Property Purchase

Individual sellers of the immovable property are the taxpayers with regard to the property transfer. No additional income is subject to tax in this regard. The property is taxed at a specific rate over the unit rate, which is the square meter (area) of the sold property. Differentiated tax regime applies. A general standard rate is 15 AZN per square meter. Usually the average house owner pays around 2000-4000 AZN transfer tax in this simplified form in Baku. Several exemptions apply. 

Property tax of individuals is based on differentiated rates depending on the location of property in Azerbaijan. E.g. The general rate in Baku is 0.4 AZN per square meter of property annually. De Minimis rule for the exempt area is 30 sqm, i.e. no property is paid for this part of the property. Property tax for individuals is paid to local municipalities.   

Property tax for legal entities and individual entrepreneurs is 1% of the residual value, calculated and paid annually. This property tax is paid to government treasure and enforced by the State Tax Service. 

No, a foreign person may not purchase land in Azerbaijan. Any land falling under the ownership of a foreign citizen usually due to the operation of law (will and inheritance, transfer as gift etc) must be alienated within 1 year. A domestic company 100% owned by a foreigner is allowed to own lands in Azerbaijan. 

Real estate must be registered by the government in order to fully enjoy ownership rights over the property. State Service on Property under the Ministry of Economy is the central government office keeping the Registry of Immovable Property in Azerbaijan. 

Initial registration of the real estate is conducted upon the application of the property owner by documents evidencing ownership (purchase agreement signed with the developer, financial letter approving payment for the purchased property or in case of personal development of property, approved design and contract over the land). Re-registration of title over the property is conducted by the notary approving the property transfer agreement, i.e. notary sends transfer documentation to the state registry automatically. In both cases, title over the property is issued in electronic format. 

Yes, a foreign citizen may purchase a property in Azerbaijan. No initial permission, domestic residency or similar approvals are required by the laws. The only requirement is to follow the property purchase procedures which are identical with regard to foreigners and Azerbaijani citizens.