Once you have completed your search and you have selected a property to buy the next step is to contact the real estate agent advertising the property or the owner. Our real estate lawyers will assist you with all formalities to buy a property in Bulgaria and provide you free legal advice and case evaluation.
Our real estate lawyers will assist with the following:
- Verify the ownership rights of the vendor. The PlovdivLegal team is ready to assist you and protect your interests in buying a property in Bulgaria.
- Verify that there are no legal impediments to the transfer of the property. Our legal team will make sure that there aren’t any land charges over the property you are buying – encumbrances like mortgages and pledges over the property by a third party.
- Draw up of the Notary Deed (same as Title Deed in the UK), also called Title Deed. We will draft the notary deed free of charge buying one of our property conveyances packages saving you substantial notary fees.
- Draw up the Preliminary Sale contract. After the property to buy has been determined you should sign a preliminary contract for the purchase of the property with the seller. Usually when you sign the preliminary contract you as a buyer will have to pay a deposit to the seller of the property in Bulgaria.
- Register the Notary Deed with the Property Registry at the Registry Agency, which ensures the rights of the buyer in case of possible claims of third parties. Since then the buyer has every right to dispose with mortgages, rentals, sale etc.
- Assist you to become a resident of Bulgaria for tax purposes
- File a tax declaration, levying an annual tax at the Local Taxes and Fees Department at the municipality where the property is located
- To obtain Bulgarian residence and Bulgarian ID card for EU citizens
- To obtain permanent residence and Bulgarian citizenship by investment in real-estate
Our real estate lawyers in Plovdiv may assist you to buy a property in Bulgaria remotely by granting a power of attorney to our law firm.
For more details about buying a real-estate in Plovdiv, please feel free to contact us.
Procedure for buying a property in Bulgaria
Bulgarian law allows non-EU citizens to buy property in Bulgaria with some limitations. All non-EU natural or legal persons can buy apartments in Bulgaria on their own names, provided that the apartments don’t come with ideal parts of the land on which the apartments were built. Most of the apartments for sale in Bulgaria are sold without parts of the land.
When buying a house with a garden or a plot of land one must know that generally land cannot be sold to non-EU citizens and can only be bought by registering a Bulgarian company. Our lawyers can assist you to register a Bulgarian limited company for only 299 € including all legal & state fees and registered office address. Using our company formation services, we do not charge maintenance or annual fees for the registered office address.
On the other hand, EU physical and legal persons are allowed to buy houses with gardens and regulated plots of land in Bulgaria on their own names as physical persons. The Treaty of Accession of Bulgaria to the EU allowed Bulgaria to keep the prohibition for EU physical and legal persons to buy land in Bulgaria for up to 5 years for land after its accession to the EU. The 5-year term has now finished and since 1.01.2012 all EU persons are allowed to buy land in Bulgaria. This applies to houses with gardens, all plots that are within the zoning of the settlements, apartments coming with ideal parts of the land, offices and other commercial properties. The same applies for citizens of countries from the European Economic Area (EEA).
If you would like to learn more regarding the limitation to buy a real-estate in Bulgaria, please feel free to contact us.
Tips when buying a real-estate in Plovdiv
- Properties in Bulgaria are valued by square meters instead of rooms as for instance in the United Kingdom. A three-bedroom apartment may turn out to be a tiny expensive panel box.
- Real-estate agents mention the total size of the property in square meters without mentioning the size of the common parts (the common parts are non-usable BUT you pay them as regular square meters).
- Some property offers may look very attractive, however, when buying a property in Bulgaria you should always remind yourself that you get what you pay for. There is always a good reason why a property is undervalued.
- Agents’ commission vary between 2,5 % – 3,5 % of the value of the property.
- The price of the advertised properties is usually higher than the real value leaving some room for negotiations. Common practice is the price of the property to be lowered by 5-10% in the course of dealing. We will be glad to assist you in negotiating a better price when buying a property in Bulgaria.
Taxes and Fees when buying a property in Plovdiv
According to Art. 186 of the Obligations and Contracts Act the costs incurred during the sale of the property must be shared equally between the parties.
The following fees must be paid upon the performance of the formalities of the deal at the notary’s office:
- Notary fee, calculated as per the Notary Fees Tariff on the certified material interest (in case of difference between the tax evaluation and the sale price – on the higher amount) + 20% VAT.If the value of the property ranges:
- 50,001 BGN – 100,000 BGN – the notary fee is 480,50 BGN and 0,5% for the amount above 50,000 BGN + 20% VAT
- 100,000 BGN – 500,000 BGN – the notary fee is 730,50 BGN and 0,2 % for the amount above 100,000 BGN + 20% VAT
- Above 500,000 BGN – the notary fee is 1530,50 BGN and 0,1% for the amount above 500,000 BGN but not more than 6,000 BGN in total + 20% VAT
- Legal fee for the property conveyance – 500 € (our fee is fixed for all properties valued up to 100,000 €)
- Plovdiv Municipality tax for the property conveyance – 3%
- Commission of the real-estate agent – varies 2.5% – 3% of the agreed sale price
- Fee for the registration of the title deed with the Property Register at the Registry Agency, amounting to 0.1% of the certified material interest
- Tax in the case of onerous acquisition of property, amounting to 0.1 to 3 %. The tax rate for each municipality is determined by the municipal council. The tax is calculated on the basis representing the higher of the two values – the tax evaluation of the property, determined in compliance with the rates stipulated under Annex 2 to the Local Taxes and Fees Act or the agreed price.
- Bank fees – 20 €
Annual tax on the property in Plovdiv
The owner of the property has to pay annual property taxes. There are usually two property taxes to be paid: property tax and garbage collection, which are paid at the local municipality. Our dedicated team of accountants in Plovdiv will assist you with paying your property annual tax.
Annual Property Tax in Plovdiv – 0,3% based on the value from the property tax assessment
Annual Garbage Tax in Plovdiv – 0,53% based on the value from the property tax assessment
Usually, the tax assessment of the property is lower than the agreed sale price of the property
If the property is valued 50,000 €:
The annual property tax is 150 € (50,000 € x 0,003) and the annual garbage tax is 265 € (50,000 € x 0,0053)
Buying a property in Bulgaria you may become a tax resident of Bulgaria
According to the Bulgarian legislation you can claim Bulgarian tax residency if 1. You reside in Bulgaria for not less than 183 days annually or 2. You prove that the center of your vital interests is in Bulgaria. Under point 1, you will be considered a tax resident of Bulgaria only in the year when you have resided for 183 days. On the other hand, you are not required to satisfy the residence requirement if you justify that the center of your vital interests is in Bulgaria. To determine the center of vital interests, the tax office will consider the location of your business, the country where you pay social contributions, residence permits, properties, family etc.
Buying a property in Plovdiv will substantially increase the chance of becoming a tax resident of Bulgaria. If you are considering to change your tax residency to Bulgaria, please feel free to contact us.
Seek independent legal advice
Numerous property owners are now experiencing problems with their property because they did not seek independent legal advice and instead used lawyers and translators which were recommended by the estate agent or developer and in some cases were acting for both parties. Appoint a lawyer who is experienced in property conveyance and fully independent of anyone else involved in the transaction, e.g. the estate agent, vendor or developer.
Why you should buy a real-estate in Plovdiv instead of ski or beach resorts
Plovdiv has moderately good gross rental yields – i.e., the rental return on a property if fully rented out, before all expenses. Yields in the centre are around 6.0 %. On the other hand, yields in Bulgaria’s beach and ski areas, because rents in these areas are highly seasonal.
Low taxes in Bulgaria
Rental Income: Gross rent earned by nonresidents is taxed at a flat rate of 10%, withheld at source. Deductions are not allowed for nonresidents.
Capital Gains: The sale of real estate by nonresidents in Bulgaria is subject to 10% withholding tax on the net gains received.
Inheritance: Inheritance of direct descendants is not taxed. For all other beneficiaries, the inheritance tax rates vary, depending on the relationship between the donor and the heir.
Some of the reputable and English speaking real-estate agents in Plovdiv
The real-estate agents listed have assisted our clients to find a property in Plovdiv. They are experienced and speak English.
Additionally, we may assist with
- Expert property valuation in Plovdiv– prices vary depending on the property and its location. The price for an apartment is 90 Euro and for a house – 120 Euro. Each valuation request is considered separately with a specific price offer.
- Sketch of a Property in Plovdiv – the sketch of the property is a mandatory document to complete a sale of a property in Bulgaria. Our Bulgarian property lawyers may assist you to obtain a sketch of a property in Plovdiv and other parts of the country remotely by granting a power of attorney to our law firm.
- Tax Evaluation Certificate of a Property in Plovdiv – every property owner has the right to claim a Tax evaluation certificate when transferring the possession of a real estate in Bulgaria. In fact, the tax evaluation certificate is a mandatory document to complete a sale of a property. Our property lawyers may assist you to obtain a tax evaluation certificate in Plovdiv and other parts of the country remotely by granting a power of attorney to our law firm.
- Certificate of inheritance in Plovdiv – the certificate of inheritance contains information concerning the heirs by intestate succession or will. This guarantees the possibility for the heir to take advantage of his rights to succeed the deceased. With the certificate of inheritance the heirs can identify themselves as heirs before third parties and government authorities. The heir may authorise our inheritance lawyers to obtain the certificate of inheritance remotely.
- Certificate of Death in Plovdiv – the death certificate is one of the required documents when applying for a certificate of inheritance. The certificate is issued from the local municipality and the procedure takes one working day. The certificate can be obtained remotely by authorizing us granting a power of attorney.
- Change of the batches for electricity, water and telephone in Plovdiv – 185 Euro in total.
- Assistance for insuring a property or other movable or immovable property – free. The price of the insurance premium is as per the tariff of the insurance company.
- Assistance in obtaining a mortgage loan in Plovdiv – Plovdiv Legal will provide you assistance for free in applying, approval and utilization of a mortgage loan for purchase of a property. We will be advising you of the options available for lending, terms of different financial institutions, information on the loan to value, documents required for application and etc. Our services in assistance to obtain a mortgage are free of charge, but keep in mind that banks charge fees for applying and granting of a mortgage loan, which are calculated by each financial institution.
“I have worked with Plovdiv Legal for some time now and every time the team finds professional and fast solution for any personal or company legal issue. I highly recommend this law firm in Plovdiv, Bulgaria.”
“The lawyers at Plovdiv Legal did an amazing job obtaining everything needed for our company to do the business in Bulgaria. Thank you guys!”