Bulgaria has one of the most liberal legislations in Europe when for foreigners to buy property. There are no restrictions whatsoever - every foreigner can purchase residential property or commercial property, for private use or for renting purposes. Only if a foreigner wants to buy land, up to now he has to set up a limited company and this company will be the legal owner of the land. (This law is also expected to change in the very near future.)

But no matter how liberal the law may be, no matter how easy it is to buy, we always recommend the use of a respectable, English speaking, Bulgarian lawyer, who protects your interests and leads you through the whole buying process, until the signing of the Title Deed.

The Buying Process

Buying a property in a foreign country is probably the second biggest investment in your life and therefore it is absolutely mandatory, to understand the complete buying process. Only then you will be able to make the right decision for your Bulgarian property investment. To make this as convenient as possible for you, we have summarized the basic legal and tax-info for you.

When buying a property in Bulgaria, there are three steps to follow:

1. Initial Reservation
2. Preliminary Contract
3. Title Deed

Obviously, before making the Initial Reservation, you have to look at the available properties and choose one of them. After negotiating, your chosen property will be taken from the market. At this point you have already appointed a lawyer, who is checking all the paper-work.

The Preliminary Contract contains all necessary information about the buyer and the seller, such as addresses, contact numbers, the description of the property, the method how the payment will be made, the selling price and the date when the possession of the property through the new owner will take place. The Preliminary Contract is a binding document for both Parties.

Finally, the end of the buying process is the signing of the Title Deed. This, according to Bulgarian law, has to take place in front of the public notary and both, the buyer and the seller have to sign. This document transfers the right of ownership from the seller to the buyer.

Bulgarian Taxes and Fees when purchasing Real-Estate

VAT: unavoidable in every country! In Bulgaria it is 20 % and in most cases included in the price. The seller submits the VAT to the state.

Annual Property Tax: this tax is calculated on the basis of the tax-evaluation of your property. The amount can be paid in full at the beginning of each year or split up in 4 instalments. The calculation is: 0,25 percent of half of the tax-evaluation - which means, about 250 Euros for a 200.000 Euro property.

Rental Income Tax: first and foremost, foreigners only pay Income Tax on income they achieve in Bulgaria. So, if you do not rent out - you do not pay! And if you rent out, the first 1440 BGN (around 720 Euro) are free and everything above that amount gets taxed with 10 percent.

Notary and Municipality Fees: this includes the stamp duties and all further fees, which need to be paid on the date of the signing of the tile deed. This amount will be around 3,5 percent of the purchase price.

Garbage Collection Fees: it is around 150 Euros per year and it is paid annually with the property tax.

Insurance Fees: it is strongly recommended to insure your new property. For a furnished apartment the fee is between 200 and 450 Euros per year.

Buying a property in Bulgaria can be very easy and very simple, when you have sufficient knowledge of what is awaiting you. And this knowledge will also help you to a more fruitful relationship with your lawyer, when you know what you need to ask. We hope, this little summary gave you some insight and it we hope it will be of help to you. Should you need further information, please contact us at anytime!