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Thread: Question about transferring money into Russia and buying a house

  1. #1
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    Question about transferring money into Russia and buying a house

    So my wife made an account at Sberbank and we transferred money there to buy a house. We've both been living in America many years and the money is what we have saved up from my income. So can we just take the money and buy a house or is there something else we need to do?

    My wife is a Russian citizen and is registered in an apartment in Russia but neither of us are "residents" because we haven't lived in Russia in well over a decade. My wife read something about needing to put the money into some special account but she's not sure if it applies to our case. Basically, to me it sounds like the Russian government is worried about people using unreported income that hasn't been taxed to buy real estate. Thing is, I don't see how putting the money in some account would make any difference. Maybe I'm just misunderstanding the point.

    Anyone know if this is a legitimate concern? Can we just buy a house with the money or is there some requirement we need to do first? Is there anything we have to do to prove the money isn't taxable by the Russian government?

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    This sounds a lot like the situation we had when we bought our house a few years back.
    Step 1 - open the bank account. Though we had a joint account back in Europe, this wasn’t possible here so the account was opened in my name. It was a regular account.
    Step 2 - transfer the money. No problems.
    Step 3 - buy the house. This is where the fun started. Back in Europe I would have transferred the purchase amount to the notary who would in turn transfer the money to the seller on signature. No way, however, was the notary here going to get involved in that. So we had to go to the bank together with the seller and arrange the transfer. It was complicated by the fact that they did not bank with Sber and so did not get an immediate confirmation from their bank that the transfer had completed. Common sense eventually prevailed and we were able to return to the notary to complete the signing.

    As long as you are not residents in Russia, where the money comes from is not really a concern of the Russian government. It might be a concern of your present country. I was never asked where the funds for our house purchase came from, neither by Sberbank nor by the Russian tax authorities.

    Based on my experience, I would advise you to have a chat with Sberbank about the “best” way to transfer the money to the seller. Maybe they do offer an escrow service. Also possibly have a chat with a notary to see what they can suggest.

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  4. #3
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    Also worth the small investment in time and money, to get advice from accountant and/or attorney. The more you know, the less likely you will become a victim.
    "Defund the Social Sciences." - Fantastika, 2020

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    Thanks for the replies! I think my wife is just a little overly scared of something going wrong with the purchase.

    What kind of scams does she need to watch out for?

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    This doesn’t really qualify as a scam, but something to be aware of. Since we couldn’t use an escrow account and because the seller was adamant that they would not sell without some kind of guarantee, I had offered to transfer the money to them in advance. Curiously (for me anyway) they refused saying that should anything happen to them before the sale contract was signed then I would have a hell of a time trying to get my money back.

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  9. #6
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    Escrow accounts at Sber…

    …may well be a possibility, though these press articles suggest they are more for use with professionals:
    https://www.sberbank.ru/en/press_cen...g=en&type=NEWS
    https://www.sberbank.ru/en/press_cen...g=en&type=NEWS

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  11. #7
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    Quote Originally Posted by Freud View Post
    Thanks for the replies! I think my wife is just a little overly scared of something going wrong with the purchase.

    What kind of scams does she need to watch out for?
    most important! who else might be still registered but not living there, or not even being in Russia, at the house. after all, a relative that lives somewhere in God knows where, might come i na few weeks or months or YEARS and claim that he or she is till legally registered here and is entitled legally to a part of the house or will want to live here.

    one thing though i do agree with your wife ( mine is Russia nas well) make SURE everything is done legally. the more stamps and papers and -advocate - the better. your house is your livetime investment, your pension, your everything. and you dont want in 10 years time have some hassles because of even a minor mistake.
    There is no greater treasure then pleasure....

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  13. #8
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    Freud,
    your wife will be asked to proof her income. So the best way to handle it is to prepare in advance. Make sure you have your tax returns/pay stabs ready. Tax office will contact her the year after the purchase.

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    Quote Originally Posted by seaworld View Post
    Freud,
    your wife will be asked to proof her income. So the best way to handle it is to prepare in advance. Make sure you have your tax returns/pay stabs ready. Tax office will contact her the year after the purchase.
    That’s interesting. Perhaps because I was the one opening the bank account and buying the house — and I wasn’t Russian then — I wasn’t asked to prove the source of funds. Having said that, since I transferred (most of) the money from a reputable bank in Europe, that probably satisfied the requirements, at least for Sberbank.

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    Quote Originally Posted by BigBear View Post
    That’s interesting. Perhaps because I was the one opening the bank account and buying the house — and I wasn’t Russian then — I wasn’t asked to prove the source of funds. Having said that, since I transferred (most of) the money from a reputable bank in Europe, that probably satisfied the requirements, at least for Sberbank.
    same here from Raiffeisen. when my pension fund paid out money was transfered to Moscow. the bank never asked for proof where the money came from. obvious though i has the mail from the pension fund how much it was and that it would be transferred in a lump sum to Moscow. THAT apparently also satisfied the local tax office. just make sure you keep EVERY piece of paper that you might come across. and might it even be a chit for some 100 ruble payment.AND MOST IMPORTANT- make good color copies of everything. NEVER give away any original papers. while a translation bureau will want to see an original, they only look at it and will than happily accept a good copy for whatever work might be needed. make sure that everything is done is LEGAL.and will hold up in a court of law, one never knows. And most important never listen to a -friend who has an acquaintance who knows someone and it will be cheaper-. it will not be,not in the long run...
    There is no greater treasure then pleasure....

  16. #11
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    There are tons of scams regarding real estate.

    But the biggest one is this - you have to have the seller get a pyschological exam and then that person has to be certified sane.

    Otherwise, they have up to 5 years to reverse the entire transaction. And then sometimes, it can still happen.

    When I bought, we had to provide proof of income, etc. We did it thru Raifaissin. You open an account, which is basically escrow and then you meet the person at the bank, in a conference room. Sign the paperwork and then go to the little secure room, transfer physical cash from one lockbox to the other and boom. You are done.

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  18. #12
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    Quote Originally Posted by americaninmoscow View Post
    There are tons of scams regarding real estate.

    But the biggest one is this - you have to have the seller get a pyschological exam and then that person has to be certified sane.

    Otherwise, they have up to 5 years to reverse the entire transaction. And then sometimes, it can still happen.

    When I bought, we had to provide proof of income, etc. We did it thru Raifaissin. You open an account, which is basically escrow and then you meet the person at the bank, in a conference room. Sign the paperwork and then go to the little secure room, transfer physical cash from one lockbox to the other and boom. You are done.
    on top of it,Raiffeisen, but for sure also other banks, will provide this electronic gadget that lets you, and the other party, check that all your money, might that rubles or Dollars or Euro are genuine.
    There is no greater treasure then pleasure....

  19. #13
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    Just realized I should follow-up and tell everyone that we did successfully buy a house. We won't be there living in it until next year.

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  21. #14
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    For future readers, always do the transaction via a very experienced, honest realtor. How you find one, that's another matter entirely. Personal recommendations are probably the only way.
    "What we need, as the ancients understood, is not a politician who is a business man, but a king who is a philosopher." -- G.K. Chesterton

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