Until the end of the Soviet era, all land in Mongolia was owned and managed by the state. When the Constitution was enacted in 1992 new forms of land and immovable property tenure became available. However, the concept of immovable property remains an important distinction in a country with a large nomadic population. 

Before undertaking any financial decision, we suggest investors seek the advice of a trusted expert real estate agent for guidance through the buying process.

Can foreigners own property in Mongolia?

Except for land, there are currently no restrictions on foreign residents or non-residents owning buildings or apartments in Mongolia. Certified copies of the buyers’ passports must be submitted to the Property Registration Office, along with the demand for a new certificate. 

Mongolian property laws were rewritten after the peaceful transition to a market economy at the fall of the Soviet Union. The new government put in place a comprehensive ‘floating freehold’ system of immovable property, allowing property owners to hold a freehold interest over the property, but not over the land on which it sits.

Despite this land ownership system, foreigners may own Mongolian apartments outright and earn rental income from them without requiring a local partner or nominee. The Home Ownership Association (HOA) framework set out in the Law on Registration of Property requires that owners of all the apartments in a building form an HOA upon the building’s completion, and the underlying land title is transferred to the HOA once the paperwork has been entered with the local district Governor’s office. 

Do foreigners need an immovable property ownership certificate?

The right to property ownership is separate from the right to land ownership and is regulated by a number of Mongolia’s laws. However, it is the Law on Registration of Immovable Property which provides legal protection to property owners - the right to own immovable property takes force immediately upon registration at the Immovable Property Office. 

Usually the application for an immovable property ownership certificate will be processed within 5 to 30 days. To begin the registration process, an individual, legal entity or associated agent must provide the Office with a notarized purchase contract and a notarized document from a recognized authority establishing the dimensions and valuation of the property, as well as other forms of ID. A standard service fee of MNT 20,000 will be charged, unless a rush delivery is requested (fee MNT 40,000). Contact details for the State Registration Authority can be found on their website.

Upon obtaining the title of a property, the owner has the commercial rights to sell, lease, transfer to another party, inherit, pledge or issue guarantee. The rights, legal protection, and registration procedure are the same for all property owners, whether they are Mongolians, foreign individuals, or companies. 

What other fees should I expect to pay when buying property in Mongolia?

Most real estate agencies do not charge buyers. In most transactions, the seller pays any commissions or fees.

Notary fees are generally around MNT 10,000 - MNT300,000 (US$5 - US$150) depending on the property value. Costs related to the notarization of the contract and registration to the District’s Immovable Property Registration Office must be paid by the buyer. 

Stamp duty of 2 percent of the declared purchase price is payable, typically split between the buyer and the seller, though this may be negotiated. Further detail on the taxes applicable to real estate purchases can be found in our guide to Mongolian property tax.

How can foreigners use land in Mongolia?

While immovable property can be owned outright by foreign investors, they can only lease land.

Land tenure is divided into three classes: Land ownership, land possession, and land usage. 

Full freehold ownership rights to land, including the rights to sell, lease and pass land to descendants, are only available to Mongolian citizens. Land possession rights are temporary licensed ownership rights which may only be held by local legal entities.

‘Land Usage’ is the only type of right available to foreigners in Mongolia.  The Law on Land allows lease of land by foreign citizens for up to 5 years, with the option to renew, and legal entities for up to 60 years.

Foreign residents who wish to purchase land usage rights must be resident in Mongolia for more than 183 days a year and, although land usage rights are available to companies, foreign registered companies must first seek permission from the government. 

Major property legislation

In respect of the real estate sector, the following laws are the most relevant according to JLL:

• The Constitution
• Civil Code
• General Law on Taxation
• Law on Registration of Immovable Property
• Law on Investment
• Law on Immovable Property Tax
• Law on Personal Income Tax
• Law on Land
• Law on Land Fees
• Law on Allocation of Land to Mongolian Citizens for Ownership
• Law on State Registration of Property Ownership Right and Other Related Property Rights
• Law on Urban Planning
• Company Law
• Law on Licencing

Source: Jones Lang Lasalle Mongolia Property Investment Guide
Mongolian Properties Real Estate Guide 2017