Buying process
Under the Bulgarian act on Foreign Ownership, foreign individuals can purchase buildings but not land. Foreigners can own land by setting up a Bulgarian company. A person buying an apartment does not need to incorporate a company because he/she owns only the apartment (section of the building) and not the land it is built on. However, some apartments are sold with a share in the land upon which they are built and they require setting up of a company. All of the apartments in our off-plan developments are freehold and there is no lease, the apartment is yours forever no matter if sold with land or without. For some of our developments you have a choice of whether to buy the apartment with the land or without. The price of the apartment stays the same no matter which option you choose.
Summary of the purchasing process when buying off-plan.
1. Obtain knowledge about the country and region you are intending too buy. If you need advice on where and what in Bulgaria is worth buying we are here to help.2. Check availability and reserve your chosen property by post. The reservation fee is between €1, 000 and €2, 000 depending on the property.
3.The reservation fee is transferred to the developer and the property is removed from the market.
4. At this stage (or earlier) you might want to travel to Bulgaria on a viewing trip. We organise subsidised, individually tailored or group viewing trips.
5. You receive an initial/preliminary contract of sale (similar to “Sold subject to contract” in the UK) and leave a deposit of usually 30% - 40% of the property price.
A preliminary contract signed by both parties means that they ‘promise’ to enter into a final contract to buy and sell the property.
The contract sets out timescales for completion of the project, detail schedule for the remaining payments until completion date, payment terms, prices and terms of conditions agreed, and other important information.
6. Bulgarian company in your name is registered if land or house with land is to be purchased (we offer this service, it takes about 4 weeks to complete and costs £300)
7. Perform the standard checks on the property using a reputable Bulgarian Lawyer. We use one of the British Embassy’s recommended lawyers. There are no extra solicitor’s fees to pay unless you want to choose a different lawyer. Our lawyer checks:
- Title documents
- Licenses and permissions
- Debt on title
- Terms of contract
8. Sign the Notary Act (Contract of Purchase) when the property is paid in full and the building is completed. This is done in from of a Bulgarian Notary in Bulgaria or at the Bulgarian Embassy in London.
The Notary Deed is equivalent to the “Title Deed” in UK and is the important document transferring ownership of the property. It is possible to grant ‘Power of Attorney’ to another person enabling to attend and sign on your behalf.
There are notary fees, document translation and legalisation costs as well as Country Tax (Stamp Duty in the UK). These extra costs are approx. 3.5% of the price written in the Notary Deed and are payable by the buyer.
All foreign buyers purchasing real estate property must be aware that in Bulgaria there are such terms as “tax estimation price” and “purchase” price. The “tax estimation price” is for the purpose of real estate taxation and is between 20% and 30% of the purchase price. The Notary fees, payable to the Notary Public when signing the Notary Deed, depend on the price written in the documents. This could be anything between the “tax estimation price” and the “purchase” price.
If the TEP is written the buyer will not have to pay VAT (20%) on the price difference between the TEP and the purchase price of the property (unless VAT is included already) and also Notary fees will be lower. Currently about 70% of the transfers of possessions happen on the TEP or amount close to it.
9. You are now a happy owner of a Bulgarian property!
