Introduction - Purchase & Living cost - Buying guide
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Introduction

Almost anyone can purchase property in Bulgaria, and the process is generally very straightforward. Please take time to read through this information and if you have any questions do not hesitate to give us a call.

Purchase & Living Cost

Payment Terms

For resale property

• 10% deposit
• Full payment on completion

 

For new build property (typical example)

• 1000 EURO for reservation fee
• The first installment representing 30% (thirty per cent) of the price, payable within a term of 14 (fourteen) days, counted from the date of signing the Contract. The payment of the installment under the preceding sentence shall constitute grounds for the entry of the Contract into force.
• The second installment, representing 20% (twenty per cent) of the price, after the completion of the foundations of the building.
• The third installment, constituting 20% of the price, after the rough completion and the coverage of the building by a roof.
• The fourth installment, constituting 30% of the price, at the assignment of the ownership over the SITE.

N.B. Percentages are specific for each developer, see property details for further information.

Purchase Tax

• Notary Tax - calculated on the bases of the following (prices in BGN):
  • If price is from 1000 to 10,000 = 28.50 + 1% for difference above 1000
  • If price is from 10,000 to 50,000 = 118.50 + 0.5% for difference above 10,000
  • If price is from 50,000 to 100,000 = 318.50 + 0.2% for difference above 50,000
  • If price is above 100,000 = 418 + 0.1% for difference above 100,000 but not more than 3,000
• Local Tax - 2% of the Sale price
• Notary Lawyer's Fee (for drafting and preparation of the Notary Deed and being present for the obligatory reading for both sides of the Notary Deed in front of the Notary) - 1.5% of the Sale price.
• Notary Registration Fee - 0.1% of the Sale Price
• Bank Commissions - approximately 50 BGN

Other Purchase Cost

Solicitor's charges vary in location and work requirement. Costs are typically EURO 250 - EURO 1500

Other Expenses

• 0.15 % annual property tax on the valuation of the property by local tax authority N.B. the local tax valuation price is typically lower than the purchase price, for example one 100 sq.m apartment in Bansko now is valued at about 5 000 EURO, as per tax authority.
• 0.25 % annual local tax. This is usually paid in instalments

 

Documents needed from the owner of an Apartment for issuing a Notary Deed.

• Passport.
• Declaration of Citizenship and Marital Status (a blank-form to be filled-in at Notary and signed)
• Statistical Declaration (a blank-form to be filled-in at Notary stating money transfer for purchase of property)

 

Approximate running costs.

• Electricity - up to 75 kWh - Price: 0.1176 BGL/kWh ( VAT is included) over 75 kWh - Price: 0.2 BGL /kWh (VAT is incl.) night rate - Price : 0.11 BGL/kWh (VAT is incl.)
• Telecommunications services - 1.62 BGL per hour for local call, for international calls there are more alternatives.
• TV - free, cable TV - about 15 BGL/month
• Insurance - from 0,1% to 0,32 % (incl. earthquake)

 

An average sized apartment could expect to use per annum approximately:

• Electricity and Water: EURO 750-1500 (if heating powered by electricity) Gas (bottled) cooking/hot: EURO 100.00.

 

Communal charge and maintenance services

These may vary according to the size and value of the property you purchase.

 

Annual tax for mainenance services is between 7 and 10 euros / sq m per year (including VAT).

 

The maintenance of the building will consist of the following

• Implementation of all year round security.
• Maintenance of the common parts of the building with elimination of small damages at the value of no more than 100 Euro
• Payment of expenses for electric power supply and water supply of the common premises
• Maintenance of the gardens and the fencing of the plot
• Appointment at the expense of the employer of auxiliary servicing personnel for the maintenance of the building and mainly of all of its common parts.

N.B. All the above amounts can only be used as a guideline as actual costs will vary depending on property size and usage.

 

Buying Guide

Who can buy?

After finding the most appropriate property you have to determine whether the sale is with land or not because according to the Bulgarian Constitution and legislation foreigners can acquire only buildings but not land. Only Bulgarian citizens and legal persons (including such with foreign owner) can obtain the ownership of Bulgarian land. As far as houses, villas, flats and limited ownership rights (the right of use, the right to build a house, etc.) are concerned; you can directly purchase them as a person. To buy a real estate property together with the land on the territory of Bulgaria you have to set up a commercial company. Setting up a company in Bulgaria is easy and takes about 4 weeks.

Alternative methods are:

• Establishing a joint venture with existing local companies
• Setting up a new venture
• Acquiring a company through privatization
• Making a portfolio investment

 

If you are buying an apartment, this does not apply.

 

Foreign organizations have the right to open bank accounts denominated in a Bulgarian or foreign currency. There is also no limit to the company stake they possess. Moreover, there is a special regime of respect towards the foreign investors on the part of the Bulgarian legislative system, which is a gesture of tolerance to those, who are interested in Bulgaria and are willing to benefit from its future.

 

Mortgage

There are mortgages available in Bulgarian and Foreign banks for buying Bulgarian property, but interest rates are rather high - approximately between 7% to 14 % per year.

Legal Documents

We would always advise that you use a lawyer to complete your purchase and we can provide the names of a lawyer. The lawyer will prepare a Contract that will detail your property, type, etc together with the price agreed, payment method and any extras or alterations you may require. This Contract Agreement is binding in Bulgarian Law and will be in both English and Bulgarian. After receiving an initial contract of sale (similar to "Sold subject to contract" in the UK), the standard checks on the property will be done using a reputable Bulgarian solicitor and sign the Notary Act is signed (contract of purchase) in front of a Bulgarian Notary. Please note that the final Notary Act is not signed until the building is completed in the case of off-plan developments.

Letting

The letting potential in skiing localities is usually very good, mainly due to the natural beauty of the particular area during all seasons - summer for the mountain lovers and winter for the ski fans.

 

Our associates can offer you a full letting service, which includes marketing, reception services for arrivals and departures, cleaning and linen services. Charges for this service may vary but a guideline figure is 25% of gross rental income and this would be taxable income.

 

Approximate rental income on a 2-bedroom apartment sleeping 4 persons would be EURO 400 per week.

 

Other Information

Residency

U.K citizens can reside in Bulgaria without visas for a period of 30 days. If you know you want to stay for longer than 30 days apply for a type C visa from the Bulgarian Embassy. After the expiry of the 30 days the following options are available to you :

• Leave the country and enter again for another 30 days, but only if the previous six-month period has already expired (if the individuals spend the 30 days in Bulgaria before the expiry of the six months period and still wish to continue their stay in Bulgaria within these six months, they will have to obtain residence permits or visas, see below), or
• Extend their residence requesting the issuance of a visa (a visa is issued for a period not longer than 12 months). However, even if a multiple entry visa for 12 months is obtained by the individual, he/she will be allowed to stay in Bulgaria only up to 90 days at a time.

 

All other foreigners require a visa to enter the country.

In order for an expatriate to reside in Bulgaria for longer than 90 days (in 12 months), he/she should obtain a residence permit from the police department as per the foreigner's address in Bulgaria.

Unfortunately, in the common cases there are only a few possibilities for an expatriate to obtain a residence permit, including but not limited to:

• Registration as a representative of a company where at least 10 Bulgarian citizens are employed.
• Obtaining a work permit prior to conclusion of an employment agreement with a Bulgarian employer.
• Being a foreign specialist sent to Bulgaria under an international agreement.

(Foreigners who are citizens of 46 specific countries (for example the EU-countries, the USA, Canada, New Zealand, Japan, etc.) can reside in Bulgaria without visas for a period of 90 days within a period of six months as from their first entry in the country, unless an international agreement provides for a different period (shorter or longer).

 

Points to note

• For a Business trip - It is permissible for any foreigners to conduct preliminary meetings, but once work starts a work permit is required.
• Concessions / special arrangements for particular nationalities - There are special visa arrangements for particular nationalities (approximately 46 countries). Generally there are no special work permit arrangements (Bulgaria is party to the Marrakech Agreement).
• Work permits - Required for all foreign employees in Bulgaira (not applicable to representatives of companies, for example, managing directors, executive directors, board members etc.)
• A birth certificate is not required
• Academic certificates are required for the issuance of a work permit.
• Police clearance - Registration of address with the relevant regional police department is required, unless the foreigner stays in a hotel. This registration should be made within 48 hours of the individual's arrival in the country.
• Timing - Approximately four weeks from the date of filing the application for a work permit and an additional 10 days for the issuance of a residence permit.
• Personal attendance is required at the Embassy
• A separate residence permit is required
• Registration is required at the town hall in Bulgaria
• Application procedure - The process of obtaining work permits is one and the same for each foreign citizen. The process is started by filing a work permit application by the employer at the Bulgarian Ministry of Labour. Upon submission of the request from a Bulgarian employer for issuance of a work permit, the foreign individual should be overseas.
• Penalties for non-compliance - Both the foreign employee and the local employer can be subject to significant fines.
• Spouse work rights - The spouse may apply separately for a work permit. All members of the family of a foreign individual who has already obtained a residence permit have the right to obtain residence permits as well.
• Separate application is required for family members
• There is recognition of a common law relationship
• Other issues - Bulgarian residence permits are administered by the regional departments of the Ministry of Inner Affairs and the Ministry of Labour. In view of the number of documents and procedures required by the respective authorities, we recommend the use of a relocation agent of consultant to deal with all registrations on each employee's behalf.

 

Work Permits

It is possible to obtain a work permit and work in Bulgaria but this is normally arranged prior to arrival in Bulgaria. If you have been offered work in Bulgaria you should make enquiries at the Bulgarian Consulate to obtain the required permit. Working in Bulgaria without this permit is forbidden

Social Security

For general details and information of the social security agreement between the UK and Bulgaria explaining National Insurance contributions and benefits visit http://www.nap.bg/?lang=en

UK Pension

United Kingdom retirement pension is payable in Bulgaria at the rate which is payable as if you were in the United Kingdom.

Medical Insurance

There are government run and private hospitals in Bulgaria. It is advisable to take out private medical insurance cover to ensure you can obtain the level of treatment you require. Costs of course will vary on the level of services required and covered.

Tax Regulations

Any earnings from property lettings in Bulgaria are subject to tax in Bulgaria. For tax issues and double taxation relief and for information on your tax liabilities look through: "Personal Income Tax Act" and "Double Taxation Treaties" on web address: http://www.nap.bg/?lang=en. State tax - the equivalent of stamp duty - is two per cent of the purchase price, while other legal and notary fees are less than two per cent.

Helpful Information

Law for the foreigners in the Republic of Bulgaria
http://www.internationalpropertylaw.com

 

Telephone numbers of the Bulgarian Embassy in the UK:
0044 2075813144
0044 2075849400
www.bulgarianembassy.org.uk

 

 

To view previously asked questions on purchasing property in Bulgaria, or to ask your own question click here

 

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