According to the legislation of Azerbaijan there is no difference in the rights of foreigners and local citizens in the field of buying a real estate. The foreign citizen, as well as the citizen of Azerbaijan can buy any property, except the land, i.e. can buy an apartment, a house, but do not a land plot. According to the Azerbaijani legislation, the rights to purchase the land plot have only the citizens of Azerbaijan.
Marital status of a foreigner has no legal meaning and legal implications for conclusion of purchase and sale agreement of the apartments.
If a foreigner married to a citizen of Azerbaijan and the family buys the land, the registration will be on the name of the citizen of Azerbaijan. However, according to the Family Code of AR, all the property acquired during the marriage is a common property, that is, the husband — foreigner will be entitled for half of the land. About the disposal by husband — foreigner of its share of land, it should be noted that in this case the land will be returned to the Republic of Azerbaijan. First of all alienation of land is possible only with the written consent of the wife, except in case of writing a will by husband; and also, in accordance with Art. 49 of the Land Code, the right of private property, transferred to foreign legal entities and individuals as a result of transactions on inheritance, gift and mortgage of land is alienated within one year in accordance with the legislation of the Republic of Azerbaijan. In case of inalienation the right on private ownership of land plot by the foreign legal entities and individuals, then, in accordance with the legislation, the relevant executive authority or municipality compulsorily purchases the land plot in the manner provided by the Land Code.
A brief overview of the real estate market in the country.
In a country you can find real estate for any price, of course in the capital real estate prices more expensive, and has a value of location (as far as elite area), Condition of real estate, etc. Unfortunately, there are no official statistics on real estate prices, depending on the location of the real estate (you can see the changes in prices for residential premises as a percentage on the official website of the State Statistics Committee of Azerbaijan http://www.stat.gov.az) However, based on data from independent organizations on the evaluation and real estate should be noted that the residential buildings in Sabail district are more expensive compared to Nizami and Surakhani district of Baku city.
The buying process how to find a property — the role of an estate agent.
Of course you can use the services of a realtor or real estate agent services, and you can search for properties through the sites, where property owners place ads themselves.
There are a real estate agency in each district of Baku where you will be offered to sign an agency agreement under which describes the rights and duties of an agent in respect of the buyer; real estate agent commissions are typically 2-4% of the property value. Or a foreign buyer may enter into a shared agreement, which will contain the terms of the contract for purchase and sale and the agency contract, but this type of contract should be drawn up by a professional lawyer.
Purchase and Sale Agreement.
The contract of purchase and sale of real estate is desirable to notarize in order to minimize the likelihood of fraud. Because to sell the real estate through a notarized contract of sale the owner shall has a document confirming his right of ownership of the property (the bill of sale); as at the moment in our country there are many new buildings, but unfortunately, many owners of such properties still do not have a document confirming the ownership of the property and in the case of buying such a property, you can not execute the contract of sale by a notary and may be the subject of fraud.
Purchase and Sale Agreement, the form of which is offered in a notary’s office generally does not contain the terms and conditions governing the rights and obligations of a real estate agent. Contracts may be drawn up in two languages: English and Azerbaijani, but due to the fact that the contract is notarized; it must be translated into Azerbaijani. The main terms of the contract of sale is subject of the contract, the price of the contract, the rights and responsibilities of the parties. The seller’s obligations include the obligation to book out together with the members of the family from the selling flat. The obligation to pay the state duty may be imposed to one of the parties by mutual consent, but usually this responsibility rests with the buyer.
Necessary documents and the State Fee.
When making a purchase and sale transaction by a notary the parties should have documents to prove their identity (passport, identity card or the temporary registration), and a document confirming the ownership of the property they are selling, i.e., the bill of sale. Also required: a statement of the persons living in the apartment, a written notarized consent to sell the apartment of all persons living (ie, registered members of the family) with the owner. A foreigner in concluding a deal of purchase and sale by a notary must necessarily have a temporary registration in the territory of Azerbaijan, i.e. located in the territory of Azerbaijan on legal grounds. The state duty for registration of the contract of purchase and sale of real estate by a notary in the city of Baku is 200 AZN (about 254 USD), and in regions of the country is 80 AZN (about 102 USD). It is also necessary to carry out compulsory state insurance (cost 50 AZN – about 64 USD per year), many notaries’ offices have an insurance agent.The payment of the state duty and the cost of the real estate you should make by bank transfer. Paying in cash value of the real estate and state fee is not permitted.
Depending on the area of the apartment the fee should be paid for technical certificate and bill of sale, the minimum is 80 AZN (about 102 USD). Dates of issue of documents (10-20 days), certifying ownership will depend on the owner who submitted the documents. To obtain documents in a short period of time is necessary to pay additionally.
In accordance with the tax legislation the person (and foreigner), acquiring a dwelling (house, apartment or a room in a communal apartment) does not pay any tax. However, if the foreigner in the result of conclusion the agreement for purchase and sale of real estate becomes the owner of the building, non-residential premises, then he must pay a property tax (see Taxes in Azerbaijan).
In accordance with the civil legislation of AR the person becomes the owner of the property only after the registration of ownership rights in the relevant state authority, rather than the date of the conclusion the agreement for purchase and sale in notariate. So, to get a bill of sale is necessary to submit an application, a contract for purchase and sale and receipt of payment of the State fee. Complete information can be found at http://emdkdedrx.gov.az/, and you can also take advantage of the electronic system at http://emdkdedrx.gov.az/?id=499
On the possibility of obtaining a loan to purchase a home by a foreigner it should be noted that the issue of purpose loan to buy a house or other purposes is the case of any bank and with such a question you can apply to any bank carries out banking activity on the territory of Azerbaijan.
But Azerbaijan Mortgage Fund under National Bank of Republic of Azerbaijan was established to improve living condition of population, build the efficient housing finance mechanism, adapt the supply with real demand and attract local and foreign investors to mortgage lending. Mortgage lending covers whole territory of Azerbaijan. You can get detailed information from official web-site of Azerbaijan Mortgage Fund http://www.amf.cbar.az
Mortgage loans allocation conditions
Conditions Standard mortgage loans Social mortgage loans
Max amount 50 000 AZN 35 000 AZN
Max annual interest rate 8% 4%
Max period 25 year 30 year
Prepayment 20% 15%
Allocation of mortgage loans through the Fund should meet the following requirements:
• Loan should be paid out in Azerbaijan manats;
• Loan should be given to Azerbaijan Republic citizen, not to the foreigners;
• Mortgage object can be either flat or private apartment;
• Loan amount should not be more than 80% of the market price of real estate loaded with mortgage on the date of Loan allocation;
• Monthly repayment amount on mortgage Loans should not exceed 70% of borrower’s (borrowers’) total monthly incomes.
• Regular repayments regarding life and activity of borrower (joint borrower) and his family and expenses for keeping each family member can not be taken less than indicated living minimum per country.
• Borrower’s age on last loan repayment date should not exceed the limit of retirement age defined in legislation;
• Loan should be provided by the real estate mortgage;
• Real estate loaded with mortgage should be estimated by independent evaluator listed in agent list of AMF and with whom relevant contract on cooperation was signed;
• The rights of mortgage holdershould be registered in state registration according to the applicable laws;
• Principal amount and interest payments on loan should be paid equally (annuity payments) per month;
• Real estate loaded with mortgage should be insured based on market price of real estate not exceeding the amount provided by mortgage loan;
• Life insurance contract. Life insurance of joint borrowers should be calculated in proportionally on personal income and the weight and total amount of joint borrower life insurance should not be less than the mortgage loan amount;
• Other requirements as defined by AMF.
Main documents which should be provided for getting mortgage loan
• Documents required for getting mortgage loan
1. Identification card and its’ copy of borrower (joint borrower)
2. Certificate of Marriage (or bill of divorce) (copy of document).
3. Identification cards (copy of document) of adult family members living together with Borrower (joint Borrower)
4. Identification cards or birth certificate (copy of document) of under age family members living together with Borrower (joint Borrower)
5. Labor contract of Borrower (joint borrower) or copy of workbook cofirmed by Human Resources Department of his/her workplace.
6. Documents proving Borrower’s (joint borrower) income (reference from main or if has additional work place, and etc.)
7. Evaluation act of mortgage subject.
• Documents required for official registration of mortgage
1. Document (extract from state registration) proving property right of dwelling area loading by mortgage and technical passport (if required).
2. Document proving not loading of mortgage subject by other obligation and limits.
3. Reference about registered persons on dwelling area loading by mortgage.
4. Copy of husband/wife’s, other registered adult family members’ consent provided to notarial body about mortgage object selling without court and loading by mortgage. If the owner of mortgage object is under age person, copy of tutorial and guardian bodies’ consent in the frame of his/her interests.
• Documents which should be provided after official registration of mortgage
1. Origin of mortgage agreement (Composite agreement) and mortgage paper, and documents confirming their state registration.
2. Documents confirming insurance of mortgage object from case of Borrower’s death and loose of work ability and payment of insurance payments.
3. Copy of bought dwelling area purchase contract.
4. Copy of identification card of dwelling area seller (for physical persons).
• Documents which should be provided if Borrower is private owner
1. Certificate about registration of owner in tax authority (copy).
2. Income tax accepted by tax authority or simplified tax declaration.
• Documents which should be provided additionally if borrower is from social category
1. Document confirming Borrower’s concern to social category.
Note: Copies of provided documents should be notarized.