Since 2022, Russia has imposed restrictions on the sale of real estate by individuals and companies from so-called “unfriendly countries” — a list that includes all EU nations, the UK, the U.S., Canada, Japan, South Korea, Australia, and Switzerland. For a long time, these restrictions created real legal barriers. Today, the sale of Russian property by foreigners is still possible — but only under very specific conditions. Chief among them: payment must be processed through a blocked “C-account” (счёт типа «С»).
In this article, I’ll explain how it works — and how you can protect your interests if you’re a foreign owner looking to sell.
Table of Contents
- What Are “Unfriendly Countries”?
- Can Foreigners Still Sell Property in Russia?
- What Is a C-Account?
- What Payments Are Allowed from a C-Account?
- Money Frozen in Rubles
- What If You’re a Foreigner with a Russian Residence Permit?
- What If the Funds Are Already in a C-Account?
- What If You’re from a “Friendly” Country?
- Dual Nationals: What If You Have Russian and Foreign Citizenship?
- Tax Rules When Selling
- Alternatives When Selling Isn’t an Option
- Conclusion
What Are “Unfriendly Countries”?
Shortly after the war in Ukraine began, Russia published a list of countries that had imposed economic sanctions. Individuals and companies from these countries are legally considered “non-residents from unfriendly states.” They face special restrictions on currency transfers, ownership rights, and real estate transactions involving Russian parties.
This status applies equally to natural persons (individuals) and legal entities (companies, foundations, partnerships) from these jurisdictions.
Can You Still Sell Property in Russia as a Foreigner from an Unfriendly Country?
Yes — but there’s a catch.
Sales are allowed, but only if the payment is made into a so-called C-account, a special type of blocked ruble account that’s tightly controlled by the Russian state.
If you’re a foreigner with a permanent Russian residence permit, the rules might be different — more on that later.
What Is a C-Account?
A C-account is a blocked ruble account held at a licensed Russian bank. It’s designed specifically for foreign individuals or companies from unfriendly countries. The idea is simple: restrict the outflow of Russian capital abroad.
What Can You Actually Do With Money in a C-Account?
Let’s be clear — a C-account isn’t like your regular bank account. You’re allowed to:
- Pay Russian taxes and fees
- Buy Russian federal bonds at auction (OФЗ)
- Transfer funds to other C-accounts or, with special permission, to regular accounts
- Cover banking fees
- Pay contractual penalties (interest, late fees) owed to Russian counterparties
- Refund amounts wrongly credited
That’s it.
In other words: you can sell your property without asking permission from a government committee — but the money stays locked up.
Money Frozen in Rubles
Selling is one thing. Accessing the money is another.
If you receive the proceeds from a property sale into a C-account, you’re dealing with more than legal restrictions — you’re facing currency risk.
The Russian ruble has suffered multiple devaluations in recent decades against the euro and dollar. And as long as your money sits in a blocked C-account, you’re exposed. You can’t convert it. You can’t transfer it freely. You can’t use it abroad.
Worse, there’s no sign that the C-account system is going away. On the contrary — the Russian government is using it as a geopolitical tool. Expect it to stay in place for the foreseeable future.
Bottom line? Even if the money is eventually released, by then a significant chunk of its value may have evaporated — lost to inflation and exchange rate collapse.
What If You’re a Foreigner with a Russian Residence Permit?
There’s a big caveat buried in the rules.
Foreigners from “unfriendly countries” who hold a permanent Russian residence permit (вид на жительство, ВНЖ) are classified as currency residents under Russian law. That changes everything.
In an official letter from the Central Bank of Russia (August 2022), they stated:
Transactions involving the transfer of property rights between a resident and a person recognized as a resident under Russian currency law can be carried out without applying the procedures established by Decree No. 81 — and without the use of a C-account.
Translation: if you’re legally recognized as a currency resident, the C-account requirement do not apply to you at all.
In practice, Russian authorities often do register sales by such foreigners — without requiring a C-account. But not always.
Some legal experts point out:
- The Central Bank’s letter is not a legally binding interpretation.
- Even if correct the Central Bank’s interpretation of the rules is correct, Decree No. 81 still requires approval from the Government Commission for foreign transactions — unless a C-account is used.
The policy has evolved in steps: first, all sales needed approval; then, sales via C-account were allowed without approval; and finally, the Central Bank suggested that currency residents are outside the decree’s scope entirely.
Since the letter refers broadly to the entire decree — not just the C-account clause — I don’t follow this reasoning that commission approval would still be needed for currency residents.
Still, some local registry offices (like Rosreestr, Russia’s land registry) have reportedly refused to register such transactions. But the majority of the time, these sales go through without issue.
What If the Funds Are Already in a C-Account?
Here’s the catch.
All the flexibility granted to foreigners with Russian residency? It usually only applies to new transactions — not to money that’s already sitting in a C-account.
If the proceeds from your sale were transferred to a C-account before you obtained permanent residency, that money likely remains frozen. You’ll need explicit government permission to release or move it. And as of now, there’s no clear or consistent process to unlock those funds.
The bottom line: the law might favor you — but practice doesn’t always follow. This remains a legal gray area, and one that’s still evolving.
What If You’re from a “Friendly” Country?
Everything we’ve discussed so far applies to people and companies from “unfriendly” countries — those that have imposed sanctions on Russia, like the EU, the U.S., the UK, and others.
But if you’re from a country not on that list, most of these restrictions don’t apply to you.
That said, selling real estate in Russia as a foreigner is never exactly straightforward. Even if you’re from a “friendly” country, you’ll still face obstacles: currency control laws, tax rules, local bureaucracy. Russian banks and notaries may impose additional checks, especially for cross-border payments or strategic properties.
Bottom line: friendly or not, get legal advice — and build a clear transaction strategy.
What If You Have Russian and Foreign Citizenship?
According to section 1.10 of the Official Clarification issued by the Central Bank of Russia on March 18, 2022 (No. 2-ОР), if someone holds Russian citizenship along with any other nationality, they are to be treated only as a Russian resident for the purposes of Decree No. 81 — regardless of that second passport.
The same principle applies to Russians who hold a residence permit in an unfriendly country: they are still considered Russian residents under currency law.
This means they are not subject to the restrictions placed on foreign non-residents. Their transactions — including real estate sales — fall under the normal rules for Russian citizens.
Tax Rules When Selling
Sanctions have changed a lot — but they haven’t touched Russia’s tax code.
Since 2019, if a non-tax resident sells real estate in Russia after the minimum ownership period, they pay zero capital gains tax — just like residents. I wrote a detailed blog post about this back in 2019.
However, if you sell before that minimum holding period expires, your tax status suddenly matters a lot.
If you’re not a tax resident at that point, you may face significant capital gains taxes. So plan your timing carefully.
Alternatives When Selling Isn’t an Option
For many foreigners from “unfriendly” countries, getting a Russian residence permit is nearly impossible. So if a sale is blocked or unrealistic, you may want to consider other legal strategies.
Could these restrictions eventually be lifted? Maybe. But there’s zero indication of that happening any time soon.
Here’s what’s still legally allowed:
Gifting
Since September 26, 2022, gifts of Russian real estate to residents (meaning currency residents, not tax residents) are fully legal — and do not require approval from the Government Commission.
Gifting property to close family members is tax-free under Russian law. But if that family member later sells the property, capital gains tax might still apply.
Gifts to non-family members are also allowed — but the recipient will owe gift tax and, if they sell the property before the minimum holding period, capital gains tax as well.
Renting Out the Property
I recently published a detailed blog post about rental contracts in Russia — check it out here.
If you’re not a tax resident of Russia, renting out property isn’t very profitable: you’ll be taxed at a flat 30% rate on gross rental income, with no deductions.
One alternative is to operate through a Russian sole proprietorship. In that case, you may qualify for a flat 6% tax on revenue — a huge difference.
But be careful: if the property is used commercially for rental income, you lose the right to sell it tax-free once the minimum ownership period is over.
Could you regain that right? Possibly — if the property is taken off the rental market for a while. But how long is “long enough”? That’s unclear, and it depends heavily on the facts of each case.
Conclusion
Selling real estate in Russia through a C-account is, in most cases, an unattractive option. But there are exceptions. For example, if the seller has a significant tax debt in Russia, those funds can be used directly from the C-account to settle it.
Van Rhijn Legal & Property assists clients with every aspect of real estate transactions in Russia. We also help foreign nationals apply for permanent Russian residence — which, as shown in this article, can be a valuable legal asset when it comes to future property sales.
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