The quality of information in a Russian real estate database or private advertisement is more questionable than in the west. It’s possible that an agent may publicly list on apartment based on the information of a single phone call from a seller and without any verification.
Properties are rarely ready for fast transactions owing to some of the following factors:
- The necessary documents for the title are unready or unprepared
- There may be unresolved legal problems associated with the property
- Inherent complexities in the transaction (see section below on communal apartments)

To look at it another way, there are around 500 registered real estate agencies, close to 100 building companies that have their own sales divisions and a large number of freelance middlemen involved in the St. Petersburg market. Each of these agencies has its own base of properties for sale. This arrangement tends to put the sellers interests ahead of the buyers due to the commission arrangements.

It is often the case that more than one agency will be involved in any transaction. The seller will have an agent, the buyer will have an agent, and if the seller requires not only cash but another property as well that there will be a third agent representing the needs of that owner as well.

Russian real estate agencies lack standardization. Each agency has its own set of rules and service agreements requiring signatures from buyers and sellers. English is not the language of negotiations or contracts and getting help with the language barrier is another hurdle.

Commissions are rarely divided between the agencies representing the seller and the buyer. Russian citizens have some additional rights such as a “local residency registration" or propiska. This means that a person may have the right to occupy a property without actually owning it.

St. Petersburg has many communal apartments and the owners and/or occupants have special rights to their rooms. Communal apartments carry additional complications. Click here for a more in depth analysis.

Russia lacks a well-developed mortgage system. This is complicated by the fact that the owner or seller cannot move into another apartment until the current apartment is sold. This is the situation for 80% of real estate transactions. This means that each transaction really means two transactions, as the seller will simultaneously be a buyer, and two titles will usually switch hands. This is referred to as a vstrechnaya pokupka (purchase where 2 ends meet). In the purchase of a communal apartment, it can be more complicated as all or most of the owners generally need other property in order to agree to move out of their current apartment. This can be a very complex transaction and is called a rasselenie (a move out).

Absolutely, the real estate market is fully open to foreigners, and foreign owners enjoy the same legal rights as natives.

• Location (proximity to monuments or historically- significant buildings, proximity to the metro, near parks, rivers or canal embankments, nearness to shopping centers or schools)
  
  
• Condition of the building (pre-revolutionary building – with or without capital renovation – see section on capital renovation, reconstructed building, quality and beauty of construction materials, the year the building was built or last renovated, general condition of the building’s infrastructure: attic, cellar, pipes, electric system etc.)
  
  
• Condition of entrances and stairwells and quality of courtyard if there is one
  
  
• View and noise factor
  
  
• Layout of the apartment. It is better when windows face out two sides of the building, for example. The type of bathroom (with or without bathtub, combined or separate) and the heights of the ceilings are also important.
  
  
• Floor: ground and top are generally cheapest unless the ground floor can be commercialized, in which case it will be more expensive
  
  
• Condition and renovation level of the apartment
  
  
• Security and safety, parking availability
  
  
• Time constraints on the purchase (in Russia this usually means longer rather than shorter)
  
  
• Level of legal transparency
  
  

Naturally, the price increases with the number of positive attributes. See also our Russian Real Estate Purchase Guide.

Every apartment has legal documents and the condition of the apartment must be verified against these documents.
Check the owner’s property rights; also check the owners and the apartment’s histories.

Check to see if there are children registered at the apartment, there may be special issues regarding moving children out, and this can be a complex process due to the strict social laws in Russia.

Check the tenant's local registration rights to the apartment’s propiska.

If the owner is married verify spousal approval.
The above is a general though by no means exhaustive list.

Communal apartments are a remnant of Soviet system. These are generally huge multi-room apartments that many families would share, each owning their own room and sharing the amenities communally. If there are un-privatized rooms, each family (individual or individuals) may in the given room (or rooms) on the basis of an order or decision from the local or city authorities. The rest of the family is considered to be renters or co-renters.

The State recognizes both owners and renters. If the rooms are later privatized, issues arise affecting the remaining portion of the living space, including the possibility of appropriation by the State. Non-living space areas, corridors, cupboards, bathrooms, etc. are legally for general use and can’t be owned by an individual.

Tenants within a communal have the right to purchase and sell rooms to other tenants. Sale of a room requires a written notice from all of the other tenants (except for the State) that none of them also seeks to purchase the room. Individual rooms may not be rented out without express permission of all other tenants.

Typically one family will own the whole living space or live there based on a social contract (which in turn is based on a state order). Regular apartments can be converted to communal apartments by an order of the court or mutual agreement of all owners.

Transforming a communal apartment into a regular one generally requires the purchase of all the rooms from their individual owners in a step by step fashion. The buyer buys a replacement property for each family and then trades these properties for the rooms in the apartment. This can be a dangerous process and usually takes four to eight months, although if the owners start playing games it can last much, much longer. Not to say that these don’t make great investments, they just require patience and planning.

The Law on Privatization was approved after the collapse of the Soviet Union in 1991 and granted a wide variety or property rights. Because of this law citizens of Russia were allowed to change their living quarters into private property. Prior to this legislation, people were living by a social rental contract which registered the individual to a location through the use of a propiska (registration).

Entire apartments or individual rooms of a communal apartment can be privatized. The process of privatization is carried out by the regional agency for privatization and is currently free of charge. Beware: there is a law under draft right now that may put an end to this free registration. The only thing that requires payment is the corresponding organizations that carry out the technical work of preparing the agreements and technical specifications of the apartment, as well as State registration of the apartment, etc.

In the Russian Federation a living space may be privatized only once by an adult and twice by children (once as a child and once as an adult). Russian citizens have the right to refuse to privatize and continue living on the old social rental contract model. In the event that an adult with children wishes to privatize, they must first receive permission from the local municipal education committee, and the child welfare agency Opeki. Newly built apartments may only be privatized after the completion of the entire buildings construction.

The process is quite simple as long as you can do it in person. Opening an account from outside Russia is extremely challenging. Opening an account requires the following:

Passport
Russian visa
Russian immigration card (given to you when you enter the country)
Minimum deposit (For example, Raiffeisen Bank, an Austrian bank that has branches in St. Petersburg and Moscow, requires a minimum deposit of $500. Many of our clients have accounts with this bank. If you would like more information about opening an account with them, Raiffeisen Bank's phone number in St. Petersburg is (+7812) 718-6811)

Foreigners have no limit on bank transfers into or out of Russia. This is a nice change from the past system,which was complicated. Legislation involving hard currency is always changing so it is very difficult to say what the exact situation is.

These are the general steps, but there may be more if the deal is complex.

First, sign the contract with real estate agent and make a deposit for purchase.

Then, the agency will make a down payment to secure the property. This will occur only after the legal papers associated with the property have been negotiated and inspected. If this inspection fails then the buyer receives his money back in full.

Then the exact date of the transaction is fixed. The buyer must be prepared to have the amount ready in cash by that time. Around 95% of all transactions are done with cash in Russia. Usually the cash is placed in a bank safe on the day of the transaction. The bank only allows the buyer, seller, or their representatives access. This provides security to make sure everyone plays fair. This safe is analogous to the escrow account used in Western real estate transactions. The bank and the agent representing the buyer ensure that funds aren’t moved until all requirements have been fulfilled.

The buyer, seller, and the bank make a contract that governs the control of the safe. The buyer doesn’t lose control of his money until the property is registered with the state under new ownership. The buyer and seller usually split the bank fee (up to $60).

The primary purchase contract is then signed and notarized by both parties and sent to the State registry. The notary fee (1.5% of the contract cost) is usually paid by the buyer. The buyer always pays the State registry fee (about $20). It is possible to sign the contract without a notary but it is strongly recommended that all agreements are notarized.

The buyer and seller can agree to an arbitrary price (for example the property's book value or any other price that the parties agree upon) if the seller wants to avoid paying a large sales tax or if the buyer wants to reduce the notary fee, however this price must not be less then inventory one (book value).

Real (market) price - $80,000
Inventory cost (book value) - 450,000 rubles (~$15,000)
Contract cost using market price - $80,000
Notary fee using market price - $1200
or
Contract cost using book value - $15.000
Notary fee using book value- $225

The seller usually receives his money from the bank according to the following schedule:

50% - after receipt of the new, State registry certificate
40% - after the cancellation of every tenants' registration (propiska)
10% - after the apartment handover act has been signed

• Passport and visa
• A Russian notarized translation of your passport
• A notarized permission slip from the buyer's spouse, notarized with apostil if this permission was notarized outside of Russia
• The notarized Russian translation of this document and notarized translation of the spouse's passport
• Marriage license and a notarized Russian translation
• If the buyer doesn’t speak Russian they will have to hire a specially-certified translator as well.

• State Registration Bureau of Property Rights (GBR) registers the transaction and the title rights.
• Regional Project-Inventory Bureau (PIB) prepares the technical passport for the apartment and also renovation plans.
• Passport-Visa Services provides registration/de-registration for citizens residing in the property.
• Regional Interdepartmental Commission (MVK) reviews and provides approvals for renovation work in apartments (especially when walls need to be taken down or moved).
• Department of Municipal Education, the guardian of children's welfare and rights.
• Committee for City Construction and Architecture (KGA) controls issues relating to new construction.
• Committee for State Inventory and Protection of Monuments (KGIOP) controls transactions associated with historical landmarks.
• Regional Committee for Land Resources (KZR) prepares the necessary documents for transactions with land plots.

The annual tax on a property is usually small; between $100 and $200. The utility payments are between $50 and $100 a month for a medium-sized apartment and there is the additional charge of about $20 for electricity. The phone number is $5 a month.

This depends on how long you live in Russia. If you live in Russia for 182 days or more, then you are considered a Russian resident, and pay the Russian income tax rate of 13% on rental income. If you live in Russia for less than 182 days then you pay a non residential income tax of 30% on rental income.

If you have owned it for more than five years then you don’t have to pay any tax at all on the sale. If you are not a resident and have owned the property less than five years then you have to pay 30% of the sale minus a deduction of one million rubles, or you have to pay 30% of the capital gain (original purchase price subtracted from final sales price). You can choose one or the other but not both (you can’t deduct a million rubles against the capital gain).

Russian residency requires living in Russia for 182 or more days per year. If you are a Russian resident and have lived in Russia less than five years then you have to pay 13% of the purchase minus two million rubles.

Property management is one of our services and for around 10% of the monthly rent, we can manage and look after your property while you are away. Please contact us to learn more.

Dvor translates into English as “courtyard”. Typical building plans in St. Petersburg involve a façade (part of building facing the street), and a courtyard. The courtyard is usually larger than the façade part. Courtyards come in all shapes and sizes from beautiful little parks to kolodets (wells). The “wells” are the dark and gloomy interior yards that are typically avoided; no one wants to live in a well.

A capital renovation is an overhaul of a building from the structural components to the utility and communication lines. The renovation is state funded and is generally done very infrequently. There are many old buildings in St. Petersburg’s city center that have not gone through this. What this means is that the buildings are filled with inconveniences such as poor water pressure or electricity. Any potential buyer should be wary of investing in one of these properties because outside of the poor quality of life, if the authorities decide that the building is due for a capital renovation the tenants are forced out and the building is renovated. The process can last years.

Give careful attention to the process that has been outlined above and ask us every question you can think of.

Before you look at an apartment, make sure that you know exactly what you want and what you are willing to pay, then we will help you find the best match.

Fill out an inquiry form stating exactly what you are interested in and we will send you a list of “best fit” properties

Personally involve yourself, come to Petersburg and look around. Get a feel for the city and the market before committing anything.

In the event that you know what you want and you know the city well, but lack time, we can furnish you with photos, floor plans, detailed descriptions and first hand accounts of properties. This service does require a small prepayment fee that will be used towards our agency fee in the event of a purchase. Once an apartment is chosen, our agency can thoroughly research the apartment and give an assessment of whether or not it is worth the purchase.

In the event of a positive conclusion and with your agreement, we can start preparing the paperwork and documents necessary to complete the transaction.

Apartments tend to fall into three categories:

Small: 25 - 70 sq. meters (one to three rooms)
Medium: 70 - 120 sq. meters (two to six rooms)
Large: over 120 sq. meters (three and more rooms)

Small and medium flats are typically found in pre-revolutionary buildings. These flats are usually the result of breaking up a large apartment into several individual parts. These buildings almost always have two entrances: a front and a servants’ or black entrance. The black entrance is usually located near the kitchen and usually leads out to the courtyard (dvor). Capital renovations that took place between 1948 and 1991 also employed this strategy of splitting large apartments into smaller units. Apartments in this category make up the majority of the apartments in the center.

The large flats generally have two entrances as described above and may be communal. A lot of the larger apartments have not been renovated which is not necessarily bad as the original fireplaces, and stoves are often intact. These can be beautiful and really incredible after a renovation, though the initial appearance can be quite awful.

The time frame is heavily dependent on the transaction’s complexity. The simplest direct sales can be concluded in two weeks. In the event that the seller requires another apartment it can take up to four weeks and in the case of a communal as long as eight months.

Units in buildings under construction are by law not considered private property. Instead the buyer is viewed as an investor in the construction project itself. In this case the paperwork is focused on an investment agreement. The ownership right occurs when the units are registered with the state, and the process can take several months. This process has several stages: completion of construction, transfer of building documents to GBR (the State Registration Bureau), and concluding with individual apartment owners filing for registrations. Buying into a building is financially smarter than buying an apartment, but carries more risk. New buildings have good qualities and apartment designs, and you are guaranteed wealthier neighbors, which can be a benefit.

St. Petersburg has a few good real estate agencies that specialize in assisting foreigners negotiate the real estate market. One that we know well is City Realty. City Realty is an experienced firm that can manage any request regardless of budget or location. City Realty also has the largest real estate database of rental properties in city.

Want to find out more? See also our Russian Real Estate Purchase Guide and other sections in our Accommodation Guide..