How to Buy Property in Bulgaria - 2020

If you are thinking about buying property abroad, there are plenty of opportunities to choose from. Bulgaria is one of the locations you should definitely consider!

Bulgaria joined the EU in 2007, which lead to numerous changes in the country’s interaction with the rest of the European nations. There are several things you should be aware of before proceeding with choosing the right piece of property for you.

An important note is the fact that all EU and EEA citizens have the right to buy plots of land in all of Bulgaria’s settlement zones. Houses and apartments that come with parts of the land they are built on are also eligible for purchase. Individuals from nationalities that are not part of the EU or the EEA need to register a company on their name and buy property on its behalf.

Here Is All the Legal Advice You Need

Lawyers and Consultants

You’re free to look for your own lawyer, but to facilitate the process, we can suggest several experienced professionals.

Harmony Suites works with various lawyers and consultants that are experts in Bulgaria’s property legislation. All of them are members of the Bulgarian Bar Association, have the relevant permits, valid verification numbers.

Most importantly, they have plenty of experience in such cases and will do to the work not only quickly but also efficiently.

Notaries

The Bulgarian laws require all property deals to be verified by a notary public. They prepare the contract of sale and take care of the public deeds.

Our company works with the best notaries in Bulgaria, and we’ll be more than happy to suggest several options according to your personal preferences.

Keep in mind that you have the right to be briefed by the notary on all the details regarding the deal before you sign anything.

Translators and Interpreters

A translator or interpreter must be present in the notary’s office during the deal in order for it to be legit. It is in your best interest to find an independent translator who will translate every piece of document, including the contract of sale.

Again, at Harmony Suites, we’ve done the work ahead of time, and we’d be happy to suggest several translators and interpreters according to your specific property case.

Key Points You Must be Aware of When Considering a Mortgage

Different bank services and products need to be carefully compared and studied before choosing one of them. We highly suggest to have your lawyer or consultant with you during this research.

In case you are on your own, the lender employees are obliged to clarify everything for you. When it comes to choosing a mortgage plan, you must compare interest rates and all the fees related to setting up the mortgage and its early cancellation.

Don’t worry about that either. Our experienced staff can help you choose the best mortgage plan. And choosing it wisely is a must as banks can easily repossess the property if you fail to pay mortgage payments.

The bank is also empowered by law to pursue the rest of your assets to compensate for the unpaid mortgage in case your property’s current value is insufficient to cover the debt. In case you are unable to pay, make sure you immediately contact your credit consultant to see what options you have left.

Signing the mortgage agreement is also related to visiting a notary public.

Property Taxation

The National Revenue Agency of Bulgaria is the country’s primary tax authority.

Complaints Regarding the Legal System or Potential Fraud

In case you doubt the legal side of the property purchase deal or you suspect you have become a victim of fraud, there are several steps you can make:

If you think that your lawyer neglected their work or did not act in your best interest, you can file a complaint with the local bar association or with the central authority (the Bulgarian Bar Association);
If you doubt the work done by the court that handled your case, you can file a complaint with the Supreme Judicial Council Supreme or with the Administrative Court in Bulgaria;
If you consider that the notary public appointed failed to follow all the procedures needed, you can file a complaint with the Notary Chamber of Bulgaria;
If you detect potential fraud, you need to file a complaint with the local police department or with the Regional Prosecutor’s Office. Property fraud cases are usually settled as private disputes. If it is a matter of significant fiscal fraud, then the case falls under penal law.

Residence Requirements

If you’re a foreigner and want to stay for periods longer than three months, you have to file an application for long-term residency with the Migration Directorate (which is part of the Ministry of Interior of Bulgaria).

Full Checklist You Need to Complete before You Proceed with the Property Purchase

Make sure you have a copy of the Land Registry extract (or a Municipality Sketch in case the property is not included in it) issued by the local Town Hall. You will need it to double-check these key points:

The property description matches the official dimensions and details;
No debts and charges are related to the property (i.e. mortgages);
The future plans for the particular zone of settlement’s development do not interfere with the property.

You need to check the planning permission of the building you have your eyes on: it will tell you if it was legally erected or not. This is a crucial step, especially when you are purchasing the property off-plan.

The local Town Hall is where you can receive a confirmation about the legal status of the property. You can obtain the same details about rural properties from the regional government office.

You should check the town plan and make sure that the plot of land you wish to buy is not under any kind of restriction.

A good idea will be to check the local Cadastral Office and get an update on the property value and how much its purchase tax would cost you. The tax always depends on the evaluation of the property, not on the actual sale price. You can also hire a chartered surveyor, just to be sure about the market value of the property.

These are the important documents you need to either have or double-check:

Receipts proving the previous owner has already paid the annual tax for the property;
Verification of the property’s clear tax history (just to make sure there are no unpaid taxes for previous years);
A cadastral record showing the exact property dimensions, acreage, and location;
A use permit (the so-called “Act 16”): this one is issued by the Town Hall and confirms that a building is habitable after construction or reconstruction. Central water supply and electricity are impossible to be applied for without this paper;
Receipts proving all previous utility bills have been covered;
A document or written affirmation verifying there are zero liabilities regarding the property;
The title deed, containing a detailed property description;
Verification of the architectural plan approved by the relevant municipality (in case of purchasing the off-plan property)
Verification of the existence of the construction/development company’s insurance covering possible build defects;

Important notes regarding the purchase of a property off-plan.

Buying an off-plan property is a riskier endeavor compared to the traditional in-sale property. These are the documents you should consider checking before making a move:

Design Visa (or planning permission): this document allows the developer to prepare the necessary documentation for construction;
Construction Permit: this document allows the developer to begin construction;
Protocol for commencing of construction;
Certificate of approval of the rough construction stage (“Act 14”);
Certificate of acknowledgment of the building’s compliance with the regulatory requirements (“Act 15”);
The above-mentioned Use Permit (“Act 16”).

Choosing to buy property off-plan starts with signing a preliminary contract and a notary deed. The property transfer is eventually made under that notary deed.

You should not pay the full price in advance; use an installment plan instead. In most cases, installments are paid upon completion of each stage of construction.

Things to check before signing a preliminary contract:

Make sure the plot of land is indeed owned by the developer you need to sign the contract with;
Check the local municipality’s approval of the architectural plan and the relevant documents;
Get a copy of the Cadastral certificate that confirms the exact dimensions of the property you want to buy;
See if the planning situation of the plot of land you are interested in (obtainable from the local Town Planning department) has no restrictions whatsoever.

When the construction process ends and the building is complete, ask for all documents verifying that it complies with all regulatory requirements before signing the preliminary contract.

Steps you can make in case the construction timetable or the end result is not in compliance with the terms and conditions of the preliminary contract:

You can demand a full deposit refund plus interest depending on the delay caused by the developer;
You can choose to extend the deadline. If you decide to do so, it is in your best interest to consult your lawyer.

Sources of Valuable Information Related to Purchasing Property in Bulgaria:

Ministry of Foreign Affairs of Bulgaria: https://www.mfa.bg/en/ - you can find all accredited interpreters and translators on this website, as well as other important information;

National Revenue Agency of Bulgaria: https://www.nap.bg/en/ - you can check taxation regulations and rates on this website;

Bulgarian Construction Chamber: https://ksb.bg/ - this is where you can check if the developer you intend to buy property from (in case you intend to buy property off-plan) is a member of the chamber.

If you still have any questions regarding how to buy property in Bulgaria, don’t hesitate to reach out to us by clicking on the button below.