The rapid changes that have taken place in the economic and legal environment in Uzbekistan since independence have led to profound developments in the real estate market. Yet, at the same time, vestiges of the previous system do remain, providing formidable challenges to investors.
The legislation underpinning real estate activity is still very much in the developing stage and there remain many restrictions on real estate ownership. Uzbek legislation defines real estate as a variety of properties, including the plots of land and subsoil, buildings and premises. The right of ownership, i.e. its acquisition, transfer, restrictions and termination, in respect of real estate is subject to state registration.
According to the Uzbek land code, land is state property, and cannot be bought or sold in Uzbekistan. In July 2006 a Presidential Decree was issued on “privatisation of land plots occupied by the estate of legal entities and/or individuals”. However, there have been no developments in this area since then, and enterprises continue to lease plots of land when they acquired the objects of trade or service located on these plots. When buildings are sold or otherwise transferred, the right to lease land plots is also transferred to a new owner with a moderate re-registration fee. Land tax, as discussed below, is charged as a fixed amount of Uzbek Soum (UZS) per hectare. As the period of lease is indefinite, the state could at any time repossess land from enterprises, compensating the value of building and relocation costs, which would be calculated by the state.
Source : PWC