Buying a House or Property in Bulgaria

The house buying process in Bulgaria involves property agents, public notaries and state institutions including the Bulgarian Inland Revenue and the Bulgarian Registry Agency.

Foreign citizens may buy an apartment in Bulgaria, but they may not buy a house with land, or land, unless they have established a company in Bulgaria. Since Bulgaria's accession to the EU changes have been forecast. Laws are going through the Bulgarian Parliament at the present time to make changes to the Bulgarian constitution (2009).

Finding a Property

A property search is usually carried out with the help of an estate agent, although finding a property without one is also possible. Most properties advertised on the Internet and in specialised newspapers are offered by estate agents.

Internet search for properties

Do not trust an Internet source unless it is a reputable agency's website or a justified source as there are hundreds of pages that provide information uploaded by homeowners themselves.

A trustworthy website will usually provide contact details of the owner, agency and there will be numerous photographs of the properties advertised. Property websites will usually have information in English and other European languages.

Here are some useful property websites:

• Imoti BG
• Imot.bg
• Imoti.Net

Local real estate newspapers and other newspapers

Local and national newspapers have a daily or weekly updated classified advertisements section for properties.

• Search in the Classified section under Продава (For Sale)

Some big towns have their own local property newspaper which provide thousands of classified advertisements daily or weekly, for example Sofia Properties (Софийски имоти).

Estate Agencies (Агенции за недвижими имоти)

Estate agencies may ask the potential buyer to sign an exclusivity contact with them although it is not obligatory to do so. If signing a contract with an estate agency, the deal must be arranged by that agency exclusively. 

Estate agencies provide a variety of services to buyers, starting from the property search, arrangements for viewing property, providing the necessary documents for signing a preliminary purchase contract, purchase contracts and all the necessary arrangements with a Notary Public for the actual purchase procedures. Most reputable agencies provide help in obtaining a mortgage from a bank. 

Most estate agencies provide help in the establishment of a Bulgarian company, which is required when buying a house with land or a land plot for a further development.

Professionals Involved in the Property Purchase

Estate agents/ agencies (Агенти/ агенции за недвижими имоти)

Estate agents usually get their commission from the buyer only and the commission fee can vary considerably. The usual commission fee in big cities is two percent of the property price, but the commission of a holiday house in a popular resort can be ten percent of the price.

Public Notary (Нотариус)

The Public Notary is the person who certifies that the purchase is legally carried out. The Notary Chamber of Bulgaria is always involved in the final stages of the purchase procedure. 

Once all the required documents have been collected, the buyer and the seller agree to a date and time when the actual purchase deal is conducted Then appointment is made at the relevant Notary's office.

The Notary then issues a document called a Notary Act (Нотариален акт), which legalises and confirms the change in ownership and provides the new owner with all the legal rights to the property.

All the state fees due for the property acquisition are usually paid to the Notary who registers the deal in their capacity as licensed Public Notary. The amount due for a property acquisition is two percent of the price and this is paid only once.

As well as the state fees, the buyers and sellers must pay a Notary fee, which is usually shared equally between the two parties, unless a different arrangement of the percentages has been agreed to. 

Notary Fees in leva (2009):

Mortgage brokers (Кредитни инспектори по ипотечни кредити)

Bank officials, or mortgage brokers, will also charge the buyer a set fee for the arrangement of a mortgage. This will vary from bank to bank, but the usual fee is about €200. An additional annual fee is due, which amounts to one percent of the credit.

Purchasing a Property

In general the procedure for buying a property in Bulgaria is as follows:

Once a property has been chosen and the buyer and seller agree on a price it is advisable to hire a lawyer who will check the property with all the institutions involved. This includes a check of the Title Deeds, and of any taxes and mortgage installments due by the owner. The lawyer ensures that all the necessary documents for the completion of the purchase are available, arranges the conditions of the purchase contract, draws up the preliminary contracts and final contract. 

The buyer signs a preliminary contract (Предварителен договор) to secure the property and pays a deposit to the owner. This is usually ten percent of the price of the property and it is not unusual for a buyer to be asked to provide the money in cash. The preliminary contract contains all the conditions of the sale. The next step is to set a completion date for the purchase. It is also recommended to conduct a survey in the case of a resale property.

When buying land or a property with land, the buyer will also have to register a company in Bulgaria.

Completion date

The purchase of the property is finalised at the Public Notary office and the rest of the sum due is at this point. The Notary then issues the Notary Act with the name of the new owner. Most sellers and buyers agree on the period of time the seller has to vacate the property. But ownership of the property is received once the contract is signed in front of a Public Notary. The Notary Act which certifies that the buyer owns the property can be obtained from the Notary office a few days after signing the contract.

Registering a Company in Bulgaria to Buy Property with Land

The services of a lawyer are required to register a company in Bulgaria when buying property with land. The lawyer registers the company and arranges for all the documents to be drawn up appropriately, with a licenced translation in the language required.

The buyer must:

• Choose a name for the company
• Open a Capital bank account and with a minimum deposit of 2 leva (note that there are additional bank charges for opening or closing an account) 
• Provide copies of their identity documents, depending on the country of origin some documents may have to be additionally certified with an apostille
• Provide a criminal record proving that they have never been declared bankrupt and that they have never been sued

The lawyer then prepares an Application for Establishment of a Company (Заявление за вписване на фирма), a Standard Declaration to show no financial debts or restrictions are imposed on the buyer, Articles of Association of the newly-established company (Учредителен акт на фирмата) and a Declaration with a specimen of the person's signature (Спесимен).

Once the company is established the company owner receives a Decision for Establishment of a company (Решение за учредяване на фирма), which is then used to register the company at the Registry Agency (Агенцията по вписванията) of the Ministry of Justice. With this registration the company enters the system of registries for social security and tax in Bulgaria.

Once confirmation of the company's registration is received, the official stamp of the newly-established company must be ordered from a publishing house or a book store. Look for the following sign: Изработване на печати на фирми. The company stamp can only be issued only after it is legally established; the stamp should be used on all official documents.

Taxes Due after Purchase

Within two months of the purchase the new owner must declare the property at the Local Taxes Office (Местни данъци и такси) of the corresponding local Town Hall (Община). Bring the Notary Act and proof of identity so that a declaration can be filed with a copy of these. 

The state fee for property acquisition is two percent and can either be paid by the Public Notary or by the new owner at the Local Taxes Office. 

Rates for annual Council Tax and annual Property Tax are decided on by each municipality and vary considerably from one municipality to the next. Generally, they are generally not very high, with annual Property Tax and Council Tax for a one-bedroom flat in Sofia not exceeding €150.

Owners of agricultural land and forests that have no building do not pay Property Tax. The law is to change in a few years, but for the time being no tax is due for such properties (2009).

Related Information

• See AngloINFO INFOrmation Page, Buying to Build, Building Permissions and Renovations
• See AngloINFO INFOrmation Page, Starting a Business in Bulgaria

 

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Information supplied by Milena Ivanova, MY PRO EOOD, Bulgaria, Translation services
e-mail / e-mail, Tel: +359 888 122 891