This publication aims to provide a general overview of certain legal and administrative procedures and requirements arising in connection with a purchase of a real estate or land in Bulgaria.
Form of the real estate purchase contract
The purchase of a real estate in Bulgaria is made through a written contract concluded in a special form – a notarial act or deed. The notarial deed has to be signed before a notary officer acting in the court region where the property is located.
Bulgarian Real Estate Register
The notarial deed has to be registered with the Bulgarian Real Estate Register. It is the notary officer who is obligated to submit the notarial deed for registration with the Real Estate Register on the day of signing of the notarial deed.
Restrictions on buying Bulgarian property by foreigners
Buying Building (s) in Bulgaria
There is no restriction a foreign individual or a foreign legal entity to purchase a building (an apartment, a house, etc.) in Bulgaria.
Buying Land in Bulgaria
The Bulgarian legislation distinguishes two groups of foreigners depending on their residency:
– European Union (EU) citizens and EU legal entities and
– Non–EU citizens and non-EU legal entities
As far as buying property in Bulgaria is concerned, EU citizens and EU legal entities have rights equal to the rights of Bulgarian citizens and Bulgarian legal entities, i.e. there are no restrictions for the purchase of land by EU citizens or EU legal entities.
Non-EU citizens and non-EU legal entities can buy constructional land in Bulgaria under the terms and conditions of an international agreement signed between Bulgaria and the respective foreign country of residence or registration of the foreign person. In actual fact, however, we are not aware of any such international agreements signed between Bulgaria and any non-EU country. Therefore, practically, non-EU foreign individuals and non-EU legal entities do not have the right to acquire ownership over constructional land in Bulgaria. Normally, our lawyers advise our clients to overcome this restriction through the incorporation of a Bulgarian legal entity that acquires the constructional land.
Non-EU citizens and non-EU legal entities are restricted from buying agricultural land in Bulgaria, The acquisition of agricultural land by a non-EU citizen is possible only through inheritance or if the person has resided in Bulgaria for more than 5 years .
Real estate transfer taxes, fees and stamp duties
The acquisition of a Bulgarian real estate triggers the following costs:
Bulgarian Local real estate transfer tax.
The tax is paid to the municipality where the property is located.
The real estate tax varies between 0.1 per cent and 3.0 per cent and is determined annually by the municipal council of each municipality. For example, in 2015 the Sofia Municipality has determined 2,5 per cent local real estate transfer tax.
The tax is levied on the higher between the tax evaluation of the real estate and the acquisition price.
Registration stamp duty.
The stamp duty is paid to the Bulgarian Registration Agency (Real Estate Register).
The stamp duty is 0.1 per cent.
The stamp duty is levied on the higher between the purchase price and the tax evaluation of the Bulgarian property.
The notary fee is due to the notary officer.
The notary fee is calculated as per progressive table. For example, the notary fee for a purchase of a real estate or land in Bulgaria for a price of 100 000 euro is approximately 540 euro.
The notary fee is levied on the higher between the tax evaluation of the real estate and the purchase price.
Registration of the real estate for tax purposes
Each owner is obliged to declare the acquired real estate with the respective municipality, upon location of the real estate within 2 months after the acquisition.
Annual real estate taxes and fees in Bulgaria
The owner of a real estate is obliged to pay the following annual taxes and fees on his/her property or land:
Annual real estate tax in Bulgaria
The amount of this tax is determined annually by each municipality.
Currently the rate of the Bulgarian land or pproperty tax varies between 0.01 per cent and 0.45 per cent. For example, in 2015 the Sofia Municipality has determined 0.1875 per cent real estate tax.
Individuals pay real estate tax on the basis of the tax evaluation. Companies pay real estate tax on the higher between the book value of the real estate and the tax evaluation.
Annual waste disposal fee
There are different ways for determination of the amount of the Bulgarian waste disposal fee depending on the type of the real estates and their owner. The amount of the waste disposal fee in Bulgaria is determined by each municipality.
The waste disposal fee for residential real estates is determined proportionally as a fixed percentage over the tax evaluation of the property. For example, in 2015 the Sofia Municipality has determined 0,16% waste disposal fee for this type of real estates.
There are three ways to determine the wasted disposal fee for companies’ non-residential real estates, namely:
– Proportionally as a fixed percentage over the book value of the real estate – for 2015 the Sofia Municipality has determined 1.00 per cent waste disposal fee.
– According to the amountof the waste and depending on the typeandnumber ofcontainersfor waste storage and frequency oftransportation and
– By direct agreement with Bulgarian waste disposal companies.