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Bulgaria Homes for Sale: Sofia, Varna, Black Sea

Ask for advice before you buy property in Bulgaria Buying property in Bulgaria should only be undertaken with good professional advice. It is essential to use a reputable real estate agent – the boom in what is a largely unregulated market has led to a huge increase in the number of companies selling property, some of which may not have the experience or professional approach of longer established agencies. It is advisable to ask for references from previous customers, particularly other foreigners. Although purchasing property in Bulgaria is similar to buying anywhere else, there are some things you should be aware of.

What is available?
Properties range from villas close to the sea, which can be purchased for EU30,000 to EU75,000 or more, to rural properties, which go for as little as EU5,000. More upscale areas, with price tags from EU150,000 to EU300,000 , can be found along the coast, in the mountain resorts, and in the capital city Sofia.

Keep in mind that inexpensive properties will require extensive renovation and modernization. Houses in villages are especially not built to Western standards, and will most likely need massive renovations to be lived in comfortably. In some cases it may be better to look at the investment as a land purchase where you will want to tear down the house and rebuild.

What is the law about foreigners buying property?
Bulgarian law says that foreigners can buy buildings, but not land. However, foreign companies can purchase property. So, the most common method for individual foreigners to buy land is to set up a company, which then officially owns the land and buildings. The law is expected to change with the expected entry of Bulgaria into the European Union in 2008. And by 2014 all EU citizens are expected to have the right to buy land. But, in the meantime, a company is still required for land ownership. So, if your purchase includes land a Limited Liability Company (OOD) will need to be formed – a process that we can assist you through.

How is Limited Liability Company Formed?
First a company bank account is opened to collect all share capital – the minimum share capital required is BGN 5,000. Shareholders must pay at least one third of their respective shares at time of registration (BGN 3,500).

Next the company must be added to the Commercial Register of the district court where the company will be based. The entry is made after a district court approval. The following documents must be available at the time of the submission of the application to the district court: How is Limited Liability Company Formed?
First a company bank account is opened to collect all share capital – the minimum share capital required is BGN 5,000. Shareholders must pay at least one third of their respective shares at time of registration (BGN 3,500).

Articles of incorporation;
Memorandum for appointment of Directors;
Proof that each shareholder has paid at least one third of its interest, but not less than BGN 10;
Proof that at least 70 per cent of the registered capital has been paid.

The Bulgarian State Gazette will announce to the general public that the company has been formed, but this does not complete your company formation. The actual process of forming your company can take anywhere from between a few days to a few weeks. Finally, your new company will need to register immediately with the National Tax Register Authority. The costs involved are: BGN 3,500 = 70% share capital.

Administrative costs (payable to the state and registration court) are BGN 250 (just over ?70). This is the minimum capital that you need to raise for registration. Once the entire share capital has been paid, these funds can be accessed and withdrawn. Allow between EUR 400 - 700 for charges relating to the formation and registration of your company.

What Other Fees Am I Responsible for?
Apart from corporate tax, no other direct taxes are levied on the transfer of property. The transfer is however subject to notary and municipal fees. The notary fees are paid on the higher of the market price or the book value of the property at varying rates, with the maximum being BGN 3,500. In addition, upon completion, 2% of the market value of the property is paid to the municipality where the property is situated.

Local taxes and rates
The owner of a building or a plot is also obliged to pay a property tax. Where a building is built on a State or municipal plot, the value of the plot will also be included in the tax base. The tax is equal to 0.15% of the book value of the property. Arable land is exempt from local taxes. In addition to the property tax, owners also pay waste-collection fees. These fees are determined when you register your ownership with the municipality, which should be done within 60 days of completion. Small fines are levied where this registration is done after 60 days.

Value Added Tax
Transactions with land and lease of property for residential purposes are exempt from VAT (Value Added Tax), all other real estate transactions are subject to VAT at the uniform rate of 20% assuming that the seller is VAT registered. The buyer is entitled to a VAT refund, provided that it is registered for VAT purposes.

Estate Agents Charges
Fees charged by brokers for introducing you to a property that you subsequently purchase vary enormously, as do the levels of service you can expect to receive from one to another. The buyer can be charged anything from 3% of the purchase price to as high as 10%. More often than not a minimum commission is charged, regardless of the purchase price, of between EUR 500 - 1,000. Many agents in Bulgaria will also charge you to go on viewings (refundable if you actually purchase). Some will just charge you for transportation, if you do not have your own transportation.

What do I need to know about traveling into Bulgaria?
Many visitors with valid passports do not need a visa to visit Bulgaria.

Those from Andorra, Australia, Canada, Estonia, Ireland, Israel, Japan, Liechtenstein, Monaco, New Zealand, Switzerland, UK, USA, and the Vatican do not need visa for a visit to Bulgaria for a stay of up to 30 days.
Those from Austria, Belgium, Chile, Cyprus, Denmark, Finland, France, Germany, Greece, Iceland, Italy, Latvia, Luxembourg, Netherlands, Norway, Portugal, Spain, and Sweden do not need visa for a visit to Bulgaria for a period of up to 90 days.
Those from Croatia, Czech Republic, Hungary, Lithuania, Macedonia, Malta, Republic of Korea, Poland, Romania, San Marino, Slovak Republic, Slovenia, Tunisia, and Yugoslavia do not need visa in accordance with acting international agreements.

Anyone from a country not mentioned above needs a visa to enter Bulgaria. The processing of the visa applications can take up to 10 working days, as confirmation in each case has to be obtained from the Ministry of Foreign Affairs of the Republic of Bulgaria in Sofia

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