Essential Forms - top
Complete an English translated version of the Registration Act Form G1


Independent advice - top
Would you buy a property in the UK without using a qualified lawyer?

It is common in Bulgaria for real estate agents to offer a ‘full service’: that is as well as handing the sales from the seller’s point of view, their ‘legal department’ acts for you.

Generally this is fine, but buyers need to make sure that all the loose ends are tied up. For example in Bulgaria a property needs to be officially ‘signed off’ with what is called Permit Utilization Permission, Act 16…… this ‘loose end’ sometimes gets overlooked.

And first time-in-Bulgaria buyers may not be aware of the common practice of under declaring property values on Notarial (title) Deeds. You may be told this is to save taxes…. Or not told at all!

Before signing the preliminary contract you may wish to consider whether or not to place the property in a limited liability company, whether to register for VAT and reclaim the VAT (20%) included in the price of the property. Some agents suggest that each property is bought in the name of a separate company – the reason given is that you can then sell the company with the property as an asset. Not always a good idea…

Your real estate agent is unlikely to be willing to help you structure your affairs to your best advantage. We recommend that independent advice and due diligence is taken from Bulgarian lawyers in Bulgaria: we can help. The lawyers we will put you in touch with will find out if the seller owns the land your off-plan apartment is being built on: often they do not. Don’t panic; if this is the case, as long as the developer has proper permissions and a contract to buy it later, and as long as your payment schedule is in place there is little to worry about.

There is a lot of information about the process of buying property in Bulgaria to be found on the Internet. Here we aim able to fill in the gaps…

Owning a Bulgarian company - top
Under Bulgarian Law, the only way a foreigner can purchase land is to buy it in the name of a company owned by himself; however forming a company is relatively straight forward. But; purchasers do need to remember that certain obligations are attached to owning a company in Bulgaria - as indeed they are anywhere else in the world. Formalities include having a registered address in Bulgaria and filling annual returns. Quite often the selling agent will arrange this for you; however it is prudent to ensure that your affairs will be looked after the sale has gone through.

Managing the Legal formalities from the UK - top
It is possible to complete most of the legal formalities from the UK using a Power of Attorney (PoA). The PoA needs to be legalised – this is the process of attaching an Apostille issued by the British Government’s Foreign and Commonwealth Office to the document. Before this can be done the documents have to be signed by the person named in the deed in the presence of a Notary Public (notary) appointed by the Court or by Royal Authority. Notary Bulgaria can arrange this via their network of Notaries Public throughout the UK. www.MyNotary.co.uk


Official registration and tax valuation - top
It is a common practice in Bulgaria for the sellers to under declare the value of real estate. This is technically illegal; however no cases have come before the courts as it is always done with (technically) the consent of both the buyer and seller. Often the buyer is totally unaware that they have consented to their land or apartment being entered in to one of Bulgaria’s 280 land registries at a value of much, much less than they have paid. Often reasons given for this practice is to “save property taxes...” This is true, but mostly it is the seller that saves income or corporation tax!

There is much speculation as to whether, when and how this common practice will be stopped.

Property is given a ‘tax valuation’ by the state; this is often much lower than the market value or sale price. Sometimes this lower price is the price declared in the Notarial Deed. The Bulgarian equivalent of UK stamp duty is reduced, and annual property taxes are less.

The sting comes if you want to re-sell the property and the buyer will not accept a lower tax evaluation. In the case of land, often the buyer would wish to have the land ‘under declared’ as VAT, currently at 20%, becomes payable on the ‘value’ of the land when it is regulated (developed). However, in certain occasions there is no capital gains tax and the 20% VAT is charged only on th evalues of new buildings or the value of construction works. Again there are lots of exceptions...

Property cannot be deemed to be sold for less than its official valuation, however in a rising market there if often a significant valuation difference.

Title validation after purchase - top
We can check that your property has been fully and correctly registered and whether there are any mortgages registered against it. Contact us

For Wills and inheritance tax planning - top
IThe inheritance procedure in Bulgaria is pretty straightforward when the deceased is a Bulgarian. However when it comes to inheritance between foreigners the procedure is much more complicated. It involves lots of bureaucracy in obtaining a bunch of special documents from abroad and legalizing them to be used in Bulgaria.  In order avoid these difficulties it is advisable that you either make a separate Will in Bulgaria or have you existing Will notarised. Contact us for an information sheet

Company formation -Contact us for an information sheet - top