Foreigners sell their real estate in Armenia

ArmInfo. In July 2020, in Armenia, foreigners made 299 transactions for the purchase and sale of real estate, 99 of which were acquisitions. In total,  non-residents accounted for 6% of the total number of transactions  registered in July.

According to the State Cadastre of Real Estate in July, the sale of  real estate owned by foreigners in Armenia  increased by 31.6%,  although on an annualized basis they decreased by 42.5%. It should be  noted that only in Yerevan, transactions for the sale of real estate  by foreign citizens climbed 2.3-fold in July, with a y-o-y decline of  31.4%.

Non-residents are not very active in buying real estate. For seven  months of the year, such transactions in quantitative terms decreased  by 48%, although in July alone there was a slight increase of 25.3%.  Specifically, transactions related to the purchase of housing by  foreigners in the capital fell by 42.7% y-o-y, with an increase of  37.5% in July.

According to official data, the lion's share of transactions on the  purchase and sale of real estate in the RA by foreign citizens falls  on apartments (purchase 34.3%, sale 38%) and land (purchase 31.3%,  sale 31.5%), and the lowest interest - for buildings of industrial  importance (purchase 1%, sale 0.5%). The most actively buying and  selling real estate in Armenia are citizens of the Russian  Federation, followed by citizens of the USA, Iran, European  countries, and the CIS. Thus, of the total number of transactions of  foreigners with real estate, the dominant number was made in July by  citizens of the Russian Federation - 225, of which 158 were sold and  67 were bought. ), European countries - 16 (11 sales, 5 purchases),  and the CIS - 14 (11 sales, 3 purchases).

Most of the transactions with real estate by foreign citizens are in  apartments - 110, land - 94 and private houses - 70, and in all cases  the July statistics record a serious dominance of sales over buying.   According to experts, such negative dynamics could be influenced by  changes in the Tax Code of the Republic of Armenia for the  application of new mechanisms for calculating property tax, based on  its market price, not the cadastral price.

To note, the amendments to the RA Tax Code on updating the  methodology for calculating property tax were approved by the  parliament on June 25. This process will be carried out in stages  over six years. In particular, in 2021, the accrual will be carried  out in the amount of 25% of the market value of the property with a  gradual y-o-y increase in these volumes by 25%. In addition, a y-o-y  rate of 1.5% of its value will be applied to property worth 200  million AMD and more, instead of 1% previously planned. Thus, the  citizens of the country will feel the first slight increase in the  size of the property tax in 2.5 years - from December 1, 2022. In  this case, one of the 20 zones of property location will be taken  into account. For example, in the first zone, which covers the center  of Yerevan, 1 sq. m of housing costs 330 thousand drams, in the 19th  zone, which is located in the border regions - 142 drams, in the 20th  zone - 92 drams.