Even though there are some specific points that need to be considered when buying property in Bulgaria it is not as difficult as it first appears. A good agent will help you and with his guidance the process should be seamless. He should consult you through out the whole process and protect you from wasting time and money. This service should not cost you any money as his commission is paid by the vendor (this is standard practice in Bulgaria)Other costs to consider are notary fee’s and solicitor’s fee’s. In Bulgaria it is quite common to use the vendor’s solicitor to save cost’s a practice that can lead to problem’s, I would always recommend using an independent solicitor who will safeguard your interests. Once at the stage of purchasing a property all paperwork must be signed at the office of a Notary unless you can speak and read Bulgarian the Notary will insist you use the services of a trained translator. The reason for this is that it is a legal requirement that you fully understand the implications of the contract you are about to sign.

Once you have chosen a property the purchase procedure can be split into three stages.

1. The deposit – this is usually about EUR 2000, which can be paid in cash or by a bank transfer. The deposit fee guarantee’s that the property will be taken off the market and will be kept for you for about 2 weeks.

2. Preliminary Sales Agreement – The developer will provide a signed and stamped sales agreement within a couple of weeks after paying the deposit. This contract lays out your’s and the developer’s obligations and will also include some basic facts eg: description of the property, price, payment methods, and final date for notary signing. The payment plans can vary but a normal schedule would be:
30 % after signing the sales contract, 40 % after finishing the construction (if the property is still not completed) and 30 % upon signing the notary deed.

3. Notary deed – this is the final document verifying your right of ownership. It must be signed in the presence of a Notary after all the payments have been made. The Notary then presents the title deed in front of the Regional Court where all ownership details are registered. The notary and government taxes are calculated at about 4% of the tax evaluation price and are paid during the transfer of the property at the Notary office. Usually in Bulgaria there is a difference between the market price and the tax evaluation price. The second one is used for the tax administration and is about 30-40% of the paid price of the property. This is the price which will normally be written into the title deed. In some cases if you prefer the developers will agree to write the full purchase price.

The next step of the purchasing process is registration of the property at the local Municipality and National Income Agency which should be carried out within 2 weeks of the notary transferring ownership. Also to comply with Bulgarian Legislation all foreign nationals must register their new property at the National Registry Agency, where they will receive a certificate and a BULSTAT card. All these registration procedures will normally be performed by your agent in cooperation with your solicitor. They will also prepare the title deed and represent your interest’s during the whole buying process including at the Notary office. Using the solicitor’s service is a requirement in order to prevent any legal problems at a later date. The normal cost is about EUR 400.

After all registration’s are finalized your agent will receive on your behalf all the documents certifying your ownership and send them to your address.

If you buy land or a house with adjacent land you have to set up a Limited Liability Company, which will be the official owner of the property. The company shareholder can be just you or any additional people you specify. The registration process takes about 2 weeks, the only thing you have to do is sign a P O A to your solicitor so that they can complete all registration procedures. According to the Bulgarian legislation there is a minimum capital requirement of BGN 5000 needed to establish a company, of which at least 70 % has to be deposited into a bank account. After the company registration is completed you can withdraw the money from your bank account or use it for further purchases and investments. This is a standard procedure which the solicitor charges around EUR 600.

In addition to this all companies registered in Bulgaria must present their balance sheets, annual accounts and prepare an annual tax report. These documents must be submitted in the local Tax Office not later than 31-th March of each year. If your company is performing any kind of activity eg: if you make any improvements on your property, related to partial or full renovation or reconstruction. If your company rents the property out and receives rental income it is considered as an active company. This means receiving or issuing, receipts, invoices, bank statements, paying the local fees and taxes an accountant can prepare all the necessary documentation. A good agent will keep you informed about your company’s financial status, incomes, taxes, expenses etc. The price for this service is normally EUR 300 per year.

All property owners in Bulgarian are subject to the Tax Legislation and have to pay annual taxes.

Whilst this might look daunting the services of a good agent will make this extremely easy. Also do not be put off by the taxes as they are minimal costs eg: a two bedroom apartment local tax per annum around EUR 90 per year.

Author Bio: The author lives both in the UK and Bulgaria and has many years of experience in the Bulgarian property market. Also he has numerous contacts in Bulgaria. For more Information visit Property Bulgaria

Category: Real Estate
Keywords: