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 Buying house, What next?

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will666
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PostSubject: Buying house, What next?   Tue Apr 19, 2011 8:18 am

Ive been looking at houses in Bulgaria ( on the internet ) for a few years now and now ive agreed to buy one near Stara Zagora , signed the first contract and paid deposit.

The seller has been very helpfull for information as has this forum, i know i need a company ( not set up yet ), and the seller has given me the names of someone who sells ready made companys ( easier as im not in Bulgaria?) etc

What i need to do now is know what i need to do next! ,

Do i just buy a ready made company? or should i get one set up?, What sort of cost should it be?
Do i need my own solicitor or can i literaly just sign and get there solicitor to register it and sort taxes out for me?, i trust the seller ( usualy a bad thing to say i know! )

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davshaz
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PostSubject: Re: Buying house, What next?   Tue Apr 19, 2011 9:49 am

Some information here about how we went about it this was the guide we followed and we had no problems :Howdy:the flow chart is just a visual aid we found.



When buying a property the buyer should instruct an English-speaker local lawyer. The usual practice is for the real estate broker to recommend one to you. It is also a good idea to contact the UK law society. In this way you can arrange with them to draw up a preliminary contract of sale. This done, you will be expected to lodge a 10% deposit. From now on it is the lawyer's task to check the property's title. If everything is in order, the balance of the purchase price, land tax, and notary fees, amounting to approx 5% of the purchase price, fall due for payment. Once paid, the property is legally yours.

On property deals in Bulgaria it is common practice for the buyer and seller to split the estate agent's fees 50/50. A typical total percentage will be approximately 6 % of the purchase price. Sometimes, however, the buyer may be expected to pay the whole fee. Therefore, be sure to clarify who pays before the money changes hands.

Please see below for a list of the costs:

1. Purchase price.
2. Land tax and Notary fee depends on value of property.

One point you need to know about the Land tax. If both buyer and seller agree, it's quite common for a lower declared price to be entered on the Contract of Sale. This can lessen the Capital Gains Tax liability for the seller and save the buyer quite a lot of Land Tax, especially on the more expensive properties. Note that one company can own a number of properties.

Apart from corporate tax, no other direct taxes are levied in Bulgaria on the transfer of real estate. The transfer is, however, subject to notary and municipal fees. The notary fees are paid on the higher of the market price or the book value of the property at varying rates Approximately 1.5% + VAT. In addition, 2.5% + VAT of the market value of the property is paid to the municipality in which the real property is situated upon completion.

The owner of a building or a plot is obliged to pay a real 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. Arable land is exempt from local taxes.
The property taxes for your own property in Bulgaria are very low. For example the annual property taxes and the annual garbage taxes for a property in a big Bulgarian city or in a resort area are 50-70 EUR.

Transactions with land and lease of property for residential purposes are exempt from VAT (Value Added Tax), all other real estate transactions are subject to VAT at the uniform rate of 20%. However the buyer/lessee is entitled to a VAT refund, as soon as it is registered for VAT purposes.
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PostSubject: Re: Buying house, What next?   Tue Apr 19, 2011 9:59 am

I personally would prefer to set up my own new company. That's just my opinion. I would also be happy to recommend someone who has done this for us, and sees to our annual tax return etc. - if you do want to explore your options further.

Although you would have to get paperwork notarised at a BG embassy in the UK.
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LisA
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PostSubject: Re: Buying house, What next?   Tue Apr 19, 2011 10:13 am

[You must be registered and logged in to see this link.] wrote:
Ive been looking at houses in Bulgaria ( on the internet ) for a few years now and now ive agreed to buy one near Stara Zagora , signed the first contract and paid deposit.

The seller has been very helpfull for information as has this forum, i know i need a company ( not set up yet ), and the seller has given me the names of someone who sells ready made companys ( easier as im not in Bulgaria?) etc

What i need to do now is know what i need to do next! ,

Do i just buy a ready made company? or should i get one set up?, What sort of cost should it be?
Do i need my own solicitor or can i literaly just sign and get there solicitor to register it and sort taxes out for me?, i trust the seller ( usualy a bad thing to say i know! )


Looking at what you have written it sounds as though you may not have seen your house? if this is the case do you know it exists? You say you have paid a deposit? who through? The problem with buying ready made companies is that you won't know if its got any bad history? And you should always use completely independent agents for setting up companies etc. Do not under any circumstances use their Solicitor!!! I can't remember the exact cost without looking through a load of paperwork but I do believe the cost of setting up a company was about £400.
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Gimp
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PostSubject: Re: Buying house, What next?   Tue Apr 19, 2011 10:33 am

Once you have an offer that has been accepted you need to get your skates on and set up a limited company and a company bank account before you can actually buy the property and the land it sits on. Some estate agents offer a service to set up a company in your name for a hefty sum so if you can do it yourself do. Again it is wise to get your translator to come along to translate legal documents for you if your legal Bulgarian is a bit rusty. In order to set up a company you need to go through a solicitor;
it is best to find your own solicitor instead of going through the sellers? There is a bureaucratic system in place, similar to Companies House in the UK, by which you can now apply to form a limited company on-line. Previously everything was done by hand and the process took approximately one month from start to finish, but the idea is that now it should take as little as 24 hours. Whilst this time is passing you need to set up a company bank account, into which you must deposit 2 leva? BGN. Your solicitor should take you through this process as it is a stipulation of the company set up process. After you have your company documents you can head straight on down to the notary office local to the property you are purchasing, with the current owner. There is a thorough paper trail when it comes to Bulgarian real estate ownership and there are heavy jail terms for fraud. The current owner will need to make a declaration that the property has no debts tied to it (as debt passes with property in Bulgaria, not with people), and the notary official will make the same declaration. You will also be asked to verify the plot that you are buying with a blueprint map of the village or town, so make sure you know the location and address of the property you are purchasing. The notary will have records of the current property owner, who will be asked to show some identification to prove that it is really him or her. And that's it really. It is now simply a question of handing over the cash in front of the notary and signing on the dotted line. Congratulations!
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varnagirl
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PostSubject: Re: Buying house, What next?   Tue Apr 19, 2011 11:25 am

would definetly set up your own company....if you buy one , you could be buying a whole lot of problems with it ,left behind from the previous owner ...its not unheard of
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PostSubject: Re: Buying house, What next?   Tue Apr 19, 2011 12:09 pm

There has been some excellent advice given here on this post. Although we still live in Turkey it is advice I will take a note of and refer to when the time comes to purchase a property in Bulgaria. Property purchasing here in Turkey is just as confusing and lots of Brits have been swindled out of their life savings whilst attempting to buy a property. The most common mistake over here is to put your trust in a solicitor, Brits assume that a solicitor does the same for them when buying a property as they do in the UK. The UK probably has one of the best legal systems in the world for purchasing property and lot of European countries would do well to adopt a similar scheme to the British.

c c
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will666
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PostSubject: Re: Buying house, What next?   Tue Apr 19, 2011 1:42 pm

Thanks for all the replys,

I havent actualy been over to see this house yet......( i know bad mistake (number 1)! ), but i do trust the seller..... as much as you can trust anyone whos selling anything!

I will be going over before paying the whole lot, i have the usual videos and photos of the house ( but as you all say it still could not be actualy the house in question )

I have been looking for houses there for a few years and nearly bought another from ebay last year but decided that one was too dodgy after seeing posts in a few places about the ebay seller i decided no chance,
This house has been for sale some time from the same person the seller seems known to a lot of people , over quite some time , they are members on a few forums, lots of things they say check out over time in other places than there own website , i have spoken to other people who have bought from or through the seller , people seem quite happy with them and trust them.

I know the house will probably be much worse than it looks on the videos/photos , but things are always like that, if it was identical to the video i would be very happy but i dont expect that, i do expect it to be falling down and need to rebuild it ( although i dont want to )

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PostSubject: Re: Buying house, What next?   Tue Apr 19, 2011 8:41 pm

hi congratulations on your house purchase. you would definately be better getting your own company set up. having bought a few properties i can't see how you could possibly buy a ready made company as the process doesn't really allow for it. you need to have a lawyer to complete the sale rather than trust the seller as they obviously have their own not your best interests at heart. Ask for all documents to be translated in to english. You can complete the sale in england. We had our lawyer email all the documents that needed signing and we took them to the embassey in london. This was time consuming and more expensive than completing in bulgaria but in my opinion it is a better option than signing a power of atternoy if you cant be in the country till the sale is completed. if you do sign a power of atternoy make sure you are clear on what rights you have given them. they only require minimum rights to represent you in a purchase and it should state what it is and how long it lasts. if you give them full power they can empty your bank account and sell your property. having said that. bulgaria is a fantastic country and you should be able to complete your purchase easily. good luck i hope it all goes well.

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Carmen
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PostSubject: Re: Buying house, What next?   Tue Apr 19, 2011 9:08 pm

I really can't add any more here but to say that the advice given is all good and you should listen and use independent people to carry out the work involved for you and a new company is a must. Good luck
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PostSubject: Re: Buying house, What next?   Wed Apr 20, 2011 7:33 am

A big word of warning, someone put that it is usual practice to use the agents lawyer. DO NOT DO THIS....

There is no such thing as conflict of interest here in Bulgaria, so the lawyer can act of both the buyers and sellers behalf. NOT good for you.

Ask on here, there are loads and loads of lawyers and as your doing it from the UK it doesn't matter where they are based. I used one in sofia for a property in Velkio Turnovo and there were zero problems and the benefit was he spoke perfect English. There are a list of lawyers on the British Embassy web site that all speak English and they are based around the country.

Good luck
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