Buy Properties in Bulgaria

The Off-Plan Purchase Process

When you have chosen to buy properties in Bulgaria that are off-plan, the first step is to take the property off the market and reserve it for a limited period of time.

This is done by paying the estate agent a non-refundable reserve fee of anywhere between 500 to 1000 euros, which typically buys you 30 days to arrange for signing a private sale contract and making the first payment. The reserve payment should be accompanied by a signed contract (reserve contract) that specifies the terms of this payment. Don't make any payments when you buy properties in Bulgaria without a signed contract that you understand.

Once the reserve is paid, then you have 30 days (or the period specified in the reserve contract you have signed) in which to do all the appropriate checks before you go past the point of no return. This point comes when you sign the private sale contract and make a substantial non-refundable payment of around 20%. Once you have signed the private sale contract with the developer and made the first payment to buy off-plan Bulgarian property, there is not much to do until the off-plan property has commenced construction.



The second stage payment of 20% is usually requested when the first floor has been completed, and this can take anywhere between 12 and 18 months. The third stage of payment when you buy properties in Bulgaria is made on the completion of the roof – again this is usually 20%. And finally, the remainder of the funds of 40% is sent upon completion of the development.

Please note that these amounts are approximate figures, and each developer specifies different stage payment amounts within their payment contracts.

Final Legal Checks

Once you buy properties in Bulgaria and the transactions have has been completed, you can take possession by signing the public deeds before a Notary. Before doing this, your lawyer will need to carry out a series of final checks:

* Confirm that the property has been certified as finished by a registered architect.

* Verify that the property has been given a residential-use licence by the local government. Once the property has been built, an official from the planning department of the municipal authority will inspect the property to ensure that it complies with regulations for newly built residential properties.

* Request a land registry filing for your specific property to check that there are no unexpected debts or encumbers on it.

* Have the local authority confirm in writing that the property has no outstanding debts (such as unpaid taxes) with the local government, or other outstanding issues that might cause the buyer problems.

Signing Public Deeds

This is when you gain full legal title after you buy properties in Bulgaria and receive the keys. A document of deeds will be signed by both you and the developer before a Notary, and the deeds can then be submitted to the land registry, at which point you become the owner of the property.

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Deal Completed

At the same time as signing the public deeds when you buy off-plan Bulgarian property, you will need to settle all outstanding payments with the developer and the tax authorities. If you are paying with your own funds, you will need to produce a bank-guaranteed cheque to cover the amount, or demonstrate that the funds are being paid in some other way that is acceptable to the developer (by bank transfer for example). If you are using a mortgage, then a representative from the mortgage lender will be present to confirm that the developer is receiving payment from the lender.

Taxes and Other Administrative Costs

When you buy properties in Bulgaria that are residential from a developer, you pay exactly the same taxes as you would were you to buy a finished property from a developer. You will pay VAT of 20% on top of the purchase price. Any stage payments you make will include VAT, unless the developer has incorporated the VAT within the price.

The relevant taxes that investors who buy properties in Bulgaria will be liable for will vary from person to person due to a number of factors, including your tax domicile, the extent of your business activities in Bulgaria, the nature of the property transaction, and more.

Finally, as is the case when you buy any property in Bulgaria, you will have to pay the Notary fee and the land registry fee. These fees vary according to the price of the property and the number of clauses in the deeds.