You are interested in
buying property in Bulgaria but are not sure where to start?
Don't worry,
we help you with all the steps.
* Please be aware that in Bulgaria, sellers insist on declaring a lower price in the title deeds to avoid paying tax. Most sellers state the “tax estimation price” rather than the “selling price”, thus reducing their tax liability.
It is essential that you insist the selling price is stated on the deeds when buying a property because if you state the tax estimation price and decide to sell at a later date, you will be faced with a large capital gains tax liability.
1. Establishing a Bulgarian Limited Company
If you are purchasing a flat or apartment that has no land attached, there is no need to form a Limited Company, otherwise, you must do so.
Bulgarian law does not allow (at the moment), foreigners owning land in Bulgaria, and the only way around is to form a company registered in Bulgaria.
Costs = 500 – 750 euro
Timing = 3-4 weeks
Minimum amount required = 2,500 euro (to be deposited into a bank account; once the company has been formed, the money can be accessed)
The company must have a name, with the suffix “OOD” which it is the same as Ltd in the UK and SL in Spain, determine a registered office address and appoint shareholders.
In March (the end of the financial year) you will need to file an annual tax return which will normally be zero (no trading). A lawyer could help you with this procedure for as little as 50 euro.
Power of Attorney
If you are unable to be in Bulgaria for the whole purchase process, you can give Power of Attorney to your lawyer to handle the formation of your Limited Company and the purchase of your chosen property.
Make sure you establish what your power of attorney permits or forbids and set a time limit for its applicability.
2. Preliminary Contract
Your lawyer will ensure that the preliminary contract is drawn up correctly. At this stage, a deposit of 10% should be paid.
3. Final Contract
Signing the final contract or title deed is the final step in the purchasing procedure.
You don’t have to be in Bulgaria for the signing, as the lawyer can do it on your behalf with a power of attorney.
The signing takes place in front of a notary public and all parties concerned must be present.
In the case of an off-plan purchase, the final contract is not signed until the building is complete.
To make payment of the final amount it is preferable to have a bank account in Bulgaria as you will be able to transfer the money from your home country to your Bulgarian currency account.