PROCESS OF BUYING

Ownership of Bulgarian properties by foreign investors

I. OWNERSHIP OF LAND & BUILDINGS

• Foreign citizens may have the possession over buildings, the right to build a house on a piece of land and other land associated rights such as the right of use, and the servitudes(passage), but may not acquire land.
• Foreign legal entities and physical persons can however acquire land via a Bulgarian registered company /OOD or EOOD being the equivalent of Limited Company or Limited Company with only one Director/. The company will buy the property and will own the land. You will be the owner of the company and, respectively, of the land.
• Not required when purchasing apartments – as you are not purchasing the land, just the apartment

How to form your Bulgarian Limited Company?

You may do this in person or by authorising us to do this on your behalf through signing a Power Of Attorney. (The Power Of Attorney must be signed and stamped in the Bulgarian Embassy, London).

1. 600 EUR* – for setting up the limited company. Contaxa Services Ltd can provide you full legal assistance to incorporate Bulgarian Limited Company. These fees include lawyers’ fees that prepare the full package of documents, go to different authorities and services to register the company and arrange all procedures and formalities. The full package of documents is officially translated and stamped into English and posted back to you.

* These fees are subject to change in case of any increases in the state fees.

2. 5000 BGN (approx. £1800/EUR 2600) needs to be deposited into a company bank account, which is the starting capital of your company. It stays there for about 4-6 days until registration. After that the 5000 BGN can be withdrawn and used as part of the payment for the property.

3. 100 EUR - bank fees and charges for opening and withdrawing payments from your account.

After setting your limited company you have to sign a Preliminary Contract and pay a deposit/down payment (in most cases 10% to 20% of agreed price). Within 3-4 weeks the whole transaction is completed. After payment of the remaining 90% or 80% of the agreed purchasing price, the new owner receives the Title Deeds of the property /Notary Act/.

Once you have registered a Bulgarian company you can use it for different activities in the future or for other property purchases.

II. WHAT MIGHT BE THE COSTS, INVOLVED IN ACQUIRING A PROPERTY?

The costs associated with the transaction are as in elsewhere in Europe subject to notary and municipal fees.

It is important to note that the buyer must pay all other conveyance fees related to purchasing a home in Bulgaria and only the solicitor can state the exact amount for your chosen property. Please consider:

• Land/Property tax
• Municipal fees
• Lawyer fees
• Notary fees
• Court taxes

Costs involved in acquiring a property are dependent on the declared value of it. You may have heard that you have a choice as to whether you declare the actual purchase price of the property, or the government tax evaluation price (which every property in Bulgaria has with a price quoted in Levs on it - always lower than sale/purchase price). It is legal and quite common by mutual agreement between buyer and vendor the lower government tax evaluation price to be declared on the Tile Deed. This can lessen the Capital Gains Tax liability for the vendor and save the buyer a considerable amount in Land Tax, Municipal fees etc. especially on the more expensive properties. Unless customer advice otherwise the government evaluation tax price will be entered on the deeds.

If you would like Contaxa Services to provide you an estimate of what these may cost e-mail us at info@contaxaservices.com with the reference number of the property and we will give you an example.

Please bear in mind that Tax Evaluation Rates vary by municipality across Bulgaria, as the solicitors’ fee and house prices.

Contaxa Services’ Fees and Commitment to You

Contaxa Services’ fees – we receive 4% commission of the purchase price or a minimum of EUR 600 for our services as your estate agent. The commission is paid once the property has been secured for you, at the same time as the signing of the preliminary agreement.

Contaxa Services Ltd Check the Legality of All Documentation

• Ownership documents (notary act or other document for ownership rights);
• Identity documents (identity card, passport);
• Tax evaluation of the property (made by the Tax Office);
• Plan of property location;
• Protocol for partition (in case there was a partition);
• Certificate that the property is not acting as a municipal property (issued only for land pieces by the department “Municipal property);
• Certificate that the building has been built according to approved architectural plans (required if construction works were done in the property which are not described in the Notary act);
• Certificate for heirs (required if the person specified in the ownership documents has passed away);
• Power of Attorney (required if the seller could not be present during the transaction at the notary’s office and appoints a representative);
• Other documents according to characteristics of the property, for example death certificate, birth certificate, divorce certificate, marriage certificate etc.
• Certificate for mortgages and other liabilities related to the property, issued by the regional registration.

Securing the property and arranging the preliminary agreement If you are personally in Bulgaria to secure the property then 10% deposit is paid and preliminary contract must be signed.

If you would like to reserve a property from the UK we will place the deposit for you and sign the preliminary contract on your behalf. An advanced payment - 20% of purchase price is paid in Contaxa Services Ltd UK account in this case. For more details, please contact us on  0208 3684418;  0773 8717014 or email us info@contaxaservices.com

Signing the final contract /Notary Deed/ The final procedure is done at the government Notary Office.

The final payment will then be made and respectively the Notary fee. The Solicitor and Notary state these fees; they depend on the value of the property entered into the final deed, as already mentioned above.

Declaration of the purchased property in the Tax office

Translating Notary Deed into English language