The Buying Process in Bulgaria
The Buying Process
Buying in a foreign country can be a daunting and confusing process until you become accustomed to the way the conveyancing process works. Below you will find a brief over view of the process for buying property in Bulgaria – this is based on my experience but should be similar across Bulgaria.
1. Research into various regions of Bulgaria – use books, internet, magazines etc.
– Decide on the kind of area you wish to purchase in – mountains, lakes, coastal areas, rural village, city…..
– Decide on the kind of property you want to buy – apartment, small old house, modern villa, plot of land….
– Decide on whether you are prepared to renovate a property or whether you want to build from new or buy an already renovated place.
– Decide on your budget for purchasing (and renovating)
– Decide on what you want property for – rental, holiday home, investment…
2. Arrange to visit Bulgaria and the regions you are interested in & see properties – allow at least a couple of days to view property in an area, get a good feel for the region, look around the village and if you decide to purchase start the paperwork. Aim to visit various different regions. Viewing trips involve a fair amount of driving around (often 200 to 300km a day) and can be fairly hectic if you have lots of properties to view, especially if seeing places in different areas with different agents. Try and plan to have the odd day for sightseeing, relaxing and make sure you leave enough time for getting from one area to another.
3. A company is no longer needed to buy a house (but is for certain grades of agricultural land and woodland) so you can now purchase a house in your personal name in Bulgaria. You may still need to give someone power of attorney to sign on your behalf if you will not be in Bulgaria for the final transfer.
4. A notary here does not work for either the seller or the buyer and simply checks the seller is the same as the person on the notary deed and that the money has been paid as required. He should also check that the municipality taxes for that year have been paid, that there are no mortgages on the property and there should be receipts provided to show bills have been paid. For more thorough checks you need to also engage the services of a lawyer. A lawyer will (or should) check the title deeds to ensure the Seller has the legal right to sell the property, there are no encumbrances on it such as mortgages etc and that there are no other problems in the paperwork. Make sure boundaries are checked carefully.
5. You will need to pay a deposit (usually 10%) to secure your property and sometimes the commission to the agent/lawyer. You should be informed as to when the rest of the purchase price is required so you can arrange for this to be sent over and your purchase completed. You will also need to send the notary fees (~4% of total purchase price) for the notary to check and prepare the title deeds, and government taxes.
6. Once the deposit is received, a Preliminary Contract will be signed with the Seller(s) and the 10% deposit paid to secure the property. The Preliminary Contract states what the property is, the purchase price, the amount of money paid at this point to secure the property and a completion date as to when the rest of the money will be due and when the actual Notary title deeds are to be signed by. The Preliminary Contract also states the penalties if either party backs out of the deal – seller has to return deposit (often twice the amount paid) or the buyer loses the deposit if they pull out.
7. Once various paperwork has been collected together and you have sent the rest of the money required to complete the purchase, plus any taxes and legal fees, you or the agent/lawyer will arrange a convenient time to meet the seller at the appropriate Notary office for the municipality where your house is located to complete your transaction and transfer the house. The property is then officially yours. Title deeds and Skitsa (property plan) are usually available 10 to 20 days after the transfer papers are signed and copies will be collected to hold on file for you (originals often kept by Notary). Translated copies can be made and sent to you back in the UK.
8. The agent/lawyer or you should then arrange to register the new ownership of your property with the local tax authority within 2 months of the purchase (maybe additional costs involved). This means you are registered to pay the local council taxes – municipality tax and rubbish collection tax. The amount depends on the municipality and the value of your property but is usually only around 20 to 50 BGN a year. Demands for these payments are sent out in around April each year to the address you gave as your correspondence address. Again management can be arranged for payment of these taxes at an additional cost, as well as your annual tax form. The agent/lawyer or you should also arrange for your electric and water accounts to be changed into your name.