Discovering top tier properties in Koncha Zaspa is like jumping over Olympic hurdles – only a few athletes qualify.
Living well is not against the law, but in Ukraine it may be the case.
Year after year, highranking politicians and canny businessmen are pushing their luck. They manage to declare miniscule incomes and, at the same time, enjoy lavish lifestyles in opulent mansions.
Quick on their feet, they register properties in their relatives’ names or talk big about living rentfree in their friends’ houses. It just so happens that their generous friends and family tend to concentrate in the priciest suburbs in the country. The green hamlet of Koncha Zaspa, some 15 minutes away from the Olympic training grounds on the outskirts of Kyiv, is one of them.
Among other famous politicians, Yulia Tymoshenko, before returning as prime minister last year, used to live right next to this golden cove, where she said her friends let her out a house for free. Infected by the shady real estate virus, many landlords of even ordinary flats rarely sign official lease agreements with their tenants or declare full price of their homes to avoid taxation.
Discovering toptier properties in Koncha Zaspa is like jumping over Olympic hurdles – only a few athletes qualify. Fourmeter high metal fences, armed guards and perfect roads are a sure sign of a wellkept treasure behind them. Real estate agents act like bouncers guarding the entrance to this elite club.
“It’s impossible to get inside those homes. One of my clients doesn’t even let me take pictures of his estate, which he priced at $18 million,” says Gayane Muvsisan from Daniels Brock agency, describing her fickle clientele.
Many owners sell their homes only to preselected buyers and hide their asking and sales price, a practice commonly used to reduce tax payments on the sale.
“They usually check if a house hunter is a deputy, a minister or a businessman before arranging a viewing,” the broker says, explaining methods of face control in the topend housing sector.
Unable to show any royal connection, it only became possible to walk through a gothic style door of a $12 million house in Koncha Zaspa with the help of a French businessman who has an interest in oil and gas fields in Africa.
Reticent yet polite, a balding landlord in his early 50s started a tour with a huge perfectly mown lawn lining nearly a hectare of his land. The house was dressed to impress. In the back yard he proudly pointed out safetoeat mushrooms perking among a dozen native birch trees. A small private beach with yellow sand next to a pond added a finishing touch to an idealistic picture of a rustic landscape.
Ivy leaves climbing a pseudogothic 960squaremeter house provided an oldworld look soon to be dispelled by the interior design. The client noted that neither a living room nor a master bedroom made use of a unique view of the water cove on their doorstep. Marble and parquet floors, timber furniture, no airconditioning and solar panels were a part of an ecodesign needed to classify this property as top notch.
Three twotier bedrooms used by the landlord’s daughters looked more like dancing halls than rooms for sleep. In the basement, a confusing combination of numerous storage rooms, tiny showers, small sauna and a pool room left an impression of a poor design. At the end of the tour, the client was quietly wondering who the architect was that spoiled this house.
The brokers explained that it is one of the most unusual, hence expensive properties on the market in the Kyiv region. The owner broke the price into $8 million for a land plot, $2 million for a house and “only one more million on top of it.”
As he refused to budge, his potential buyer probed for a way to reduce taxes by means of declaring only half the price and the rest paying through an offshore account. The landlord seemed fine with an arrangement but asked for cash instead of an offshore transaction. When the French client wondered how he would bring so much cash with him, the client suggested withdrawing it from a cash machine in Ukraine. That was the last they saw of each other.
Many brokers privately admit that most deals are closed under the table to reduce taxes and avoid publicity. Buyers and sellers between each other must pay 5 percent tax on the sale of land and two percent on the sale of a house, not counting brokers’ fees and other deductions to the state funds depending on the size of a property.
Natalya Detsenko-Bilous, senior lawyer at Vasil, Kisil and Partners, says that this practice will stop as soon as Kyiv runs out of land plots for sale.
“Facing a deficit, previous sales of land will be declared invalid.”
One of a few methods to nullify a deal is to prove that it was under agricultural use. Sales of agricultural land are forbidden by law. “It’s no secret that there are at least 10 ways how to bypass the legislation and buy this agricultural land in Ukraine,” explains DetsenkoBilous with regret.
On the way back through the miniature palaces with marble columns and Shakespeare style halftimbered cottages rapidly squeezing out a pine forest, the French businessman concluded the house was not worth the price.
Elena Duliba, chief editor of Real Estate Kyiv weekly magazine, said that elite property star ratings usually fall short of the reality.
“Some lay tile from Kharkiv or Belarus instead of Italian makes. Others use synthetic building materials unsuitable for deluxe homes.”
She added that many plush houses in Ukraine do not meet even half of the 90point criteria set up to assess the topend property market.
Usually the stardom of neighbors determines the price range of nearby houses. A ‘sotka’ of land (1/100th of a hectare) in the elite Koncha Zaspa region of Kyiv is priced from $10,000 to $18,000.
Pinning illegal sales, however, is a low priority for lawmakers because they seem to have a finger in the same pie. A new bill on the sale of real estate is gathering dust in the parliament since 1996.
