Tips for buying Property in Bulgaria
If you dig around, you can find plenty of property purchase guides for Bulgaria. So why this one will be different? Well, it is because we are not property agents and we don't actually want to sell you property. We are independent solicitors and our job is to advise you in the best possible way, so you don't get scammed or ripped off while buying your second home or just a investment property in Bulgaria. So let's begin with the steps:
Finding the property
I assume that if you are reading this you have already chosen a property to buy. If not, you can google around for local property agents, or you can search ebay.co.uk to find properties in Varna and the region.
Checking the property for encumbrances
Before you buy the property, be sure to ask your solicitor to check it it is free of any burdens. A lawyer in Bulgaria can check for the following:
2. Pending lawsuits
The above can be checked without the consent of the seller, because the Land Registry provides a public register for all properties in Bulgaria. However if you want more specific information about a certain property, you need to ask the actual owner of the property to provide this information. Such specific property information can be the plan of the land (the so called "skitza"); certificate of encumbrances, which includes the history of the property from 1997 onwards; copy of the title deed etc.
Always ensure that the property you want to buy is free of any encumbrances! Otherwise you might find yourself paying for previous owner's debts.
Most of the property agents will insist on signing a preliminary agreement It's not mandatory! They just want to tie you with the particular deal. There is no problem for you to go and directly sign the title deed for ownership transfer. There is also no problem if you pay the whole purchase price upon signing the title deed. However if you sign a preliminary purchase agreement, read carefully the clauses or let your solicitor review it before you sign it! Preliminary agreements are suitable in cases where the deal cannot be executed without taking certain amount of time such as in case of buying with a consequent immediate mortgage. However if you are a cash buyer, you can go directly for the title deed transaction.
Preparation for purchase of property
You can't just pay and get the property ownership transfered to you. Certain prerequisites need to be met. First of all, if you are non-EU citizen you need to register a Bulgarian limited company if you will be buying agricultural (non-regulated) land.
The process is fairly simple and you just need to follow the steps, your solicitor will tell you. It's not so simple to register a limited company now. Due to the heavy anti money-laundering regulations, the banks now refuse to open to non-resident a contribution bank account, needed for opening the limited company. This makes the process complicated. A possible solution would be the buyer to become a Bulgarian resident first. We can assist with this process as well.
If you will buy just an apartment or house, without a plot, there is no need to register a company (or become a resident).
Assuming you already have a company (or if you don't need one, in the second case), you can ask your solicitor to prepare the documents, which needed for title deed transaction. Those documents are (but not limited to): declaration for marital status, company documents (minutes, certificate of good standing etc.), power of attorney (if you will be buying through proxy), declaration for source of money etc. Your solicitor will tell you exactly what needs to be notarized and/or legalized.
You need to decide whether you will sign the title deed in person or you will authorise your solicitor.
Title deed signing
This is the final act of the property purchase. Even if you have paid the purchase price before that, you can't become an owner without you having signed the title deed. The title deed has to be signed at a Bulgarian notary's office. The competent notary is the one in whose jurisdiction the property is located. For example if you buy land in Varna or the area around, you need to sign the title deed before a Varna notary public. If you don't speak and read Bulgarian, you need to bring an interpreter with you. If you have paid only a deposit, now it's time to pay the rest of the purchase prise. Again, due to the anti money laundering regulations, any transaction for a purchase price above 10,000 BGN (~ €5000) has to be done by a bank transfer. Proof of the payment has to be shown to the notary public.
What you need to pay upon signing the title deed is: notary fees, local tax (payable only once, upon ownership transaction), Land registry fees, attorney fees, some bank charges.
After the parties sign the title deed in few originals, the notary has to register the deed to the Land Registry the same day! If the notary doesn't register the deed the same day, the title deed might become challengeable in court! OR even worse, someone else could buy the property the same day and if their deed is registered before yours, you won't become an owner. However this is the worst case scenario and it rarely happens.
If you have bought the property in your own name, you need to register yourself with the Bulstat register. This registry is made to track statistics of all foreigners who buy properties in Bulgaria. The information is also used by the National Revenue Agency to collect data for foreign tax payers.
If you have bought the property on your Bulgarian company name, you don't need to register with the Bulstat register.
The next mandatory registration is with the local municipality (the council). You need to declare the property as your ownership. This is done by filing a declaration no later than 3 months after you have signed the title deed. If you miss the deadline, you might be fined with a penalty for the delay. The penalty amount depends on the particular local council.
You need also to transfer the electricity and water supplier contracts on your name (on your company's name). This is done by visiting the suppliers' local offices. You will probably need interpreter as the employees usually doesn't speak English.
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