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 Buying a House or Property in Bulgaria

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PostSubject: Buying a House or Property in Bulgaria   Tue Sep 15, 2009 12:48 pm

First topic message reminder :

Buying a House or Property in Bulgaria;


Foreigners Owning Property in Bulgaria - The Law!

Foreign parties can buy property but not the land it is built on. The system used most frequently by foreigners to buy property with land is setting up a Bulgarian company. Being a Bulgarian entity, the company would legally own the land and the buildings.

The law is set to change eventually with the entry of Bulgaria into the European Union in January 2007. This is one of the reasons why Bulgarian property is so relatively cheap compared to Western and Central Europe. As it stands the ruling in place right now dictates that EU citizens will have the right to buy land in 2014, but in the meantime a company is still needs to be in place for land ownership.

The overview is:

‘If purchases include land a Bulgarian Limited Liability Company (EOOD or OOD) will need to be formed’.

This of course is not a difficult process but requires the services of a solicitor or a good agent to complete.
How To Set up a Limited Liability Company

Firstly. the company owners will be liable for all the company's business, transactions and ongoing conduct.

This is in conjunction with the value of their shares in the company's registered capital. All articles of Incorporation are prepared read or understood then signed by all shareholders.

A company bank account has to be opened to collect all the capital, (shares). The minimum amount of share capital that is required is currently 2 leva. These funds can be withdrawn once the company is registered.

From the moment it is added to the Commercial Register the company is a active. The entry of the company is made upon the instruction of a district court decision for the incorporation.

The Documents required for the registration of a company with the court are:

* Articles of Association
* Proof of registration of a unique name
* A memorandum for appointment of Directors
* Proof that the registered capital has been paid
* Declarations from each shareholder
* Application for recording the incorporation in the court
* Specimen signatures of the managers

All Bulgarian legislation and company formations are published in ‘The Bulgarian State Gazette’ which is the official state media.

However, this is not the end of the process. Your new company has to be registered with Bulstat ( Part of the National Recording Agency) that will issue the company with a registration number.

It can take anywhere between a few days to a few weeks to process the formation of your Company.

You need to allow between €500 - €700 in charges made in conjunction with the formation and registration of your new company.
Summary of Charges Levied When Purchasing Property
Real Estate Tax

Corporate tax aside, no other taxes are levied on the transfer of real estate property. However, the transfer is subject to notary and municipal fees.

The amount of notary fees you have to pay is calculated using a sliding scale on either the buying price or the tax valuation of the property whichever is the higher.

Payment of purchase tax has to be made to the municipality in which the property is situated upon completion. This is based upon 2% of the buying price of the property. Look at it like Stamp Duty in the UK.
Local Taxes and Rates

Property tax is a liability the owner of a building or a plot is obliged to pay. The value of the plot will also be included in the tax base where a building is built on a State or municipal land.

The tax is basically 0.15% of the book value of the real estate but arable land is exempt from this.

Owners also have to pay for waste-collection fees in addition. All these fees are assessed at the time of registration with the municipality. You should be aware that fines are imposed where this registration is not completed within 60 days of purchase.
Value Added Tax (DDS)

Purchasing land and leases of properties for residential purposes are totally void of liability to VAT. The exception to this is if you purchase a new build from a developer.

Other real estate transactions have a statutory VAT amount to pay at the standard rate of 20%. This is of course assuming that the seller is registered for VAT.

The buyer is entitled to a VAT refund, provided that it is registered for VAT purposes.
In Conclusion

This is merely a summary which is meant to give you an overview of what purchasing a property involves.

Finding a real estate agent that has your interests at heart and who you can come to trust is the best advice that can be given. There are some about!

Finding one is invaluable in all respects in helping you through all of the procedures, and not least to help you find the property of your dreams.

Doing your research before you travel to Bulgaria and familiarising yourself with the procedures may save you much time and money at the end of the day.

This is only a guide please ensure you check all facts with a qualified and registered Solicitor/Notary

Updated 10 May 2011

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BigDave
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PostSubject: Re: Buying a House or Property in Bulgaria   Fri Apr 04, 2014 1:46 pm

Brilliant bit of information davshaz thank you very very much T
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PostSubject: Re: Buying a House or Property in Bulgaria   Wed Mar 11, 2015 10:33 am

I thought NOW would be a good time to discuss buying property in Bulgaria as the Euro is getting stronger and stronger every day. Is it a buyers market not a sellers. We purchased our villa eight years ago for 93,000euro which converted to approx. £63,000, it is not far off that now

Will the fact that from 6th April when we can all draw the full amount of our private pensions have any bearings on the property market. Will there be a rush to buy overseas. I think it is called an investment ???

What do the forum members think. I am interest to read your comments T
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PostSubject: Re: Buying a House or Property in Bulgaria   Thu Mar 12, 2015 11:16 am

[You must be registered and logged in to see this link.] wrote:
I thought NOW would be a good time to discuss buying property in Bulgaria as the Euro is getting stronger and stronger every day. Is it a buyers market not a sellers. We purchased our villa eight years ago for 93,000euro which converted to approx. £63,000, it is not far off that now

Will the fact that from 6th April when we can all draw the full amount of our private pensions have any bearings on the property market. Will there be a rush to buy overseas. I think it is called an investment ???

What do the forum members think. I am interest to read your comments T

Not so sure Brian I think people are being very careful at the moment regardless to what the press say.
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PostSubject: Re: Buying a House or Property in Bulgaria   Tue Nov 17, 2015 8:48 am

just been reading up on the info from some of my friends on this forum, and I will read the info from property-in-Bulgaria.bg/ later today if I get time, it has a bit confused me, and also gave me more thought.
I was told that I don't need permission to up date my house which is what I am doing slowly I think if I was retired I would have finished it by now?, but next year in March I intend to put a balcony on to the front of the house, and rebuild the outside staircase, been told it is OK but also been told NO so which one is it?
also the house had an extension on the side which was rotten and needing dealt with but noticed it is not on the plan again been told it is OK to rebuild it?
the barn needs to come down and again been told as long as I build in the same square and the area is not for living and just for store or garage that is OK.
as most of you live in Bulgaria it would be great to get your feed back but please don't confuse me more.
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PostSubject: Re: Buying a House or Property in Bulgaria   Tue Nov 17, 2015 9:37 am

Ask the mayor of your village as there seems to be difference in procedure depending where you are. You may only need signature to say you have permission to do this - not the same as planning permission

If you need planning permission, go to your local Architect, explain what you want and get a FIRM QUOTE before he starts. Using your car to fetch him from his office and to go to your house will save you many leva!

worth taking your time, no need to be lumbered with lots of extra architects costs if full planning permission is not required

Perhaps [You must be registered and logged in to see this link.] will be along and be able to help as she has done quite a bit with her house
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PostSubject: Re: Buying a House or Property in Bulgaria   Tue Nov 17, 2015 9:52 am

In my experience Since Bulgaria has joined the EU, Bulgaria has and must comply with new regulations so you will need "Planning Permission".

Work inside the structure of the house do not need planning permission, but any changes (extensions) will require planning permission. If you have a barn and want to convert and incorporate it as part of your accommodation - you will need planning permission. Likewise you will need planning permission if you want to build a permanent garage on your land. Without planning permission, you can be fined, and have the extension pulled down.

You can however build a temporary structure (normally made out of wood) like a garden shed without permission (unless your neighbor object).
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PostSubject: Re: Buying a House or Property in Bulgaria   Sat Dec 05, 2015 9:30 am

Thanks Andy and Grimp, lucky for me I know Oddball, and have also see the work they have done on there home, I would hate to think what Bernie would be like with a whip, if fact come to think off it that maybe why she is so good at what she does.

I will take all the info and talk to someone about planning when I get over in March, and deal with it properly as the last thing I what is to sort out everything and get ready to retire and start looking for my car under the rumble and say "so that's what that letter said".
thanks guys and enjoy your Christmas and New Year.
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PostSubject: Re: Buying a House or Property in Bulgaria   Mon Dec 07, 2015 3:55 pm

Good luck Paddy I took advice from this forum and it was plain sailing
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PostSubject: Re: Buying a House or Property in Bulgaria   Mon Jan 30, 2017 10:43 am

Some more important information for you



Important Amendments of the Commercial Law of Bulgaria


The Parliament of Bulgaria has amended the Commercial law of the country and the changes entered into force on 30th of December 2016.

The changes concern all company and property owners:


1. Sale of the company.

As of January 2017 the company can be transferred with simultaneous notarisation of the signatures and the content, while according to the previous text of the law the notary public had to notarise only the signatures of the parties.


2. Taking of decisions by the General meeting/Sole owner of the capital.

All the decisions of the General meeting/the Sole owner of the capital of the company should be written and signed by the shareholders/the sole owner.
According to the amended text of the law the following decisions will require simultaneous notarisation of the signatures and of the content:
- Decisions about acceptance and expelling of shareholders and agreements about transfer of the company shares to a new member /shareholder/;
-Decisions about decreasing and increasing of the capital of the company;
-Decisions about appointing of the manager, determination of manager's salary/remuneration and release from liability;
-Decisions about acquisition and alienation of the real estates and property rights.
The only option that allows the GM/the sole owner to avoid notarisation of those decisions is if in the Articles of association of the company it is provided the written form of the decision.

Also, the shareholders now may vote via a representative only in case the latter has an explicit POA except for the shareholders that are legal persons /companies/ and legal representatives. The Law is unclear, whether if a shareholder is a company, its manager cannot vote of all or can but with notarized POA.


3. Changes that concern the bankruptcy and stabilization of a trading company:

Another important amendment that should be mentioned is the following:
According to the amended text of the law in case the trader has not submitted company's financial reports for the last 3 /three/ years before submitting of the request about starting of the bankruptcy procedure it is considered that the trader /i.e. the trade company/ is an insolvent one.
It means that in case of non-submitting of the financial reports for the last 3 years it is considered that the company cannot fulfil its obligation and it is a reason for starting of a bankruptcy procedure.
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PostSubject: Re: Buying a House or Property in Bulgaria   Mon Jan 30, 2017 11:40 am

Thank you [You must be registered and logged in to see this link.] I think there will be a lot of Bankruptcy's going on in Bg when you consider the amount of properties that have been abandoned by the Brits.
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PostSubject: Re: Buying a House or Property in Bulgaria   Mon Jan 30, 2017 2:01 pm

if the price is right I am always interested, assuming the costs stack up.
on my last trip over I was sitting next to a group of people who were all ecstatic of the amount of money they were going to make, one of them said his plot had room for 5 4 beds near Varna with pools and he was going to have them on the market for 300k, I said best of luck.
I also said to him that on ebay they have some for 30k with pools and he said not like mine, so again I said best of luck.
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PostSubject: Re: Buying a House or Property in Bulgaria   Mon Jan 30, 2017 2:19 pm

Where are you looking to buy? [You must be registered and logged in to see this link.]
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