Issues regarding property purchase
Can I buy real estate property in Bulgaria?
Under the Foreign Investment Act, a foreigner may acquire the right of property and limited rights of possession of real estates. Foreign nationals are not allowed to possess land.
There is a special regime of granting permissions in cases when a foreign national would like to obtain a permit for right of ownership of buildings and limited rights of possession of real estates in border regions and other territories. Such permits are issued either by the Council of Ministers, or by an authorized body, which takes a decision upon a request within 45 days. Refusals to issue permits are motivated.
Initial Costs of Buying Property in Bulgaria
The total cost of buying a property in Bulgaria will be around 6-8% of the purchase price.
First of all, you will have to pay 3% in municipal taxes upon the signing of the official title deed and about 1% in notary fees depending on the cost of the property. Apart from this you will have to pay 0.1% in stamp duty for registering the title deed.
Note! The above fees are based in the higher range of the declared price and the price estimated by the tax authorities (which is normally not very high). Many private sellers and promoters give you the offer to under declare so that you will initially be paying less in taxes and duties but this is illegal and when you sell the property again you might have to pay more in property gain tax.
If you are buying a property with land you must first set up a Bulgarian company which will cost approx. 1000Eur including legal fees. Apart from this you will have to deposit 2600Eur for the company capital which will be freed up until the company has been registered.
When buying through a real estate agent you will typically have to pay 3% of the purchase price as a commission payment but these days this is usually already included in the shown price.
When seeking legal advice (which is always highly recommended) the lawyer will normally charge around 1% of the property price in fees, apart from this there will be fees involved with translation upon signing the title deed at the notary.
Annual Costs of Owning a Property in Bulgaria
Apart from the initial cost of purchasing a property in Bulgaria you will also have to take into consideration the annual cost of having and maintaining the property.
The annual costs depend on the type of property and can vary from 0.2-2% of the property price.
All property owners pay an annual property tax of 0.15% of the declared value.
Apart from this you will have to pay municipal taxes for waste collection which varies from community to community but will be around 50-200Eur per year.
If you have an apartment or a property in a community there will also be community fees for maintenance of gardens, pools, concierge and common areas (approx. 30-100Eur per month) and you will, of course, also have to pay for the usage of water, gas, telephone and electricity.
If you decide to rent out your property then you will be charged a fixed rate of 10% of the rental income in taxes.
If you have to set up a company to buy property with land in Bulgaria you will have to declare the company accounts yearly and to arrange this you will most likely need a local accountant who will charge about 150-200€ (you do not pay taxes as the company status will be non-trading).