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 Buying a House or Property in Bulgaria

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PostSubject: Buying a House or Property in Bulgaria   Tue Sep 15, 2009 12:48 pm

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Buying a House or Property in Bulgaria;


Foreigners Owning Property in Bulgaria - The Law!

Foreign parties can buy property but not the land it is built on. The system used most frequently by foreigners to buy property with land is setting up a Bulgarian company. Being a Bulgarian entity, the company would legally own the land and the buildings.

The law is set to change eventually with the entry of Bulgaria into the European Union in January 2007. This is one of the reasons why Bulgarian property is so relatively cheap compared to Western and Central Europe. As it stands the ruling in place right now dictates that EU citizens will have the right to buy land in 2014, but in the meantime a company is still needs to be in place for land ownership.

The overview is:

‘If purchases include land a Bulgarian Limited Liability Company (EOOD or OOD) will need to be formed’.

This of course is not a difficult process but requires the services of a solicitor or a good agent to complete.
How To Set up a Limited Liability Company

Firstly. the company owners will be liable for all the company's business, transactions and ongoing conduct.

This is in conjunction with the value of their shares in the company's registered capital. All articles of Incorporation are prepared read or understood then signed by all shareholders.

A company bank account has to be opened to collect all the capital, (shares). The minimum amount of share capital that is required is currently 2 leva. These funds can be withdrawn once the company is registered.

From the moment it is added to the Commercial Register the company is a active. The entry of the company is made upon the instruction of a district court decision for the incorporation.

The Documents required for the registration of a company with the court are:

* Articles of Association
* Proof of registration of a unique name
* A memorandum for appointment of Directors
* Proof that the registered capital has been paid
* Declarations from each shareholder
* Application for recording the incorporation in the court
* Specimen signatures of the managers

All Bulgarian legislation and company formations are published in ‘The Bulgarian State Gazette’ which is the official state media.

However, this is not the end of the process. Your new company has to be registered with Bulstat ( Part of the National Recording Agency) that will issue the company with a registration number.

It can take anywhere between a few days to a few weeks to process the formation of your Company.

You need to allow between €500 - €700 in charges made in conjunction with the formation and registration of your new company.
Summary of Charges Levied When Purchasing Property
Real Estate Tax

Corporate tax aside, no other taxes are levied on the transfer of real estate property. However, the transfer is subject to notary and municipal fees.

The amount of notary fees you have to pay is calculated using a sliding scale on either the buying price or the tax valuation of the property whichever is the higher.

Payment of purchase tax has to be made to the municipality in which the property is situated upon completion. This is based upon 2% of the buying price of the property. Look at it like Stamp Duty in the UK.
Local Taxes and Rates

Property tax is a liability the owner of a building or a plot is obliged to pay. The value of the plot will also be included in the tax base where a building is built on a State or municipal land.

The tax is basically 0.15% of the book value of the real estate but arable land is exempt from this.

Owners also have to pay for waste-collection fees in addition. All these fees are assessed at the time of registration with the municipality. You should be aware that fines are imposed where this registration is not completed within 60 days of purchase.
Value Added Tax (DDS)

Purchasing land and leases of properties for residential purposes are totally void of liability to VAT. The exception to this is if you purchase a new build from a developer.

Other real estate transactions have a statutory VAT amount to pay at the standard rate of 20%. This is of course assuming that the seller is registered for VAT.

The buyer is entitled to a VAT refund, provided that it is registered for VAT purposes.
In Conclusion

This is merely a summary which is meant to give you an overview of what purchasing a property involves.

Finding a real estate agent that has your interests at heart and who you can come to trust is the best advice that can be given. There are some about!

Finding one is invaluable in all respects in helping you through all of the procedures, and not least to help you find the property of your dreams.

Doing your research before you travel to Bulgaria and familiarising yourself with the procedures may save you much time and money at the end of the day.

This is only a guide please ensure you check all facts with a qualified and registered Solicitor/Notary

Updated 10 May 2011

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PostSubject: Re: Buying a House or Property in Bulgaria   Mon Sep 20, 2010 2:51 pm

Just a little note for those who don't know?

Regulated Versus Unregulated Land

As you view plots of land in Bulgaria , you will sometimes find that the agent uses terms such as 'regulated' and 'unregulated' land.

If you are viewing unregulated land, then this typically means that the authorities have not marked that area for development. It does not mean that you cannot build there, but you would need to go through a legal process to convert the land to 'regulated' land. Regulated land, therefore, means that the land has been marked for development (e.g. building).

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PostSubject: Regulated Land   Tue Sep 21, 2010 6:02 am

Can someone enlighten me on the issues on regulated and unregulated land.Say for instance l am interested in a property that has a huge amount of land.And if part of that land has been declared from the authorities as regulated.Does this mean the owner of that land has no say in the matter when the time comes for it to be built on.And also does this mean the owner of that land will have it taken away from him by the authorities for the building project to commence without any money paid to the landowner.

A plot that has been designated as regulated while other plots of land that is unregulated confuses me.What are the advantages and disadvantages to having owned land that is regulated or unregulated
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PostSubject: Re: Regulated Land   Tue Sep 21, 2010 6:50 am

If you own a property that has a large plot of land, and some of this land has been 'regulated', then you could always split off that part and sell it for building.

To put things basically, 'regulated' means it has outline planning permission. Unregulated, means you have to go through the process of obtaining the planning permission prior to being able to build on it.

Hope that helps!
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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Sep 22, 2010 6:50 am

Quote :
It would be good for newcomers to bg to have a checklist eg,
register company at bureau, and at municipality, register vehicle and trailer with Kat and municipality
change ownership at elec co, tel and water, find a good accountant.
do not pay exhorbitant amounts to estate agents to do all this for you, most of it you can do yourself, and get yourself a bulgarian friend who will help you readily.
no doubt there is plenty more suggestions other members can give.
don't let all the red tape put you off it is all worthwhile

As a newcomer that is interested in buying a property,but knows of no one in the area to help them seek the guidance one needs to avoid such sinister traps is very worrying.
How can one avoid the agent fee's if one has a language barrier problem and who not to trust.You say most of it can be done yourself,but to overcome the communication problem l would have thought one would need someone with them to speak on their behalf to help them through the buying process.
How much do agents charge for their commission and also how much do the solicitors charge for the buying process as well as any other costs l haven't mentioned.Can all this be avoided if l knew someone l could trust to help me on my behalf going through the buying process.

l am a little worried about being yet another victim that has fallen foul to the non compassionate minds.l need help on the buying process.
1/Would it be advisable to rent out first to get to know others in the area and to seek out several opinions from the ex-pats.
2/Which solicitor would you class as the most trusted and who would you strongly recommend that would do the work thoroughly without any of the insulting excuses l have heard of and experienced here in Turkey.
3/Can someone really do it on their own without a local speaking on your behalf.
4/The most important question is:ls there proper non corrupt regulative boards in place to complain to and seek the right proper justice if things went pear shaped against the buyer.

P.S..can l employ someone in Bulgaria from here in Turkey to work for me going through the buying process that is trustworthy

lt's just that l am having doubts now about one property l am interested in due to things just do not add up here
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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Sep 22, 2010 7:49 am

Some very good and important questions there and I'm sure you will get the answers on here good luck you do right to ask g

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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Sep 22, 2010 8:53 am

snail wrote:
Quote :
l am a little worried about being yet another victim that has fallen foul to the non compassionate minds.l need help on the buying process.
1/Would it be advisable to rent out first to get to know others in the area and to seek out several opinions from the ex-pats.
2/Which solicitor would you class as the most trusted and who would you strongly recommend that would do the work thoroughly without any of the insulting excuses l have heard of and experienced here in Turkey.
3/Can someone really do it on their own without a local speaking on your behalf.
4/The most important question is:ls there proper non corrupt regulative boards in place to complain to and seek the right proper justice if things went pear shaped against the buyer.

P.S..can l employ someone in Bulgaria from here in Turkey to work for me going through the buying process that is trustworthy

I fully understand your concerns and you are right to ask!! most don't and then wonder why it all went wrong?

1/Would it be advisable to rent out first to get to know others in the area and to seek out several opinions from the ex-pats.

In my opinion I would say definitely yes, that way you will get a feel for the Town/village you are considering and also what the neighbours are like along with the general life of the Town/village because they will all be different.

Which solicitor would you class as the most trusted and who would you strongly recommend that would do the work thoroughly without any of the insulting excuses l have heard of and experienced here in Turkey.

Good question, there are loads of Rea's and lawyers in Bulgaria some of which I would say are good and others I wouldn't go near so it's a bit of a mine field, perhaps a good way is to look at recommendations from other buyers and take it from there, I used a company called Bulgarian Real Estate online a very well established company and run by English people I never had any problems at all and even after the sale I still get support from them as I require, so do ask around.

Can someone really do it on their own without a local speaking on your behalf.

Personally I wouldn't do anything like this alone, even with a translator.


The most important question: Is there proper non corrupt regulative boards in place to complain to and seek the right proper justice if things went pear shaped against the buyer.

Not as such you won't have anything like you would get in the UK yes you can make complaints but more often than not it can take years before you get any justice if at all, which is why you should use a reputable REA to do all the work for you which doesn't take very long and in my case was painless.

Can I add to this that I would never buy a property without seeing it first, I wouldn't buy a property vie Ebay, and most importantly if you do go it alone make sure that you have your own independent lawyer, translator etc this can be difficult because there are those out there who can make it look like you have. this is why an REA is generally the safe option but do be careful who you choose.

Good luck and I'm sure others will add to this.

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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Sep 22, 2010 9:47 am

I think what nets has said here is all good advice but common sense really lets be honest you wouldn't buy a property in the UK without checking it out first and most importantly making sure your happy with the locals and facilities, I have some friends who bought a house without checking it first and yes it was idyllic until the winter came and they were house bound for 5 weeks because of the snow so don't assume that the services in Bulgaria are the same as the uk, I don't know your age or anything about your health but you will also want to know how far away you are from a good medical service, then there is the dreaded power cuts which happen in all parts of Bulgaria especially in remote area's there is a lot to consider so don't rush into it and if you can rent first for a while and make sure its what you want that would be a good idea, you may find that some sellers will let you try before you buy which is a very good way of finding what your looking for, most properties in Bulgaria will come with more land than you can cope with so I don't think you will have any problems there unless you choose a Town, you may want to look at schools? below is something I used and as far as I know its still applicable? it might help you understand the process, I do hope you find what it is your looking for but do be careful and its not just the Bulgarians you need to be aware of!! Bulgaria has its problems just like anywhere else but its such a beautiful place to live. All the best to you with your search.

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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Sep 22, 2010 11:07 am

Tell me have you ever been to Bulgaria and if so how long for? sorry if this sounds abrupt it isn't meant that way I'm curious to know more about how you are doing your search and what knowledge you have of the Bulgarian way of life and the property market in Bulgaria
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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Sep 22, 2010 11:55 am

I think this is all very good advice and testing the water first is a good way of making your mind up infact that's exactly what I'm going to do with a property I have my eyes on I would take your time its taken me a year to find a house that I like in the right place. good luck whatever you do
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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Sep 22, 2010 12:02 pm

Quote :
Tell me have you ever been to Bulgaria and if so how long for? sorry if this sounds abrupt it isn't meant that way I'm curious to know more about how you are doing your search and what knowledge you have of the Bulgarian way of life and the property market in Bulgaria

Not abrupt at all.After all,the only way to help one another is to come straight out with it.
l have never been to Bulgaria and didn't even think about the country when someone told me years ago about the Turkish property at such good value and how the life style is a lot more laid back.Of course by experiencing the lifestyle here,l would disagree with all that what l was told.
So!,what l am doing now is using the forum to guide me to the path where l will be met with honesty and a helping hand to show me the do's and don't of the buying process in Bulgaria so not to be caught out again like l did in Turkey.At least l now have a computer to help me on this one,where years ago l never owned one.This is how l am doing my research at the moment until l am in a position to come over and view the area for to buy.But first l'll rent to see if l like the place.
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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Sep 22, 2010 12:18 pm

Here is some useful information to new buyers

Why Involve an Independent Lawyer When Buying Property Abroad

Assuming you are a non-seasoned veteran of international property purchases, chances are the kind offer will be taken up, and you’ll find yourself potentially inappropriately represented from a legal point of view. The fact of the matter is, you need your own solicitor or notary when buying abroad, and you need one who only has your interests at heart with regard to the sale.

So, why involve an independent lawyer when buying property abroad? Because the entire security of your purchase and subsequent ownership status depends on it.

Buyers of property abroad need to have independent legal representation. I.e., never take the advice of a developer or vendor when seeking a lawyer to oversee and manage a purchase contract. What’s more, ensure that your lawyer is proficient in matters pertaining to real estate and the ownership of local property by foreign nationals.

Overseas property purchases and now know how and why one does things very differently.

In terms of the scams and schemes, underhand dealings and issues that many overseas buyers are facing, few are at the extreme end of the scale where they have lost everything to an unscrupulous agent or vendor, the majority of cases ‘simply’ involve the fact that legal advice given has been very poor indeed. When it then comes to the point when the new buyer wants to resell the property, they find all sorts of outstanding issues that were never resolved by their lawyer at the outset and which now stand in the way of a smooth sale. As a worst-case scenario this can render a property unsellable, but most likely it wipes money off the asking price or reduces the final amount that the new owner walks away with.

So ‘why involve an independent lawyer when buying property abroad?’ The answer of course relates to the fact that you want to ensure everything at your point of purchase is done properly and you receive the advice that you need.

Once you have done your homework and found a decent lawyer to help you, you should find that the contract they draw up protects you from the outset. The contract should be worded and crafted so that if anything untoward is found to be an issue with the sale, you can withdraw from it without penalty. They should also be able to advise you about how to structure the purchase from a legally qualifying tax advantageous point of view, and they should conduct extensive searches against the property and its title to ensure that you are not inheriting any debts or problems and that the vendor has the right to sell to you.

Finally, take your time investing in a lawyer – the right one will be worth their weight in gold. Get it wrong and you will rue the day you ever thought about buying a home overseas.
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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Sep 22, 2010 1:49 pm

Very useful advice bigsavak.Thank you for that.
Can you ask answer this for me.lt seems when l mention about buying l need to set up a company to purchase a property.ls this normal procedure in Bulgaria or is it just a formality for future reference if one might think of running a "
say for instance"
a b&
b or something that can be connected to the property as a business later on.

l really do not understand what it means by setting up a company when purchasing.Can one buy without setting up a company
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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Sep 22, 2010 2:02 pm

snail wrote:
Very useful advice bigsavak.Thank you for that.
Can you ask answer this for me.lt seems when l mention about buying l need to set up a company to purchase a property.ls this normal procedure in Bulgaria or is it just a formality for future reference if one might think of running a "
say for instance"
a b&
b or something that can be connected to the property as a business later on.

l really do not understand what it means by setting up a company when purchasing.Can one buy without setting up a company

I hope this information is of help to you as far as I know nothing has changed? this will explain the need for a compnay to be set up, you can not purchase a property until this is done as explained below.


At the present time, the Bulgarian national constitution actually prohibits foreign nationals from directly owning land in Bulgaria. With that said, the governmental leaders in Bulgaria are in the process of changing the country's constitution to allow for the direct ownership of land in Bulgaria by foreign individuals. The proposed constitutional changes likely will not be in effect until 2014 or 2015.

Understanding that a foreign national cannot directly own land in that country at the present time, this does not mean that a foreigner cannot own property in Bulgaria "
indirectly."
In other words, if a person is interested in owning land in Bulgaria, there is an additional step that he or she will need to take in advance of making such a purchase and of assuming such ownership of real property.


Yes you can run a business from home but you will need to fulfil the requirements of the specific legislation
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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Sep 22, 2010 2:11 pm

As bigsavak said, a foreigner does not have the right to 'own' land in Bulgaria, but the way round this is to set up a Bulgarian Company, and the company owns the land (and house). This is normal procedure for anybody buying property with land in Bulgaria.

If you buy an apartment, this does not apply.

If you don't want to actually run a business, then the Bulgarian company can be 'non-trading' and submits a 'zero' return every year to the tax authorities (an accountant can do this for very little money for you).

If at any time you do want to trade (gites, bed and breakfast or other), then you do need to submit regular tax returns for the company every year.
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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Sep 22, 2010 2:53 pm

All very useful and very important advice when your buying in Bulgaria T
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