Buying property in Bulgaria: living where others go on vacation

  • Alexander Susdorf by Alexander Susdorf
  • 3 weeks ago
  • 0

Since 2012, citizens of the European Union have been allowed to buy not only buildings, but also the land on which the buildings are located. Below we provide tips and information on buying property in Bulgaria.

Popular regions and price levels

Until the new regulation in 2012, only residents of the country were allowed to purchase property in Bulgaria, but now foreigners are also allowed to do so, provided they are citizens of a country of the European Union.
A look at the most popular regions shows that the airports in particular are of great importance. There is particularly high demand for real estate in the vicinity of Varna and Burgas airports, and the mountains in the interior of the country also attract buyers. At the same time, these are also the most popular locations for holiday properties. The Black Sea coast is also in high demand, with apartment prices starting at around 30,000 euros. The mountains near Borovets or Bansko are south of Sofia, where prices for new villas are around 100,000 euros. Given this price level, it seems only too understandable that many Bulgarian fans choose to purchase their own property in the country. The costs associated with the purchase are two percent for the notary and registration fees, plus another two to four percent real estate transfer tax, depending on the region. In some cases there is already talk of five percent. The agent's commission is split between the buyer and seller so that each pays half. The annual property tax to be paid is 0.15 percent. These additional costs are often forgotten, but require the provision of a certain amount of equity.

Land acquisition in Bulgaria: What you should pay attention to when buying a property
It is particularly important to clarify the question of whether the property offered is actually owned by the respective seller, because one of the greatest – and not unfounded – fears of property buyers is that the property will be theirs Dreams actually has another owner. It is advisable to ask for proof of ownership for the last ten years, which can be done, for example, by presenting a title deed. A notarial deed, a contract or an excerpt from the land register are possible forms of proof here. In this context, every buyer should know that he cannot rely solely on the notary, because he is not obliged to check the ownership situation. He also does not have to point out to the buyer whether the purchase will later be contestable in court. The help of a lawyer or experienced real estate agent is important here, who is familiar with the applicable local laws and knows from which authority the necessary documents can be obtained.

As a buyer, you should find out about the encumbrances on the property.
Get an up-to-date certificate for this, as well as a so-called commissioning certificate when buying a new property. This is also referred to as certificate no. 16 and allows the use of the object. If the certificate is not available, you may not be able to live in the property. Furthermore, the certificate according to Art. 87 of the Tax and Insurance Procedure Code is important, because it provides a statement that the owner of the property is debt-free to the state. The owner fills out such a certificate as part of the purchase contract, but there is no guarantee that this information is correct. The official certificate according to the Tax and Insurance Procedure Code is issued by the state and is therefore binding.

Normally, a sales contract is concluded first, which is characterized by a down payment. This is usually between 10 and 20 percent of the purchase price. Buyers should insist on a receipt certifying the payment of the deposit. The preliminary contract should also regulate the procedure for possible withdrawal from the contract. If services are provided, the contract and purpose of use should be listed on the receipts so that there are no duplicate claims. Some sellers use payment instructions that are not very specifically worded and simply ask for the amount again. For this reason, too, it is always important to rely on a trustworthy broker and/or lawyer, because one thing has to be admitted: there are very few reputable sellers in Bulgaria (as in other countries). Therefore, it is also important to have the preliminary contract checked carefully so that the risk is distributed appropriately.

No obligation to be present: purchase via an authorized representative
The personal presence of the buyer is not absolutely necessary for the conclusion of the preliminary contract and also for the notarial contract to be drawn up afterwards. A lawyer or a person with a power of attorney can also regulate these processes. However, it is important that the power of attorney granted is valid and that it entitles you to purchase a property at all. The power of attorney should therefore be checked for legal validity, whereby the content should also be checked. Furthermore, you should only "send" someone you trust to buy the property or to take care of the details, so that you are not cheated in the end.

Even if you cannot be there to arrange the purchase yourself, you should not decide to buy out of a holiday mood. Visit the selected location multiple times, talk to the people there. See the area through the eyes of a local and check out all the facilities that may be important for continued life here. Are there shops and service providers on site? What about medical care? Are there other expatriates nearby? Many of these points do not seem relevant at first glance, but they turn out to be quite important in everyday life and, if they do not fit, can become a serious problem. Furthermore, you should of course check the documents provided carefully: It is best to make sure on site that the property described is actually where it was stated.

Special case: Purchase of building expectancy and agricultural land
Not every property may be freely bought by foreigners, even if they come from the European Union: This is about building expectancy and agricultural land. Both types can only be bought through a legal entity, which is why the establishment of a Bulgarian company is necessary. This buys the property, which in turn can be used by the interested party. However, the company holds the property and is not commercially active. But be careful: a zero balance must still be drawn up every year, which entails costs. Up to 300 euros are incurred for this annually. EU farmers are allowed to buy agricultural land, which has been possible without any problems since 2014. The purchase ban was supposed to be extended until 2020, but the constitutional court in Sofia had ended the purchase ban and even declared it unconstitutional. However, the prices for good agricultural land have risen since then and are sometimes three times different than previous farmland prices.

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