Obtaining citizenship when buying a real estate in Russia is impossible. However, the ownership of a house or an apartment can be an added advantage when considering citizenship or residence permit.
Every year more people get Russian citizenship. For the first quarter of 2020 alone, more than 161 thousand people became Russian citizens. This is 2.5 times more compared to the same period last year. Nearly half a million people received a Russian passport in 2019, for comparison, this number was 269.4 thousand people in 2018.
Buying real estate in Russia. The rights of foreigners
According to Russian law, foreign citizens of the country have the right to acquire, own, and dispose of real estate (houses, apartments, and land) for commercial and personal purposes. Foreigners can also purchase real estate on a loan at Russian banks.
Moreover, for foreigners, there are restrictions on the purchase of land in certain regions. “These include land in the border areas, seaports, and agriculture; forest lands, reserves; a territory of defense facilities. Also, a foreign citizen will not be able to buy real estate in cities where a special regime has been established (closed city).
According to experts, most often foreign citizens buy real estate in Moscow and the Moscow region, St. Petersburg and the Leningrad region, as well as in Sochi. Among buyers, the most common are citizens of Belarus, Kazakhstan, Ukraine, Uzbekistan. Citizens of the European countries, the USA and Great Britain often buy luxury real estate in the capital, as well as apartments in the old fund of St. Petersburg.
To buy real estate in Russia, a residence permit is not required. It gives the right to reside permanently in the country, and real estate can be for living for a while or for renting business.
After buying real estate in Russia, a foreign citizen must register with the tax. The taxes and fees for the transaction itself, as well as real estate tax for the property, are the same as for Russian citizens: from 0.1% to 2% depending on the region and cadastral property value.
However, when selling a property, a foreign citizen will pay personal income tax in the amount of 30% of the total sale price without reducing the purchase expense or tax deduction.
What benefits of buying real estate in Russia brings to a foreigner
Buying real estate in Russia does not give a foreigner the right to obtain Russian citizenship or a residence permit. Being a citizen of the CIS countries doesn’t provide any benefits for the purchase of a real estate in Russia.
At the same time, the ownership of Russian property can simplify the confirmation of the quota for temporary residence. Now the law provides that quota confirmation is not required for the person who made the investment in Russia. In the development of this provision, the possibility of recording the funds spent on the purchase of real estate as an investment may be included.
Also in May 2020, the Ministry of Economic Development (MED) prepared a bill, the adoption of which will allow obtaining a residence permit in Russia for foreign entrepreneurs who will acquire real estate in the country. It is assumed that it will increase the investment attractiveness of the Russian economy.
In addition, in June, the State Duma adopted a law that would allow obtaining Russian citizenship in a simplified manner to all foreigners whose children already have Russian passports and have reached the age of 18. Currently, this rule applies only to disabled parents of adult children.
A temporary residence permit (RVP) is a document that allows a foreigner to live and work in Russia for three years. Living on the basis of RVP – in most cases, this is the first stage in obtaining Russian citizenship. Each year, the Russian government sets a certain number of quotas for RVP.