Golden Eye Bulgarian Properties  Buyers' Guide

Buyers' Guide

Buying property in Bulgaria is a relatively quick, simple and straightforward process. However, there are a few principles that need to be understood. Firstly, whilst foreigners can buy unmovable property (e.g. houses), they are not allowed to buy land. To overcome this hurdle, a foreigner must register a Bulgarian company. This is routine and all property lawyers know this procedure. Secondly, unless special conditions are agreed between the buyer and the seller, the standard period between a preliminary contract being signed (equivalent of exchanging contracts in the UK) and completion is thirty days. Thirdly, unless the buyer engages an independent lawyer, the same lawyer will act for both the buyer and seller. We can recommend several good, independent lawyers.

PURCHASE USUALLY TAKES PLACE IN THREE STAGES:   At the first stage, the preliminary contract is signed, usually by the buyer's lawyer. At this stage,a 10% deposit, a proportion of the lawyer's fee and (if applicable) the agent's commission must be paid. Agents usually charge the buyer between 2% and 3% of the property price, with a minimum charge of between GBP300 and GBP500, depending upon the agent concerned.  At the second stage, the lawyer must proceed with the setting up of the buyer's Bulgarian company, if they have not registered one previously. Bulgarian law states that to register a company, a minimum capital of 5000lv (approx. GBP1750) must be lodged in the new company's bank account as paid share capital. This capital can be used, once the company registration is complete, towards the final payment of the property. Also due at this stage are various taxes and levies required to set up a company, together with the lawyer's fees. The total cost at this stage is around EUR3700.  At the third and final stage, the balance of the purchase price must be paid together with the remainder of the lawyer's fee and various small expenses, such as notary taxes.

THE PROPERTY PURCHASING CYCLE:

Find a property: The company is able to offer you a full service, with access to a Notary, a Solicitor, and if buying land to build your home, a reputable building company. We have many properties for sale to suit all financial situations.

With Land: If the property you intend comes with land then you will need to register a Bulgarian Ltd. Company to own the land. The reason for this is that at present the Bulgarian Constitution states that a foreign person may not own title to land.

Without Land: It is generally accepted that the purchasing of an apartment does not require you to set up a company as it has no or very minimal land ownership. The process of forming your company can take anywhere between a few days to a few weeks.

Register a company: The company that you own will then legally own title to the land. Forming the company is relatively straight forward and your Real Estate Broker should help with this. The cost is between EUR 400 - 500 to form the company.

Negotiate: Sometimes difficult in Bulgaria particularly so as a foreigner, but as applies any where it is normally wise not to proceed without some form of debate on the price.

Primary Contract: When you have agreed to purchase your Broker will draw up a Primary Contract setting out all of the agreed details and stating the initial deposit amount to be paid (normally 10%).

Property removed from sale: Upon signing the Preliminary Contract it should be made conditional that the property is removed from the market.

Verbal agreement: This pre-empts the drafting of the Preliminary Contract.

Property Checks: Extremely important and a good reason to use a Lawyer to undertake this for your although many Real Estate Brokers are able to do the same.

Notary Act: This is the final stage when both buyer and seller meet with a Notary Public and complete the transfer and pay the state and Municipal taxes due on the transfer.

Your New House: Congratulations you should now have the keys to your dream home in Bulgaria. Don't forget to take out Insurance against normal insurable risks just as you would at home.