How To Buy Property in Bulgaria

This section gives you important information. If you're thinking to buy property in Bulgaria, please read it carefully before you proceed.

LEGISLATION ISSUES
According to the Bulgarian Act on Foreign Investment, foreigners are allowed to buy only buildings. This means that you can buy an apartment very easily. But if you want to built a house by yourself, the law requires establishing a company. This process takes usually 2 weeks and we will manage all of the paperwork for you.

The company does not need to operate but it is simply a tool to purchase the property.According to the Commercial Law, foreigner citizens can form Limited Liabilities Company (LTD) by its two variants -EOOD - where the founder is one or OOD, where the founder is more then one person. These could be only foreigners or foreigners and Bulgarian citizens.

The person/persons will be liable for the company's obligations to the value of his/hers share in the company's registered capital. The shareholders conduct preliminary discussion on the commercial activities they intend to engage in. Based on their agreement, Articles of Incorporation are prepared and sighed by all shareholders. A dedicated bank account is opened to collect all share capital. The minimum share capital required is 5000 BGN (about 2600EURO). Shareholders at the time of the registration must have paid at least 1/3 of their respective shares. It is required that at least 70 % (3500 BGN) of the capital is raised at time of registration.

The company exists from the moment it is added to the Commercial Register of the district of where the company will be based. The entry is made upon issue of a district court decision for the incorporation. The following documents must be available at the time of the submission of registration application to the district court.

Articles of incorporation
Memorandum for appointment of Director/Directors
Proof that at least 70 percent of the registered capital has been paid
Publication of the company entry in the Commercial Register does not complete the company formation, it announces to the general public the act of formation. The process of forming a company can take anywhere between a few days to 4 weeks.

Finally your new company (OOD or EOOD) will need to register immediately with the National Tax Register. Once the entire authorized /share/ capital has been paid up these funds can be accessed and withdrawn.

LEGAL FEES AND STATE TAXES
State Taxes:
Entering fee - 0.1 % from the value of the property
Land Tax - from 2% to 5% from the value of the property. You need to know, that if both buyer and seller agree, it's quite common for a lower declared price to be entered on the Contract of Sale. This can lessen the Capital Gains Tax for the seller and save the buyer quite a lot of Land Tax, especially on the more expensive properties.
notary tax – it is calculated under a determined scale and is paid as percent from the value of the property.
For example if the value is 40 000 BGN and the property is locate in Byala municipatity, the total value of the due state fees is at about 1800 BGN or 1000 Euro.
Each year local council taxes must be paid that cover public lighting, refuge collection, infrastructure, tax for rubbish and so forth. These taxes are minimal and are typically less than 200 Euro.

Legal fees:
For all fees and honorary of the lawyer who is leading the procedure – approximately 800 Euro.
Authorized capital that is to be deposit with bank account 5000 BGN (2600 Euro), which can be withdrawn later.
OUR FEES AND SERVICES
Our real estate agency fee is between 2% and 5% but minimum of 1000 Euro. We require our commission at the point we start the legal work leading to signing of the Preliminary Contract. This contract sets out the intention to buy with all the conditions of sale indicating the price and completion date. The Preliminary Contract also involves a payment of a 20% - 50 % deposit to the seller. The rest of the selling price are payable to the seller on the stage of concluding the deal.