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Beinh on this page probably suggests that you also think that the Bulgarian property market has a lot to offer, and compared with other European destinations provides exceptional value for money.
Now that Bulgaria is an EU member, the property market is attracting even more attention and there is an increasing number of people wanting to buy second homes, investment properties or even emigrate.

Is it obligatory to set up a Company?

At the time of writing (2008) non-Bulgarians are not allowed to own land, as individuals. The most common method 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. This situation is due to change in 2014, when EU citizens will have the right to buy land.

If your purchase includes land, a Limited Liability Company (OOD) will need to be formed.

What do you do to set up a company?

This is not as formidable a process as it might seem. You don't even have to go to Bulgaria, but certain legal requirements have to be met, and as long as the required documentation is correctly completed (may need a trip to the Bulgarian embassy in London) the company can be setup with little effort on your part.

A company bank account is opened with a minimum of 5,000 leva, which can be withdrawn following the company formation.

What it costs to buy a real estate in Bulgaria?

Real Estate Taxes

The transfer of real estate is subject to notary and municipal fees. The notary fees (1%) and municipality fees (2%) are paid based on the Tax Evaluation amount as stated in the Notary Act, in a similar way to the payment of Stamp Duty in the UK.

Local taxes and rates

The owner of a building or a plot is obliged to pay a property tax. Where a building is built on a State or municipal plot, the value of the plot will also be included in the tax base. The tax is equal to 0.15% of the book value of the property.In addition to the property tax, owners also pay waste-collection fees. These fees are determined when you register your ownership with the municipality, which should be done within 60 days of completion. Small fines are levied where this registration is done after 60 days.

Value Added Tax

Transactions involving land and lease of property for residential purposes are exempt from VAT. All other real estate transactions are subject to VAT (currently 20%) assuming that the seller is VAT registered. The buyer is entitled to a VAT refund, provided that he is registered for VAT purposes.

Running Costs

If you buy an apartment, remember to take into account the additional cost of annual maintenance and management fee. This covers the insurance of the building, plus maintenance of the public areas such as communal gardens and swimming pool (if there is one), caretaking and security. These costs are normally based on the size of the apartment.

Buying Off-Plan

If you are buying an off-plan apartment, the process is normally along the following line:

you pay a reservation fee (1-3000 euros), normally non-returnable
you sign a preliminary contract and pay the first instalment of an agreed payment schedule (*)
make your stage payments throughout the build
make final payment, sign the final contract (Notary Act) in the presence of a notary to effect transfer of the property

initial payment: 30%
foundation complete: 20%
roof complete: 20%
building finished: 30%

Discounts may be given if you pay more than required up front.
Variations that you should be aware of involve:

the Tax Evaluation amount, which is to be entered on the Notary Act
whether the price includes VAT, and if so, on what proportion of the price VAT is payable

These issues should be resolved by your solicitor before you sign the preliminary contract.

Disclaimer

We strive to keep the information provided on our website accurate and up-to-date. However, we will not be liable to any person for any information supplied on this website. We cannot be held liable for any consequential loss resulting from the information provided here. Any decision made in relation to the purchase of goods and/or services as a result of information obtained from this site is your sole responsibility.



Български
Buyers Info We try to explain what is involved in buying real estate in Bulgaria... Beinh on this page probably suggests that you also think that the Bulgarian property market has a lot to offer, and compared with other European destinations provides exceptional value for money. Now that Bulgaria is an EU member, the property market is attracting even more attention and there is an increasing number of people wanting to buy second homes, investment properties or even emigrate. Is it obligatory to set up a Company? At the time of writing (2008) non-Bulgarians are not allowed to own land, as individuals. The most common method 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. This situation is due to change in 2014, when EU citizens will have the right to buy land. If your purchase includes land, a Limited Liability Company (OOD) will need to be formed. What do you do to set up a company? This is not as formidable a process as it might seem. You don't even have to go to Bulgaria, but certain legal requirements have to be met, and as long as the required documentation is correctly completed (may need a trip to the Bulgarian embassy in London) the company can be setup with little effort on your part. A company bank account is opened with a minimum of 5,000 leva, which can be withdrawn following the company formation. What it costs to buy a real estate in Bulgaria? Real Estate Taxes The transfer of real estate is subject to notary and municipal fees. The notary fees (1%) and municipality fees (2%) are paid based on the Tax Evaluation amount as stated in the Notary Act, in a similar way to the payment of Stamp Duty in the UK. Local taxes and rates The owner of a building or a plot is obliged to pay a property tax. Where a building is built on a State or municipal plot, the value of the plot will also be included in the tax base. The tax is equal to 0.15% of the book value of the property.In addition to the property tax, owners also pay waste-collection fees. These fees are determined when you register your ownership with the municipality, which should be done within 60 days of completion. Small fines are levied where this registration is done after 60 days. Value Added Tax Transactions involving land and lease of property for residential purposes are exempt from VAT. All other real estate transactions are subject to VAT (currently 20%) assuming that the seller is VAT registered. The buyer is entitled to a VAT refund, provided that he is registered for VAT purposes. Running Costs If you buy an apartment, remember to take into account the additional cost of annual maintenance and management fee. This covers the insurance of the building, plus maintenance of the public areas such as communal gardens and swimming pool (if there is one), caretaking and security. These costs are normally based on the size of the apartment. Buying Off-Plan If you are buying an off-plan apartment, the process is normally along the following line: you pay a reservation fee (1-3000 euros), normally non-returnable you sign a preliminary contract and pay the first instalment of an agreed payment schedule () make your stage payments throughout the build make final payment, sign the final contract (Notary Act) in the presence of a notary to effect transfer of the property () Payment schedules vary greatly, but typically would be something like: initial payment: 30% foundation complete: 20% roof complete: 20% building finished: 30% Discounts may be given if you pay more than required up front. Variations that you should be aware of involve: the Tax Evaluation amount, which is to be entered on the Notary Act whether the price includes VAT, and if so, on what proportion of the price VAT is payable These issues should be resolved by your solicitor before you sign the preliminary contract. Disclaimer We strive to keep the information provided on our website accurate and up-to-date. However, we will not be liable to any person for any information supplied on this website. We cannot be held liable for any consequential loss resulting from the information provided here. Any decision made in relation to the purchase of goods and/or services as a result of information obtained from this site is your sole responsibility.

Buyers Info