BUYING REAL ESTATE IN BULGARIA.

All stages and nuances.

    Before buying a property, you need to answer the following questions for yourself:

• The purpose of purchasing a home?  For living, investment or just vacation.
• Region of Bulgaria?  Depends on your goals and preferences?
• Property type?  House, apartment, office, warehouse or land.
• Where should the property be located - in an ordinary residential building or a complex?  The question is very important, since the owners' expenses depend on it for many years to come.

        Also useful advice from us, do not judge the real estate markets only by the objects presented on the sites.  About 30% of ads on such portals are bluffs, no one is responsible for anything.  Anyone can post information.  In reality, the price of real estate is determined by the market situation - according to the concluded transactions, and not according to the prices stated on the website.  The cost of the offered offers, as a rule, is 25-30% higher than the real selling price.

       In addition to inflated prices, other unreliable information can be found on the Internet.  Some sellers post false information about properties or advertise already sold properties to attract attention.

 

Provide purchase costs

 

         Sometimes when planning a budget, shoppers forget that they will have to pay about 10% on top of the price.  At the conclusion of the transaction, the services of realtors, lawyers, notaries, as well as government fees and taxes on the transfer of property rights are paid.  When purchasing a primary property, VAT is charged, although in most cases it is included in the cost of the property, but it does not prevent this issue from being clarified before the transaction.

 

WHAT IS THE PROCEDURE FOR BUYING HOUSING IN BULGARIA?

 

1. Making a deposit (pledge) for the property.  The size varies by agreement.  Upon receipt of the deposit, the seller removes the property from sale, begins to draw up the documents necessary for the transaction.  The amount is included in the price of the apartment.  It is important for the buyer to know that the deposit is returned only if the seller refuses the transaction.  It is very important to issue a deposit with a lawyer or a notary, in order to avoid being deceived later, by overpaying a little you will have guarantors!
2. Signing a preliminary sales contract.  Sometimes at this stage it is required to make an advance payment, which can be 30-50%.  Most often, this requirement arises when buying a primary property.  By agreement of the parties, when buying a secondary home, this stage can be omitted.
3. Passing the transaction with a notary, processing the necessary documents.

Registration of the transaction with a notary and further stages

 

You should remember, incorrectly prepared documents lead to the cancellation of the transaction, fines and loss of money.

 

      Stages of registration:

 

1. Preparation of documents:

• From the side of the seller - submits documents confirming ownership, cadastral scheme.  Before making a transaction, a notary is presented with a certificate (extract) from the same register about the absence of the "weight" of the object, that is, about its "purity".  The certificate reflects the presence of a mortgage on the object, the right to use the object by third parties, a ban on sale, open court cases, etc.  It also confirms that the object belongs to a specific person - the seller.  Also an important document is the state estimate of the value of the object, issued by the territorial tax service.  The price of the object indicated in the notary deed cannot be lower than this value.  Based on the price, the amount of the state duty for the transaction and notary fees are determined.
• On the part of the buyer - a foreign individual - must provide the original foreign passport.  When buying for a legal entity - constituent documents for the company.  If it is impossible to be personally present, an authorized person participates in the transaction on the basis of a notarized power of attorney.

 

2. Passing the transaction with a notary.  The parties confirm the desire to sell, buy an apartment, fulfillment of payment obligations.  The notary checks the legality of the transaction, the documents provided.  At the stage of the transaction, the parties draw up declarations of employment in state structures, citizenship, marital status.  The seller additionally fills out a declaration on the absence of tax arrears.  On the basis of the submitted documents, a notarial deed is drawn up, which is an analogue of a purchase and sale agreement and secures the transfer of ownership.
3. Registration of the transaction.  A notarial deed is invalid if the transaction is not registered.  Registration is carried out by a notary after confirmation from the seller on the fulfillment of payment obligations by the buyer in full.  And at this stage, I would like to add: Do not forget about the restrictions on cash payments!  Travelers checks and bank transfers are often used for payment. (For payment methods, read the article "How to transfer money abroad to buy real estate").  All payments for transactions over 15,000 leva (7,650 euros) must be made by bank transfer only.  Otherwise, the state imposes a fine of 25% of the transaction amount.
4. The acquired real estate must be registered in the following structures:

• Bulstat (registration agency).  Real estate bought by a foreigner who does not have the right to permanent residence in Bulgaria is subject to mandatory registration.  Registration period is 7 days.
• Tax authority.  The property declaration must be completed within 30 days.
• Water Supply Organization (WIC) - 30 days
• Electricity Supply Organization (EVN) - 30 days.

         Registration is carried out in the presence of a registered title deed.

 

WHAT ARE YOU EXPECTED WHEN BUYING A PROPERTY?

 

In accordance with generally accepted practice, all taxes, taxes, fees when buying real estate in Bulgaria are borne by the buyer.

Home purchase costs are as follows:

• Tax associated with the transfer of ownership.  Determined by the municipality of the settlement in which the transaction is made.  It ranges from 1.5 to 3.5% of the price of the property specified in the title deed.
• Payment for notary services.  Is no more than 1% of the housing price.
• Tax for registering a transaction with a registration agency.  It is 0.1% of the property price.
• The layer's services.  In some localities, a lawyer participates in the transaction without fail - draws up a notarial deed, provides legal support, and registers property with a registration agency.  In other cases, a lawyer is hired at will, in order to figure out exactly how to register real estate in Bulgaria, to make sure that the housing is legally clean, there will be no problems with its acquisition and further operation.  The lawyer also draws up a sales contract.
• Additional costs when buying real estate are associated with the payment for the translation service.  According to the law, a transaction, one party to which is a person who does not know the Bulgarian language, must take place in the presence of a licensed translator.

ARE THERE ANY RESTRICTIONS WHEN BUYING PROPERTY IN BULGARIA?

 

        In accordance with Bulgarian law, there are no restrictions as to which countries' citizens can buy property.
However, foreign citizens will not be able to acquire the land on which the residential building was built, where the apartment was purchased.  The legislation also prohibits foreigners from buying a plot of land sold with a private house.  But this issue is solved very simply, through the opening of a Bulgarian company.

 

Do not neglect the help of professional realtors.

Many buyers, wanting to save money, try to do without the help of agents.  But without an experienced realtor, you will not be able to find the desired property at an adequate price, as well as protect yourself from "pitfalls" and unscrupulous sellers.

There were times when buying without realtors ran into scammers.  After receiving a deposit, they sold the property to other clients, and unlucky buyers could not get their money back.

 

Some nuances that you should to know and will help you:

 

1. Buying Bulgarian real estate does not provide any advantages in obtaining a residence permit (the only exception is if you are ready to spend more than 600,000 levs on real estate, that is, more than 300,000 euros).

 

2. Do not buy in absentia!

Some people choose housing in Bulgaria without leaving their homeland, based only on photographs and descriptions.  They pay a deposit, and upon arrival in Bulgaria the apartment is not at all what they imagined it to be.  The amount paid in cannot be returned and you either have to buy a house you don't like or lose money.

To avoid this situation, you do not need to buy property without seeing it in person.  It is always better to pay 350-370 euros extra for a plane ticket to Bulgaria than to buy a pig in a poke.

Many real estate agencies offer study tours, some companies even refund the money spent on the trip if the client subsequently buys a home.

 

3. Be aware of the risks "not according to plan"

One buyer has purchased an apartment in a residential complex that is due to be completed by 20XX.  He entered into a preliminary agreement and contributed 50% of the amount.  However, the year 20XX has come, and this residential complex has not yet been completed.  At the same time, the company that was engaged in the construction of the facility went bankrupt.  And such cases are not uncommon in Bulgaria.  It is better to find out and check the developer in advance.  Information about a construction company in Bulgaria (information about the founder, charter, annual accounts, documents, existing problems) can be found on the website of the Trade Register.  You can also contact lawyers who, in addition to public information in official registries, can provide additional information. 

All disputes with the developer must be settled within five years from the date of signing the preliminary contract - this is the limitation period.  It is also worth remembering that in Bulgaria there are no companies that provide property insurance during the construction phase.

 

4. It is not recommended to pay the entire amount at once.  When buying an object that is still under construction, a serious seller will always agree to accept the money in installments, for example, 20% when laying the foundation, 65% when laying the roof and the remaining 15% when putting the house into operation.  The payment procedure may be different, but it must be specified in the preliminary sales contract.  If a developer refuses to accept money in installments and insists on paying the entire amount, most likely you are dealing with scammers or a company in dire financial straits.

Buyers of projects under construction in Bulgaria must receive three documents: Act 14, Act 15 and Act 16. The entire amount must be paid only after the buyer receives Act 16.

 

5. Do not buy a "atelier"

In Bulgaria, “atelier” are often put up for sale - work studios or offices, which are usually located in residential buildings.  Such real estate belongs to the category of non-residential properties, and only home buyers can obtain a multiple-entry C (tourist) visa for a property owner in Bulgaria.  In addition, higher taxes are imposed on the atelier.  Whether the object belongs to the housing stock, you can find out in the notarial deed: it should be written "for a living".

Of course, real estate can be converted to housing, but this is associated with difficulties.  In particular, there are space restrictions, the living space must have a separate entrance, a bathroom and a kitchen, the ceiling height must be from 2.6 m, and the windows must not face north.

 

6. Remember that the area in Bulgaria is calculated differently

Inexperienced buyers of Bulgarian real estate are often perplexed when instead of the promised 100 m² they receive 85–90 m².  And it's not that Bulgarian sellers are scammers, it's just that in this country the total area of ​​housing includes not only the floor area, but also the thickness of the walls, the area of ​​the balcony and common areas.

The ads indicate the total area.  It includes the net area (including the balcony and wall thickness) and the common areas (includes the area of ​​staircases, corridors and elevators, proportionally divided between all apartments).  On average, the area of ​​common parts is 10-15% of the total.

 

7. Soberly assess the advantages and disadvantages of housing on the 1st line by the sea

Beachfront property has many disadvantages.  Houses and apartments on the first line of the sea are 25-50% more expensive than objects a few hundred meters from the water.  They are also exposed to sea wind and salt, which corrodes metal parts of balconies, antennas and window grilles.  In addition, sand from the beach constantly gets inside the house.

A little further from the sea - and the price will be significantly lower, and the natural impact on the house is much less.  And you can walk to the sea with pleasure.

 

Buying an apartment or house is a serious undertaking, so you shouldn't blindly trust your emotions in order not to regret it.

 

Best regards, TRentMe team

 

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