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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 These funds can be withdrawn once the company is registered.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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GinaA
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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Oct 16, 2013 10:21 am

This would depend on the agent you buy with and all the other legal stuff but there is no reason why it should take any longer than a week, I've never known that the owners can stay in the property for upto a month but as the buyer you will generally call the shots.
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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Oct 16, 2013 10:25 am

A week!!!!

Good.
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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Oct 16, 2013 10:25 am

It took us only 4 days and I don't know anything about the month stay for the seller.
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Daisy
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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Oct 16, 2013 10:36 am

I would say a month is more realistic but I do know of folk who have done it all within a week but they did have to pay for that speed. s
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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Oct 16, 2013 10:39 am

Took us four weeks from viewing to completion.

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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Oct 16, 2013 10:40 am

It took us 20 days from our offer being accepted to completion but I do think depending on the seller it could be a lot quicker or slower.
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meandmine
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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Oct 16, 2013 10:46 am

A comfortable 4 weeks for us.
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Noddy
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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Oct 16, 2013 11:10 am

About 6 weeks for us but we weren't in any rush.
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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Oct 16, 2013 11:17 am

Every purchase is different, the same as the UK, the biggest potential hold-up is there could be many names on the Title Deed (due to inheritance matters usually) and this could lead to conflict among these people, who owns what, how much they want etc etc etc. Get a good independent Lawyer is my best advice to anyone buying, don't rely on the one offered by the agent, or worst, the seller.
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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Oct 16, 2013 11:27 am

Edna Bira wrote:
Every purchase is different, the same as the UK, the biggest potential hold-up is there could be many names on the Title Deed (due to inheritance matters usually) and this could lead to conflict among these people, who owns what, how much they want etc etc etc. Get a good independent Lawyer is my best advice to anyone buying, don't rely on the one offered by the agent, or worst, the seller.

This is sound advice and well worth the extra effort for piece on mind and a smooth transaction.
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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Oct 16, 2013 11:36 am

Well it all depends on where you are buying it from If you are in BG, you view, make an offer next day they confirm you offer and set the ball rolling - so it will take them about a week or so. If you are in UK as we were, than it will take about a month or more. I don' know if you still have to visit the Bulgarian Embassy any more but you could only do that on Thursdays between 9am and 11.30am. But that may have all changed now due to not buying as a company.

This may sound nagitive but I am just pointing out the fact as they are for us now.... I wish I had taken my own advice: If I had my time over again I would rent a house in an area I was considering moving to and travel to different parts of BG to view and rent . There are so many places to choose from and things to consider like amenities, shops. bars, places to eat, inernet, tv, distance to the town, hosptal, socializing winter, snow, rain, the weeds, the roads the language and much more. We have been in BG now for 3 months and although I love it here very much, I am finding it very difficult without any of the above. I am getting very restless now and begining to see things in a different light. I could not live in our village in the winter it is dead. You can go for a week without seing a soul. I keep busy with all sorts of things but I must admit I am looking forward to going home. So think very carefully about where you buy. If you are in a town or an active villiage I would think things would be different.

Sincerely hope you find your dream home and everything you need. wishing you the best of luck

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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Oct 16, 2013 11:52 am

3 weeks for us but as already stated there are many different things to take into account and all agents and lawyers work differently
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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Oct 16, 2013 12:11 pm

Back in 2004 when I bought it was all so different. I flew from Greece to Bulgaria, saw about 6 houses, fell for the first one and bought in a week. HOWEVER, although the Company was set up and financial matters settled it took from March to September before Completion by POA with the agent. I made a hasty visit in August to settle my fears that all was not well. It was because our village skitzas were not all correct and other surrounding neighbours had to give their consent to our land. Other than that all went to plan and we moved in in October almost to the day we are now finally returning to Britain.
Now things are much simpler without the need of a company but I suppose there could still be skitza problems in some villages which could hold things up. Every sale is individual so don't think that all sales are necessarily quick. I do find sometimes people can appear very smug on forums as if life is some kind of competition and they are at the top of the list.

By the way :Good post:Oddball.
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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Oct 16, 2013 12:15 pm

oddball wrote:
Well it all depends on where you are buying it from If you are in BG, you view, make an offer next day they confirm you offer and set the ball rolling - so it will take them about a week or so. If you are in UK as we were, than it will take about a month or more. I don' know if you still have to visit the Bulgarian Embassy any more but you could only do that on Thursdays between 9am and 11.30am. But that may have all changed now due to not buying as a company.

This may sound nagitive but I am just pointing out the fact as they are for us now.... I wish I had taken my own advice: If I had my time over again I would rent a house in an area I was considering moving to and travel to different parts of BG to view and rent . There are so many places to choose from and things to consider like amenities, shops. bars, places to eat, inernet, tv, distance to the town, hosptal, socializing winter, snow, rain, the weeds, the roads the language and much more. We have been in BG now for 3 months and although I love it here very much, I am finding it very difficult without any of the above. I am getting very restless now and begining to see things in a different light. I could not live in our village in the winter it is dead. You can go for a week without seing a soul. I keep busy with all sorts of things but I must admit I am looking forward to going home. So think very carefully about where you buy. If you are in a town or an active villiage I would think things would be different.

Sincerely hope you find your dream home and everything you need. wishing you the best of luck

I'm so sorry you feel like that Bernie, it has not been the happiest house for you. And not easy to sell and move somewhere which will suit you better. And no, you don't have to visit the Embassy.

We were careful to find an active village with plenty of (admittedly small) shops, bars and a bakery, chemist and restaurants, even a theatre, although to be honest we couldn't always see them when they were pointed out initially. Originally we were thinking small mountain village, but with advancing years it is more sensible to be in a village with good amenities and we are happy with our choice, it is still very rural. When viewing we saw some dead looking villages with one shop and not much else but a bad feeling. I think you get what you pay for, if you only want to pay a couple of thousand then you will end up in one of these villages. Then the cost of renovation is unlikely to ever be recouped should you want to sell if it doesn't work.

Sara

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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Oct 16, 2013 1:23 pm

I appreciate all the responses and information.

I don't actually consider any persons viewpoint as being negative - just realistic and subsequently necessary.

I'd probably say similar things about France. Don't buy more than 2kms out of small town. Public transport in many depts in rural areas is useless (a bus to the small town once a week)so you have to a) stay well, b) have a fully functioning car at all times c) never get old.

To say France is considered a more developed nation than Bulgaria (as a standard viewpoint) - they don't appear to be so very different.
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