Buying process in Bulgaria is very different from those in England. There are special procedures, many of which are explained in this Guide.
1 step: Find Property of our Database. 2 step: Arrange an Inspection Trip 3 step: Registering a Company if you buying a property with land 4 step: Sign a Preliminary Contract (Under Offer) and Paying Deposit 5 step: Checks on: Title Document, Debts, Deffects 6 step: Sign the Notary Deed 7 step: Become a Proud Owner of a Bulgarian Property
The Buying Process
Property Selection - when interested in purchasing a property you will initially sign a “reservation contract” and pay a small deposit of approximately 1,000 euro. The property will then be withdrawn from the market for a few weeks. Please note that in most cases this fee is non-refundable should the client choose to withdraw.
Sale & Purchase Contracts - Next the developer will then issue the client with a “Preliminary contract” which both are required to sign as a commitment to buy and sell the property. It is advisable at this point that client’s seek advice from a reputable solicitor prior to committing themselves to any financial contract. The “Preliminary contract” will illustrate the developer/builders obligations in terms of completion/timescales/design etc. Any additional requirements are agreed at this point and signed for, which then form part of the contract.For the client the contract will highlight their obligation for payment and will highlight the stages in which they are required to submit payments up to and including the completion date in front of the Notary. It will also highlight any penalties that they may incur should they have any late payments or decide to withdraw.
Property Acquired with Land - According to the Bulgarian Constitution, foreign individuals may purchase buildings/ apartments but not land. Therefore the preferred option for foreigners buying property in Bulgaria where they also wish to own the land is to set up a company which then owns the land and the buildings. The law is expected to change on this within the short to medium term with the expected entry of Bulgaria into the European Union (2007). Meanwhile, the legal option to become an owner of a property of land is to established a locally registered comany and to open up a local bank account with required minimum share capital of 5000BGN.This is a standart procedure and it is part of our legal services.
Construction & Final Completion
Usually there are one or more payment instalments to be made prior to the full completion of the property. We will notify you of the estimated payment dates.
Upon completion of the property and payment of the final instalment, the transfer of title may occur. In Bulgaria, the property registry system works in conjunction with local Notaries.
In order to take delivery of your property, you will need to sign the ‘Notary Act’. This is a standard form document transferring ownership of the property into your name.
You will receive title deeds within 7-10 days of the Notary Act from the local council. Note: If you are unable to attend the Notary Act in person, your legal representative may attend in your place by signing a Power of Attorney’agreement who will purchase on your behalf. We are able to liaise with you to arrange this.
Additional Acquisition Costs Local tax According to the Local Taxes and Fees Act, the tax payable upon the sale-and-purchase of an apartment is 2% local tax. The basis for calculating the tax is the higher of:
The apartment’s price as specified in the notary deed, and
The tax evaluation of the apartment.
Such tax is payable by the purchaser, unless the parties have agreed otherwise. Notary fees The notary fees are determined in accordance with the tariff for the Notary Fees. There are various charges but you should allow 1,500 -2,000 euro Legal fee - 550 euro Registration of a limited company ( only in case you are purchasing land) - 500 euro
Other Expenses:
Annual property taxes amount to 0.15% of the tax value of the property (usually significantly below the acquisition price);
Maintenance of your property is covered by the Management Contract and is charged at a fixed rate in euros per square metre per year.
