Many years ago, I was in a car with some friends. One of the ladies worked as an accountant at a mining company and she made a remark that I still remember. She said: “Most young people buy property and they think that the purchase price is the real amount. They don’t figure in the cost of the purchase and all the rates and taxes. And it is those rates and taxes that kill them in the end!”
Therefore, when I started budgeting for the purchase of the wooden ruin that I had found on OLX, I made sure to find out about all the possible “hidden costs” involved in this purchase.
The advertised price isn’t much, but the house isn’t privatized. That means that I am essentially buying government property (a holdover from the USSR days) and that I need to pay to get the deed of ownership described as “private property”. Then, there is the “transfer of ownership” from the seller to me. The Ukrainian government levies a 1% tax as a contribution to the national pension fund, and there is also a 1% property tax that is payable annually.
Furthermore, I need to have a Ukrainian tax ID and a local (Ukrainian) bank account, to facilitate the transfer of funds.
All the above involves a busload of paperwork, and I needed to get a copy of my passport apostilled, and that and a notarized power of attorney letter couriered over from Rustenburg to Kyiv! There, an attorney takes over on my behalf. That’s another legal fee that needs to be taken into consideration.
Here’s the part that I am grateful for.
Since the structures on the property are made from wood and those constructions are mostly rotten, breaking it down will not be a costly affair. On the contrary, I might be able to do it by myself, armed with a chainsaw and a sledgehammer. PLUS I shall gain a lot of firewood in the process! But I’ll have to purchase the tools and the fuel for it and set up a tent or something similar as a temporary roof over my head. Another cost to consider.
Hopefully, by now you have the picture. Buying a rescue property in Ukraine is not a cheap affair. There is a lot of love and work and money that needs to be invested into making that house a home. A friend once referred to a home renovation as “polishing a turd” and while that’s a rather crass description, it would not really apply in this situation. Why? Because this is essentially a total rebuild, albeit on the same foundations.
I’m concluding this post with the words of Paul Kruger, the president of the “Zuid-Africaansche Republiek” in the late 1800’s.
“Take the good from the past, and build the future upon its foundations!”
And remember to budget for it!