Bulgarian Property For Sale

Advice for British people buying property in Bulgaria:

Since 1 January 2012 all EU and EEA (European Economic Area) citizens are allowed to buy land in Bulgaria. This applies to houses with gardens, all plots that are within the zoning of the settlements, apartments coming with shares of the land, offices and other commercial properties.

Legal Advice

It is strongly recommended that you choose an independent lawyer who is specialised in Bulgarian property law. ‘Independent’ in this regards means that they will work on your behalf only and are not also looking after the interests of the agent or developer.

The Bulgarian property conveyance system is different to the UK system so you should ensure that those involved in the transaction are qualified and experienced in Bulgaria. The safeguards that you may be familiar with or rely on in the UK may not exist in Bulgaria.

Taxation

The Bulgarian tax authority is the National Revenue Agency. It provides some information on its website in English.

Purchaser’s checklist
Before you complete your property purchase you should make sure that:

You have seen the Land Registry extract (кадастрална скица), available from the local Town Hall and checked the following details:

The property and land for sale match the details registered and the sellers are the registered owner(s) there are no debts or charges, such as a mortgage, on the property and/or there are no legal proceedings initiated against the property for contravention of land planning law
For properties which are not included in the Land Register (not available for all areas) a Municipality Sketch (регулационна скица) is issued.

You have checked that planning permissions (виза за проектиране) are in order and the property is a legal build. This is particularly important and relevant when buying off-plan or direct from a developer. The Town Hall can inform you whether the building has all licences and permissions and provide details of the type of land. If the property is built on rural land or land that is not classified for construction, additional confirmation should be sought from the regional government offices as to whether they have authorised the construction.
You have checked the latest town plan to see whether or not the plot you wish to buy has any building restrictions, is in a green zone or includes a public pathway or similar. This can be viewed at the town planning department of the local Town Hall.
You have carried out a property survey. Whilst this is not obligatory, it is wise to get a chartered surveyor (независим оценител) to check the property
You know the cadastral value of the property and how much purchase tax will be due. Cadastre is the official public register showing details of ownership of the real property in a district, including boundaries and tax assessments. Be aware that tax is charged on the council’s evaluation of the property as opposed to the amount of the sale.
Make sure you have seen the following documents:

A paid-up receipt for the previous owner’s annual property tax . It is also wise to get a certificate from the town hall proving that there are no unpaid taxes from previous years.
The Cadastral certificate giving the exact boundaries and square metres of your land. The Cadastral record will be linked to the Land Register record by a cadastral reference which will be included in both. You should ensure that the property and land description contained in both records matches the Use Permit (Act 16) which is issued by the Town Hall for new buildings or restructured ones and certifies that the property is habitable. You will need this document to connect to electricity and water companies
receipt to prove all utility bills have been paid by the previous owner
It is wise to require the seller of the property to provide evidence for absence of any liabilities concerning the property (taxes and other statutory costs and fees) or its use (consumable expenses) Ask the property agent for information regarding any costs the owner has not paid. It is strongly advisable to ensure that you have a copy of an affirmation stating that the previous owner has no debts
the title deed – it is important to check that there is an accurate description of the property in the deeds
if you are buying an off-plan property, confirm that there is an architectural plan for the property approved by the local municipality. Ensure that the developer/constructor has the necessary insurance to cover any build defects.
On completion, the public deed should reflect an accurate description of the property. It is advisable that you register the property in your name with the Land Registry as soon as possible to ensure full protection of your rights. The notary can even send advance notification to the Land Registry once the public deed is signed.

Property Buyers Agreement:
Most often, though not necessarily, assistance in finding a suitable property (or a buyer for the property) is provided by real estate agencies.

Besides mediation, the agencies undertake to assist in the subsequent stages until the final closing of the deal. Commissions for the services rendered on the transaction should be paid to the respective agency. The amount of the commission is negotiated between the agency and the client and usually it is a percentage of the amount of the transaction.

Property Purchase Costs, Fees & VAT
If you are buying a property in Bulgaria, you should budget around 22 to 25 per cent for the costs fees etc., and note that some builders and developers include VAT in the property sale price.

Short-term lets:
If you want to let your property to tourists on a short-term basis, you must ensure that you are doing so in accordance with Bulgarian law. The regulations on letting tourist apartments and holiday homes to tourists will vary depending on the region where the property is located.

If you are planning on making a return by renting out your property on a short-term basis, it is best to seek independent legal advice and check what the rules are at the local town hall or the tourist department of the regional government before you buy.

If you are planning to buy an apartment which is part of a residential block, you should also check whether there are any rules set by the committee of owners that prohibit or restrict short-term letting. You may want to consider hiring a Bulgarian letting agent to assist with finding tenants, drawing up rental contracts and managing the property on your behalf.

Long-term lets:
Owners who let their properties on a long-term basis are free to do so within the terms set out by the national rental law. However, it is worth seeking professional advice to make sure that you are complying with Bulgarian legislation and that you are using the correct rental contract.

Letting taxes
You must ensure that you declare your rental income to the Bulgarian tax authorities whether you are resident in Bulgaria or not. Taxation is a complex issue, and it is advisable to seek the advice of an accountant or professional tax adviser with comprehensive and up to date knowledge of both the UK and Bulgarian tax regulations.