a foreign one.
Checking what can actually be bought — territorial restrictions catch more buyers than personal ones do — and structuring the purchase before the money moves.
Annual property tax on cadastral value, arriving whether the property earns anything or not. Assessed locally, and higher than most owners expect on commercial space.
Rental income, taxed at different rates depending on residency and on whether you hold personally or through a structure. The gap between options is often large enough to change the decision.
Where timing does the heavy lifting: past the minimum holding period the gain can be exempt entirely — and since 2019 that applies to non-residents too.
Proceeds land in a Russian account first. Moving them abroad runs into currency control and, for owners from unfriendly jurisdictions, authorisation limits.
Sell residential property you have owned beyond the minimum holding period — five years, or three in defined cases — and the gain is exempt from Russian tax. Since 1 January 2019 that exemption applies regardless of tax residency, on the same terms for a non-resident as for a resident.
A great many foreign owners still believe they face 30% on the full sale price because they live abroad. On a long-held apartment that belief is expensive in the wrong direction: it delays sales that could have completed tax-free, or prompts elaborate planning to re-establish residency that was never needed.
Federal Law 424-FZ of 27.11.2018 · Art. 217(17.1) and Art. 217.1 of the Tax Code
Sell inside the minimum period and the difference is stark: a non-resident pays 30% on the gross proceeds with no deduction for the purchase price, while a resident pays on the gain after deducting what they paid. On an early sale that gap is usually worth more than the cost of taking advice first.
Checking the property can lawfully be sold to a foreign owner, choosing between personal and corporate ownership, and modelling what each will cost to hold.
Property tax, rental income reporting, and the annual filings — handled on a fixed fee so the obligations do not arrive as a surprise.
Working out whether the holding period exempts you, what a sale inside it would cost, and mapping the route for proceeds before you agree terms.
For most residential property, yes — the process is largely the same as for a Russian citizen, and there is no requirement to hold a residence permit. The restrictions that do exist are territorial rather than personal: agricultural land, and property in designated border areas, are closed to foreign ownership. Those areas are wider than most buyers expect, which is worth checking before money moves rather than after.
It changes the rate while you hold and let the property, and it changes the arithmetic if you sell early. What it no longer changes — since 2019 — is the exemption for long-held property: a non-resident who has owned residential property beyond the minimum period sells free of Russian tax, on the same terms as a resident. That single point is worth more than everything else on this page to anyone holding an apartment they bought years ago.
Corporate ownership brings a different set of taxes — property tax on the asset, VAT considerations on the purchase and on any subsequent sale, and profit tax on rental income after deductible expenses. It also raises the question of whether owning Russian real estate creates a permanent establishment for a foreign company that has otherwise stayed out of the Russian tax net. That question is worth answering before signing, not after.
Proceeds go into a Russian account first, and moving them abroad runs into currency control and, for owners from countries designated unfriendly, Central Bank authorisation limits. It is a solvable problem and we solve it regularly, but it is the part of the transaction most likely to take longer than the sale itself. Plan the route out before you agree the sale, not after completion.
Property tax, calculated on cadastral value at rates set locally within Tax Code limits — typically modest for residential property, materially higher for commercial premises and for high-value objects. It is assessed annually and payable whether or not the property earns anything. If you let the property, rental income is taxable on top of that.
Russia has no inheritance tax as such, but the position is not neutral: you take on the annual property tax from the moment of ownership, the minimum holding period for a future sale is counted from a specific date that depends on how the property came to you, and there may be reporting duties in your own country. Getting the acquisition date right matters more than it sounds — it decides when a sale becomes tax-free.
Tell us what you hold, how you hold it and where you are tax resident. You will get back what it costs to keep and what a sale would actually look like.
ex-Big Four team · Moscow · since 2018 · © TaxWell & Partners
Practical support for international business in Russia.