In the context of switching to remote work, flexible employment, and returning to offices, Belarus offers real estate options for rent as the optimal way to meet companies’ production and office needs. However, renting an office can raise many questions. This article considers the main aspects of concluding a real estate lease agreement for companies in Belarus and the specifics of taxation.
What are the features of a real estate lease agreement in Belarus
1. What is the rental of real estate
A lease is the transfer of real estate to a tenant, which is characterized by two characteristics:
- The property is transferred to the tenant for temporary use and (or) possession.
- The property is transferred to the tenant for a fee.
State registration of a lease agreement for real estate is not required except in cases where the landlord is an individual who is not an individual entrepreneur.
2.What applies to real estate in Belarus
In Belarus, real estate includes property that is inextricably linked to the land: land plots, buildings,, parts thereof, individual premises, parking spaces, an enterprise as a property complex, and aircraft and ships.
3. How to describe the real estate object in the contract
The most important thing when renting a property is to choose a suitable property and rent it profitably. For the lease agreement to protect not only the landlord but also the tenant, it is necessary to describe in the contract its subject: real estate, which is leased under the contract.
About real estate, it is necessary to check the contract for the presence of such essential data:
- The cadastral number is the number of the object’s state registration.
- Purpose – it can be a production room, a non-residential room, a warehouse, or a cleaning room.
- Description of the border.
- The address where the property is located.
- The area of the land plot.
- The inventory number is based on the accounting data of the lessor company.
The contract also specifies the amount of rent and the payment deadline. The procedure for calculating rent is defined in a lease agreement for real estate that is owned by the state.
4. Features of renting a property that belongs to several owners
In the case of renting a property that belongs to several owners and is divided into shares (it is in joint ownership), the consent of all owners is required to conclude a lease agreement. If the common property is not divided into shares, it can only be rented out partially by allocating a share.
5. Subletting and disposal of real estate
Real estate can be sublet with the landlord’s consent. A sublease agreement is concluded by default for at least three years, but with the lessor’s consent, it can be concluded for a shorter period.
Also, with the consent of the landlord, the tenant can:
- Transfer his rights and obligations under the lease agreement to another person – a “rehire”.
- Pledge the right to rent.
- Contribute the right of lease to the authorized capital of companies.
6. Pre-emptive right of lease
At the end of the lease term, the tenant who did not allow violations of the lease agreement has a preferential right over other candidates to conclude a lease agreement for a new term. In this case, the tenant warns the landlord of such a desire.
What are the terms of the lease agreement to pay attention to
As a rule, the landlord draws up a real estate lease agreement. Therefore, it is helpful for the tenant to contact a lawyer and accountant to examine the contract terms before signing it. In this case, you can always draw up a protocol for disagreements with the help of a lawyer and agree on the terms of the contract. We recommend that tenants pay attention to the following terms of the agreement:
About the procedure for using the rental object. For example, it may be that the tenant will be required to conclude a real estate security agreement at his expense, insure the property, receive the key from the guard or hand it over before the end of the working day set in the tenant’s company. Finding such points in advance and coordinating changes with the landlord is better. Also, the order of use may include the mode and methods of real estate.
About the property that is leased together with real estate. This is called “real estate ownership”. The role of accessories can be furniture, plumbing, air conditioners, room keys, blinds and other properties in the rented property. As a rule, such property is leased for the same period the real estate object is leased.
About the documents transferred to the tenant and the real estate. This is usually a copy of the technical passport.
About the disadvantages of the leased property.
The description of the shortcomings in the lease agreement protects the tenant from compensation for those shortcomings that he got along with the real estate. Unfortunately, some shortcomings can only be discovered over time, for example, at the beginning or end of the heating season in Belarus. To agree to such a condition, we recommend that you study the property’s history and insure yourself with the help of a rental lawyer.
About the condition of the property.
The property’s condition must suit its intended use and meet safety requirements.
About the payment of utilities.
Tenants who rent real estate that belongs to state ownership pay for utilities separately from the rent. When private real estate is rented, the issues of payment of utility costs are resolved in the contract.
How to confirm the acceptance of real estate for rent
One contract may not be enough to transfer and accept real estate for rent. As a rule, the parties sign a transfer act or other document in which they record the transfer and acceptance of property for rent and the transfer and acceptance of documents and accessories of the real estate object.
When renting real estate that belongs to state ownership, a transfer act is always drawn up. Such an act includes, in particular, a description of the property’s condition and the timing and procedure for correcting detected malfunctions.
After signing the document confirming the acceptance and transfer of real estate, it is considered that the property has been leased to the tenant.
Peculiarities of taxation for a tenant when renting commercial real estate
Rental of real estate from Belarusian companies
When renting real estate from Belarusian companies, the tenant usually does not pay property tax. There are also no specifics for paying income tax (since there is no profit) or value-added tax.
The lessee is not obligated to pay land tax in the case of renting real estate located on land owned by the lessor.
However, the rent is subject to income tax and value-added tax.
When renting real estate from a foreign organization that does not have a representative office in Belarus, income tax on foreign organizations must be withheld from the rent.
When renting real estate from an individual, the tenant must withhold income tax from the amount of rent.
Renting real estate from an individual in Belarus
In 2024, real estate tax is paid by tenant companies that lease capital structures, buildings, and parts thereof located in Belarus from individuals and foreign companies that do not have a permanent representative office in Belarus. The tax base is defined as the property’s value specified in the lease agreement.
In the lease agreement, we recommend determining the property’s value based on an independent assessment of the property’s market value in prices as of January 1 of the year for which the property tax should be calculated. The conclusion of an independent assessment is drawn up by companies and individual entrepreneurs engaged in valuation activities. Such a conclusion can be obtained by a tenant organization that rents real estate from an individual or a foreign company. In this case, the real estate tax base will be the most significant amount specified in the lease agreement or after an independent assessment.
Otherwise (when there is no conclusion on an independent assessment), the tax base is determined based on the estimated cost of one square meter as of January 1 of the tax period. The size of the estimated cost for different conditions is defined in the tax legislation. An experienced rental accountant will help you figure this out.
Under a real estate lease agreement concluded with individuals, the lessee must provide the tax service with a copy of this agreement and the act of acceptance and transfer of property within 30 days from the date of signing by the parties of the act.
How we can be useful when renting commercial real estate in Belarus
Our lawyers are experienced specialists in the rental sector and taxation. We can:
- Advise you on the selection of real estate for your purposes.
- Analyze the lease agreements that the landlords have provided to you.
- Calculate taxes for different real estate rental cases.
- Represent your interests in government agencies.
Contact us
If you have any questions or disputes regarding the rental of commercial real estate in Belarus, we will be happy to help you! Our long-term experience in rental relations will help you resolve any disputes in this area.
- +37529366-44-77 (WhatsApp, Viber, Telegram);
- info@ambylegal.by.
