How to Buy- Part One
 

Land is registered and has a title deed, which will show the Title Number, the location and the dimensions of the land parcel on it, and is very similar to the Title Document in the UK. Until 2014 you will need to create a Bulgarian Limited Company to purchase freehold property, as foreigners are not permitted to own land (but you can buy an apartment without a company). Company formation is simple, and takes about 4 weeks to complete. One point to note is that you will need to deposit 5000 BGL approx 1730 GBP Bulgarian company bank account, so you can create the company: once the company set up process is complete you can withdraw this money and use it to offset the purchase of your property. Having found a suitable property/land you will need to sign an agreement with the seller, which commits you both to the transaction; this usually allows a month for completion of the deal, which does not leave much time for the formation of the company, money transfer etc. On the agreed date for sale, you or your appointed representative will appear before a Notary Public who will satisfy themselves of the validity of the transaction. With all the paperwork in order, the Notary Act will be signed and this transfers the property; you will receive your Deeds the norm is 30 days. If you are buying an apartment you will not need to open a company, however if you intend to rent out the apartment you will need a company so you can pay the tax due on rental income.

 

How to Buy- Part Two
 

First of all, if you are serious about buying in Bulgaria you will also need to bring some cash with you - the deposit for the property normally 10%, the fees for company formation (we charge €650 including first years accounts if the company is not active), the buying fees, (including notary charges and buyers commission) note:- we do not charge a buyers commission which will save you 3% compared to most agents, and the property tax for the transaction. It has to be cash because credit cards have strict limits.

Above All

Understand exactly who you are dealing with. Friends of taxi drivers, a friend of a friend, the hotel cleaner or receptionist and even builders, can vanish with your money leaving you with a worthless piece of paper. Having said that, there are plenty of honest and friendly people in Bulgaria, just trying to make a few Leva by assisting you to realise your goal, so don't be too nervous - just cautious.

Further Information on Buying
 

Throughout Europe, property transactions are carried-out by a Notary Public. These are people who hold a special legal position, a sort of cross between a Lawyer, and a Public Official. Being a Notary in Bulgaria is a really good job, so cases of corruption or error are very rare indeed, and these people may be trusted to perform their function correctly and honestly. It is not necessary to use a Lawyer to represent you at a closing as the Notary will look after the interests of both parties in so far as the validity of ownership, the identity of the parties and the legality of the transfer is concerned. They are however, not a free legal service and will not advise anyone as to their rights or course of action in a given situation, they only uphold the law. Nearly all Bulgarian Estate Agents will require you to visit Bulgaria to sign the documents for company formation and we often represent both parties at a land transfer, and do not require the attendance of the buyer at either the Notary's office or for the signing of company formation documents. This can remove the extra travel costs involved and can save up to £1000 on a deal.

The basic process of a sale goes like this - The buyer sees a property or land-parcel that they like, and wish to purchase. A Preliminary Contract is drawn-up which binds the parties to complete the transaction, usually within 30 days, although this can be extended if required. The Buyer then pays a 10% deposit to the Seller. In the event of the Buyer failing to complete, their deposit is lost, and if the Seller fails to complete, then they must pay the Buyer twice the amount of the deposit. This system does protect the interests of both parties, and is generally a good solution to prevent gazumping. Every document should be translated by a Certified Translator so that you understand what is contained within them. The Notary will not permit you to sign the transfer document without the translated version being read to you.

Small Transactions- At the appointed time, both parties visit the Notaries Office; documents are presented and checked, and the transaction is completed by signing the Notorial Act. Your agent will normally have requested payment in cash prior to the transaction taking place, and you will either have visited a bank with them or actually drawn the money to pay them. Doing business in cash may be alien to British people, but it is the norm in Europe where property deals are concerned.

Large Transactions- Obviously no one is going to be happy about walking around with large sums of money in cash, nor will they want to pay over the money prior to the transfer at the Notary's office, so a different arrangement is used. It us usual for the Buyer to transfer their money into a Bulgarian Bank Account As the transfer of property is taking place, the Buyer pays the Seller at the bank, and the matter is settled.
 

Now, the reason why transactions are done in cash throughout Europe is that almost all European governments levy a tax upon property transactions, a bit like Stamp Duty in the UK, and, in the case of new constructions, VAT at 20%, Obviously the Buyers who have to pay this tax would rather minimise the amount, and so the price that appears upon the transfer document is almost always lower than the actual price paid. I know that a lot of 'po-faced' people frown upon this practice, but it is deeply entrenched, and the advantage to the Seller, of paying less capital gains tax balances the advantage to the Buyer.
Buyers should be aware of this process when planning a purchase, as Sellers can pull-out of a deal if this arrangement cannot be made between them and the Buyer. Indeed, the entire pricing structure of the Bulgarian, and for that matter, European, marketplace depends upon this practice being maintained. One additional point to note is that your annual property tax will be related to the amount that you paid for the property, something to consider as governments seek new sources of revenue, and foreign investors look to be a simple target.

About a month after the transfer, you will receive your Title Deeds.
 

Since your company owns the property, then you must take steps to ensure that someone is acting for you to handle official letters, bills, property tax etc; if these matters are not handled properly then your ownership of the property is put at risk.
 

Whatever your plans, it is vital that you establish a good relationship with someone who understands Bulgarian Property Laws, Planning Laws, Building Regulations, and of course, how things really get done, in Bulgaria. The other factor to consider is that, at the first sign of a foreign face prices can treble, so finding a bargain on your own is difficult.

You will need to find an Estate Agency that has a experience in both countries, who can handle the complexities of purchase, building permissions, money-transfer etc. You will need to judge the competence and honesty of the people you are dealing with for your-self.
 

Estate Agents - Bulgarian-owned and operated agencies are the most common kind: they understand the market, and procedures well, but often take a 'scattergun' approach to showing property to clients, which can be very time-consuming and confusing. Get all documents translated into English by a Certified Translator, and check on the price of company formation and sales-fees before buying.
It is always comforting to see an office with the Agent's name over the door, a landline telephone number, and other signs of a professional business in operation. Be very wary of anyone operating from home or an apartment come office that seems ill-equipped.


There are lots of Agents in the UK with nice websites, offering a service to UK purchasers. While they may be capable, I doubt that they will have the knowledge, and structures in place, to really control the situation properly. Bulgarian Property Law is not complex, but things have to be done properly if a successful and legal outcome is to be reached. Its very easy for someone to visit Bulgaria on holiday, meet a local contact, and set up as an estate agent upon their return.

One last comment about estate agents: we have recently seen a number of rascals moving into the Bulgarian Market. This group have some very dubious members amongst their number, most of whom have a background in Double-Glazing, Home Improvements, and Timeshare sales, who have been drawn into the developing market in Bulgaria. Mostly English, you will very quickly recognise this type when you meet them; please remember my words of caution when you do.

Taxi-Drivers, Waiters, Street-Vendors, and other helpful people: unless you are very brave, please stay away from this type of assistance. Many of them are honest people just trying to make a buck, but understand that they are unlikely to have the knowledge or contacts necessary to produce a legal and correct outcome, and you could find yourself dealing with some unpleasant people, so be warned.