Last Updated on October 23, 2023 by Bulgarian attorney

Buying a property in Bulgaria

What you have to know when buying a property in Bulgaria

Buying a property in Bulgaria

Silistar, Bulgaria

Once you’ve completed your property search and identified a few potential options, the next crucial step is to initiate contact with the property owner. Our law firm can provide valuable assistance in reaching out to the property owner and conducting an initial assessment.

It’s imperative to be aware of the most common pitfalls and mistakes when purchasing property in Bulgaria. Our team of real estate lawyers offers comprehensive support that includes:

  • Verification of the seller’s legal ownership of the property.
  • Ensuring there are no legal obstacles hindering the property’s transfer.
  • Drafting the Notary Deed (equivalent to the Title Deed in the UK), also referred to as the Title Deed.
  • Drafting the Preliminary Sale contract
  • Registering the Notary Deed with the Property Registry at the Registry Agency, safeguarding the buyer’s rights against potential third-party claims. This registration empowers the buyer with the ability to manage mortgages, rentals, and sales.
  • Handling the tax declaration process, including the annual tax assessment at the Local Taxes and Fees Department in the municipality where the property is situated.
  • Assisting with applications for permanent residence and Bulgarian citizenship through real estate investment.
  • Offering highly competitive conveyancing fees in Bulgaria.

Our team can facilitate the remote purchase of a property in Bulgaria by allowing you to grant power of attorney to our law firm.

If you require further information regarding real estate purchases in Bulgaria, please don’t hesitate to get in touch with us.

Procedure for buying a property in Bulgaria

The process of buying property in Bulgaria involves specific regulations and considerations, particularly for non-EU citizens. Here’s a concise overview of the procedure.

Apartments in Bulgaria: Non-EU individuals or entities can purchase apartments in Bulgaria in their own names, as long as these apartments do not include ideal parts of the land on which they are built. It’s important to note that most apartments for sale in Bulgaria are sold without portions of the land.

Houses with Land or Plots: Non-EU citizens should be aware that, in general, land cannot be directly sold to them. Instead, the acquisition of land often requires the registration of a Bulgarian limited company. Our legal experts can assist you in establishing such a company or a Bulgarian ready-made company for the specific purpose of acquiring property.

EU and EEA Citizens: EU physical and legal persons have greater flexibility. They are permitted to buy houses with gardens, regulated land plots, and other types of properties in Bulgaria directly in their own names. The 5-year prohibition, which was originally imposed on EU and EEA citizens for land purchases in Bulgaria, expired on January 1, 2012. Now, all EU individuals and those from the European Economic Area (EEA) can freely acquire land and properties in Bulgaria.

Tips when buying a property in Bulgaria

Purchasing real estate in Bulgaria comes with its unique set of considerations that can significantly impact your investment. Here are some important tips to keep in mind:

  • Valuation by Square Meter: In Bulgaria, property is typically valued by square meter, in contrast to the room-based valuation in the United Kingdom. This means that a property listed as a four-bedroom apartment may turn out to be a small, expensive unit.
  • Common Parts: Real estate agents often mention the total size of the property in square meters without specifying the size of the common parts. While these common areas are non-usable, they are included in the total square meter calculation, which affects the overall cost.
  • Beware of Unrealistically Low Prices: While some property offers may seem incredibly attractive, it’s crucial to approach them with caution. When buying property in Bulgaria, always remember that you typically get what you pay for. There is usually a valid reason why a property is undervalued, which may include structural issues or other concerns.
  • Agent’s Commission: When working with real estate agents, be aware that their commissions can vary between 2.0% and 3.5% of the property’s value. It’s essential to understand the agent’s terms and fees before proceeding with any transaction.
  • Negotiating Room: The listed price of properties in Bulgaria is often higher than their actual value. Therefore, there is room for negotiation. It’s common practice for the property’s price to be reduced by 5-10% during the negotiation process.

Taxes and Fees in Purchase and Sale Transactions

To get an approximate estimate of the taxes and fees associated with your property transaction, you can use our Property Fees Caclulator.

When finalizing the formalities of your property deal at the notary’s office, the following fees are typically required:

  1. Notary Fee: This is calculated according to the Notary Fees Tariff based on the certified material interest. In case there is a difference between the tax evaluation and the sale price, the fee is calculated on the higher amount. Additionally, there is a 20% VAT added to this fee.
  2. Title Deed Registration Fee: This fee covers the registration of the title deed with the Property Register at the Registry Agency and is typically 0.1% of the certified material interest.
  3. Property Acquisition Tax: The rate for this tax can vary from 0.1% to 3%, and the specific rate is determined by the municipal council of your area. The tax is calculated based on the higher of two values: the tax evaluation of the property (established according to the rates in Annex 2 of the Local Taxes and Fees Act) or the agreed-upon sale price. To determine the tax amount, property owners need to obtain a Certificate of Tax Evaluation from the municipality where the property is located. These amounts are then paid to the notary, who subsequently oversees the title deed registration and payment of the applicable fees.

Please note that depending on your individual situation, there may be additional charges that need to be addressed.

Seek independent legal advice

Many property owners have encountered issues with their real estate transactions due to the failure to seek independent legal counsel. Instead, they relied on lawyers and translators recommended by estate agents or developers, sometimes representing both parties. It’s crucial to engage a lawyer with expertise in property conveyancing who is entirely independent of all other parties involved in the transaction, including the estate agent, seller, or developer.

Annual Property Taxes in Bulgaria

Property owners in Bulgaria are obliged to pay annual property taxes, typically consisting of two components: the property tax itself and a garbage collection fee. These taxes are remitted to the local municipality.

Property Inheritance in Bulgaria

In Bulgaria, property inheritance is subject to specific legal procedures, with a remarkable advantage for immediate family members. For surviving spouses, parents, children, and grandchildren, the inheritance tax rate stands at an incredibly favorable 0%. This means that close family members can inherit property without incurring any inheritance tax liability in Bulgaria. To ensure a seamless transition of property ownership to the rightful heirs, it’s essential to have a valid will or follow the legal rules of intestacy if there is no will in place.

If you would like to learn more regarding buying a real-estate in Bulgaria, please feel free to contact us.

Guidance of buying a property in Bulgaria by the Foreign & Commonwealth Office.
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