Buying a Property in Bulgaria...
I expect by the time you have located our web site; you will have gained knowledge from other sources. If you are still confused read on, you will find the information here more comprehensive than most and related from first hand knowledge.
Bulgarian Laws relating to Foreign Nationals purchasing Property
Bulgarian Law is unusual compared to most other European countries. The law states that an individual Foreign National may not buy and own land. But anyone who has a registered Bulgarian Company may buy whatever he chooses. Many people, especially those who have knowledge of the property purchase laws in other European countries find this quirk of Bulgarian Law daunting. I can assure it is a simple procedure, especially when one uses the services of a good English speaking Bulgarian lawyer, who will also assist with all aspects of a purchase. Maybe as we did, you are saying " I do not want to buy land, I would like a house, not a building project", but of course every house old or new stands on a piece of land, that is point in Bulgarian law.
Forming a company
Decide on a name for your company, grand, simple or amusing. Give chosen name to your lawyer, he will check that it is an available title and reserve it. With his help or alone if you have the confidence, open a bank account in the company name, deposit 5,000 Leva* and ask for a certificate to verify the fact. The lawyer will then submit your application to the District Court, two or three weeks later when the application has been processed the company name is published in the State Gazette and you become Director of a Bulgarian company. The whole process takes no more than 4 weeks.
When the lawyer receives the documents he should then :-
- Register the details with the National Insurance Institute, within 7 days.
- Register the company with the National Statisical Institute; they provide you with a Bulstat Identification Number.
- Register Company and Bank Account details with local Tax Authority
Steps 2 and 3 must be done within 14 days; all three are necessary formalities. Unless you decide to run a business under the company name you will not have to deal with these departments in the future. Your company will be classed as Non-Active.
Cost of Forming Company
800 Leva* Total. This includes Fees for registration procedures and payment to lawyer.
The 5,000 Leva* deposited in the bank can be withdrawn as soon as the company is registered and used as you wish, or left for use at a later date.
N.B. If you have serious intentions to buy, make the company set-up your first priority. If you are undecided, wait until you have found your ideal property. It is not advisable to form your company in Sofia if you hope to buy property in an area miles away, e.g. Troyan and visa versa. Bulgaria is divided into administration districts; each has a District Court in a main town within the area, the various registration processes required must take place within this district. It can be costly and time consuming for you or your lawyer to deal with required procedures miles away from base. We know, we were persuaded to form our company in Burgas, the place we first visited. The eight hours round trip from Troyan to sign and collect documents soon persuaded us to dissolve and then reform our company locally.
* 1.95583 leva = 1 euro
Buying your Property
Having found your ideal property you need to pay a deposit, generally 10% of the purchase price. For your peace of mind it is important to pay the deposit on a contract at the notary with your lawyer, the owners and accredited interpreter present. The lawyer will have previously talked you through the contract, which will state full price of property, amount of deposit, and date of completion. (Usually 4-6 weeks later) At the notary the interpreter will read everything to you in he presence of all involved, she/he will then sign the form as the law requests. An interpreter faces prosecution for misinterpreting an official document. During the ensuing weeks make arrangements to have funds available for completion. In addition to the amount required for balance of payment on the property you will need up to 5% of total purchase price to cover transaction fees at the notary, Lawyers fees and commission to the agent.
Between deposit and completion your lawyer will confirm: -
- Deed of ownership
- Size of land and boundaries
- That all family members agree to the sale
- On the eve of the completion day he will acquire a certificate from the Town hall confirming that there are no mortgages, loans or debts attached to the property.
In the unlikely event that your lawyer discovers a new fact which he feels denotes the property an unviable purchase, you will be informed and can withdraw from the procedure with your deposit returned. If you withdraw for purely personal reasons the deposit is non-refundable.
Completion
The procedure will be the same as paying the deposit and you will become proud owners of your idyllic Bulgarian home. The Local Authority will send the title deeds to your lawyer after approximately 10 days.
Apartments
This category of property does not require Foreign Nationals to set up a company.
Mortgages
This is a comparatively new phenomenon in Bulgaria; procedures are similar to the U.K We do not have first hand knowledge of this method of funding a purchase. Bulgarian friends have told us that interest rates are always variable and are inclined to mysteriously rise rather than fall. Some independent advisors suggest re-mortgaging a property in the U.K. is the safer option.
