Procedure for buying a property in Bulgaria
Bulgarian law does allow foreigners to buy property in the country but with a few limitations.
I. BUYING AN APAPRTMENT WITHOUT LAND:
If you are buying an apartment, in most cases it will not be sold with the land the building stands on so the procedure is very straight forward and the apartment can be signed over to you as a private individual.
II. BUYING A PROEPRTY WITH LAND:
Up to the present time, foreign nationals need to set up a Bulgarian limited company in order to be able to buy a house with land. This is because under Bulgarian constitutional law, foreigners are not allowed to own land in Bulgaria. The government’s answer to this is that a company be set up which will own the property and the land as an asset and you will own the company.
Over the past years we have helped many of our clients set up Bulgarian limited companies and we would like to briefly present you the most important steps of the process, now.
First of all you need to choose a name, check in the register if it is available, and reserve it. Then you need to appoint the Director (Shareholder) of the company. If you have just one shareholder we will register ‘EOOD’ on your behalf. In case you have more than one shareholder, then you need to set up an ‘OOD’. The procedure is the same and the fees are the same. We recommend that you discuss with us and our lawyers before you decide on which type of Limited Company is best for you.
Our solicitor will prepare all documentation ready to open a Bulgarian company using details from your passport and your address. You may do this in person when arriving to Bulgaria or by authorizing us to do this through signing a Power Of Attorney. (This would need to be signed and stamped at the Bulgarian Embassy in your country of origin).
100 BG Lev needs to be deposited into a company bank account. This represents the starting capital of your company, which stays there until registration (one to two weeks). When the company is formed the 100 leva will be used to cover the expenses for the opening and closing of the account.
300 Euros are the fees related with setting up of the limited company. These charges include lawyers’ fees including expert check and preparation of all the documents for the company, go to different services to register it and arrange all procedures and documents, plus all papers officially translated and stamped into English and posted back to you.
The established company can now buy the property and will own the land. You will be the owner of the company and, respectively, the owner of the property and the land.
TRANSFERING A PROPERTY WITH LAND:
After choosing your dream property (either based on our website pictures or after completing a viewing trip) and making the full payment to our bank account we will then proceed and acquire the property ownership rights for you, checking all the legal documentations and ownership papers and then you become the new owner.
After all documents have been checked by our lawyer the new notary act in your company name will be prepared and the property will be transferred into your company name.
Property transferring expenses: You will have to pay all conveyance fees related to buying a home in Bulgaria and only the solicitor can state the exact amount for your chosen property. This will include: Land/Property tax, lawyer fees, notary fees, court taxes. Land tax and notary fees depend on the declared value of property, which by mutual agreement between buyer and seller can sometimes be different from the price entered on document of sale. If both buyer and seller agree, it’s quite common for a lower declared price to be entered on the Contract of Sale. This can lessen the Capital Gains Tax liability for the seller and save the buyer a considerable amount in Land Tax, especially on the more expensive properties. Unless customers advice different the government valuation tax will be written on the deeds.
Property transfer fees vary from region to region and are dependant on different variables including solicitors charges and house prices.
After you have completed the above steps you are ready to move to your new house. The process really is easier than it sound and we can take care of every step leaving you free to enjoy all the Bulgaria has to offer.
IMPORTANT NOTICE:
All foreign buyers purchasing real estate property must be aware that in Bulgaria there are such terms as "tax estimation price" and "purchase price". The "tax estimation price" (similar to "ratable value" in UK) is for the purposes of real estate taxation and is much lower than the actual selling (purchase) price.
Most of the Bulgarian property owners (vendors) wish that the "tax estimation price" (ratable value) is written in the title deed, and not the selling (asking) price which the buyers are paying, so due to this practice there might be discrepancies between the price you are paying and the price written in the title deed. This is because of various reasons and Bulgarian Property Advisors Ltd can not be responsible for it. Even if the property buyer wishes that the purchasing price is written in the property title deed we can not guarantee that this will be accepted by the vendor.
OBLIGATIONS RELATED TO HAVING A BULGARIAN COMPANY:
You need to register your Bulgarian company in order to acquire land, but you are not required to carry out any commercial activity. Therefore the company maintenance cost is minimal, around 125 GBP per year. All you need to do is to file a tax declaration at the end of the year. We will assist you finding a professional accountant after the sale, which will take care of your yearly company tax reports.
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