Can I buy property in Mongolia as a non-resident foreigner?
Yes, there are no restrictions placed on foreigners in particular, the same laws apply equally to Mongolians and foreigners. Please visit our legal guide for further information.
Are there any restrictions or taxes placed on the repatriation of capital to my home country?
No, Mongolia is a free market economy and there is no restrictions on the repatriation of capital either as a foreign individual or as a foreign entity. Occasionally, foreign entities can sometimes find themselves required to pay dividend taxes, but this requirement does not apply to the repatriation of foreign capital by individuals.
Wire transfer is the best means to take money out of the country and that can be done through any of the internationally-minded Mongolian banks. Although there will be no Mongolian taxes charged on an individual wire transfer, there are usually bank fees associated with the transfer in addition to any taxes that the receiving country will subtract from the transfer amount.
What sort of real estate turnover is there in Ulaanbaatar?
The rate of turnover in the city is very high, and there is a shortage of apartments for rent, particularly in the luxury sector. In the sales sector there is some strong demand, principally in mid-range to luxury prices.
What is the demand like?
Housing demand is high in Ulaanbaatar. This demand is driven by Mongolian home buyers as well as from foreigners living in Ulaanbaatar and overseas international investors.
Has the Ulaanbaatar real estate market developed recently? There seems to be a boom.
Yes, currently the market is developing and land in the city center has become rather precious. From outside the city, it looks like a property boom is currently underway in UB. However, we believe this is just a normal expansion of apartments in a city that has a scarcity of apartments available for its citizens.
Can real estate be used as collateral?
Yes, real estate is often used as collateral in Ulaanbaatar and across Mongolia.
One of my primary concerns is my status of ownership (i.e. deed), could you tell me more about how this works in Mongolia?
Foreign ownership of "immovable property" is allowed in Mongolia, although ownership of land by foreignors is not. The owner of an apartment is issued an apartment ownership certificate which is the same as local residents' certificates. This certificate can be sold or even used as collateral with banks. This ownership certificate is protected by Mongolian law.
What taxes are applicable on my property upon the purchase and the subsequent rental of the apartment?
There are very few taxes currently imposed on foreigners investing in Mongolia. There is a 2% sales tax which is applicable on the wholesale value of the property purchased after the building was completed. For off-plan purchases there is no tax. There is also a 10% income tax which is currently applied to rental payments.
I would like further details about the ownership structure concerning a building such as the Olympic Residence. As foreigners cannot own land, how is the ownership structured?
Ownership of the apartments is done similarly to condominium projects around the world where the owners of the individual condos/apartments are issued a deed. In the case of Mongolia we will refer to it as an ownership certificate.
Each certificate is issued after the building has been approved by the relevant authorities at the ministry of construction, at which point an application is made to the "Immovable Property Office" by each individual tenant. The application includes a picture of the building with the specific window of the relevant apartment circled in red. In addition, the contract of the owner with the developer must be submitted. Lastly an application letter asking for the certificate is needed. After this, the certificate is issued within two working days.
The certificate is the ownership of the apartment and can be sold, gifted, or used as collateral at the bank for a loan. In fact, land ownership has very little to do with ownership of the apartment.
The developer is the leaser of the land. Most developers buy the "right to build" on a piece of land and during that time they can lease the land. After the building is approved most developers give the land back to the district for management. The reason that they do this is so that they no longer have to pay the lease on the land. It is not possible for the district to resell the land. If another developer wants the land and to build a building they would need to buy every apartment in the building before they knock it down.
Do you have a question concerning real estate in Ulaanbaatar?
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