The concept of real estate is an important distinction with a large nomadic country. Before making any financial decision, we suggest that investors consult a trusted expert real estate agent for guidance through the purchase process.
Can foreigners own property in Mongolia?
Except for the land, there are currently no restrictions on buildings or apartments of foreign residents or non-residents in Mongolia. Certified examples of buyers’ permits must be presented to the property registration office, along with the request for new registration.
After the collapse of the Soviet Union, Mongolian property laws were rewritten after a peaceful change in the market economy. The new government implemented a comprehensive free-floating freehold system of real estate, which allows property owners to hold a freehold interest on the property, but not the land on which it sits.
Despite this land ownership system, foreign nationals can be the same owners of Mongolian apartments and earn rental income from them without the need of a local partner or nominee.
The Home Ownership Association (HOA) established in law on the registration of property requires that the owners of all apartments in the building must construct an HOA upon completion of the building, and then transfer the title of the underlying land to the HOA. Paperwork is done. are given. Entered the office of the local district governor.
Do Foreigners Need a Real Estate Ownership Certificate?
The right to own property differs from the right to own land and is regulated by many laws in Mongolia. However, it is the law on real estate registration that provides legal protection to property owners – the right to real estate immediately compels registration in the real estate office.
Typically, an application for a real estate ownership certificate will be processed within 5 to 30 days. To initiate the registration process, an individual, legal entity, or related agent must provide a notarized purchase contract to the office and the establishment of the dimensions and valuation of the property from a recognized authority, as well as other forms of ID. Until tow delivery is requested, a standard service fee of MNT 20,000 will be charged.
Upon obtaining title to a property, the owner has commercial rights to sell, lease, transfer, inheritance, pledge, or guarantee to another party. The rights, legal protection, and registration process are the same for all property owners, whether they are Mongolians, foreign individuals, or companies.
What other fees should you expect to pay when purchasing property in Mongolia?
Most real estate agencies do not charge buyers. In most transactions, the seller pays any commission or fee.
Notary fees are typically around MNT 10,000 – MNT300,000 (the US $ 5 – US $ 150) depending on the property value. The buyer must pay the costs related to the notarization of the contract and registration at the real estate registration office of the district.
A stamp fee of 2 percent of the declared purchase price is payable, usually divided between buyer and seller, although this can be negotiated. More information about taxes applicable to the purchase of real estate can be found in our guide to Mongolian property tax.
How can you use foreign lands in Mongolia?
While real estate may be directly owned by foreign investors, they can only lease the land.
Land tenure is divided into three classes: land ownership, land occupation, and land use.
Full free tenure rights, including rights to sell, rent, and drop, are available only to Mongolian citizens. Land possession rights are temporary licensed ownership rights that can only be held by local legal entities.
The use of land is the only type of right for immigrants in Mongolia. The law on land allows foreign nationals to lease land for up to 5 years, the option to restore, and legal things up to 60 years.
Foreign residents who want to purchase land use rights must live in Mongolia for more than 183 days in a year and although companies have land-use rights available, foreign-registered companies must first obtain permission from the government.
Major property laws in Mongolia
About the real estate sector, the following laws are most relevant:
- Civil Code
- General Law on Taxation
- Law on real estate registration
- Law on investment
- Law on real estate tax
- Law on personal income tax
- Law on land
- Law on Land Duty
- Law on the allocation of property to Mongolian residents for buying
- Law on state listing of property ownership rights and other similar property rights
- Law on Urban Planning
- company law
- Law on licensing
Why you should invest in Mongolia
Mongolia is a great place to invest in property as a foreigner. The supervisory structure on the title and estate benefits, combined with a great tax policy and exchange controls, makes Mongolia one of the best goals in Asia for property ownership.
In extension to the fastest growing economy in the region and the fastest growing in the world, there are various compelling reasons that Mongolia is an ideal destination for investors to view.
It includes a highly favorable regulatory environment for property ownership, with rights exercised by international investors regarding the ownership of property acquired by Mongolian citizens. The Ali hovering freehold system gives investors insufficient freehold rights to real estate in Mongolia.
There are no currency controls. The currency is fully interchangeable and floating freely and there are no problems to withdraw profits from Mongolia. Indeed, the recent exchange rate weakness presents a strong buying opportunity for investors deploying foreign exchange in property markets.
It has excellent tax laws. The tax law in Mongolia is cut with a 10 percent income tax, representing one of the lowest income tax rates in Asia. Further, there is no concept of capital gains tax in the market and only a two percent stamp duty is paid on the final sale of the property.
There are higher overall benefits from both cash rental income and capital growth. Mongolia’s real estate market has the highest cash rental yields in Asia as well as strong capital appreciation probabilities. From 2005 to 2013, the average annual rental yield from a residential location was 11 percent per year throughout Ulaanbaatar.
Rapid growth in per capita gross domestic product (GDP), disposable income, and real wages are boosting demand for high-quality residential and retail space across the city, and the property market has grown by an average of 15 percent per year over the past 10 years happened. The posting rate is. Years.
It is below the detector. Mongolia is a rapidly growing frontier market that is relatively unknown to the rest of the world. As such, competition for good assets in good locations from other foreign investors is limited.