Property Buying in Bulgaria
Who can buy property in Bulgaria?
Foreigners can purchase property in Bulgaria. The rights of foreign property owners in Bulgaria are largely similar to those of local citizens. Residency in Bulgaria is not a prerequisite for buying property, making it an attractive option for investors or those looking for holiday homes. However, buying a property in Bulgaria does not automatically grant you the right to reside in the country. If you plan to stay longer, you will need to apply for the appropriate visa or residency permit.
There are restrictions on owning land. Non-Bulgarian citizens are not allowed to own land directly. A common workaround is setting up a Bulgarian company, which can then own the land.
Do the research
Bulgaria is a southeastern European country known for its rich history, diverse landscapes, and cultural heritage. It features a blend of mountains, plains, and a picturesque Varna Black Sea coastline. Bulgaria is also famous for its traditional cuisine, folklore, and warm hospitality, making it an intriguing destination for tourists and investors alike.
Investing in Bulgaria real estate offers several compelling advantages. The country has a growing economy with increasing foreign investment, making it an attractive market for real estate. Property prices in Bulgaria are relatively low compared to other European countries, providing opportunities for significant returns on investment. The country’s membership in the European Union adds a layer of economic stability and potential for future growth. Bulgaria's diverse landscapes, from Varna Black Sea beaches to ski resorts in the mountains, make it appealing for tourism and second homes, boosting rental income potential. Additionally, the legal framework in Bulgaria allows foreigners to own property, which simplifies the investment process.
Financing
Foreigners can secure property loans in Bulgaria. The Bulgarian government permits non-residents to apply for loans, provided they meet the necessary conditions and requirements. Generally, these conditions include having a valid residence permit, proof of income and identity, and meeting the criteria set by local lending banks but are often difficult to obtain.
Due Diligence and Sales Contract
In Bulgaria, due diligence is not legally required, but it is a crucial step in the property acquisition process to avoid potential issues in the future. This process involves thoroughly investigating and verifying various aspects of the property you wish to purchase, including its legal status, financial standing, and physical condition.
In Bulgaria, the property purchase agreement is known as the "Договор за покупко-продажба" (Dogovor za pokupko-prodajba). This formal contract between the buyer and the seller is legally binding and ensures that both parties fulfill their obligations. The process usually starts with a preliminary contract, which outlines key details about the transaction. During this preliminary stage, you would negotiate terms, including the payment schedule, and any required repairs or modifications to the property.
Property Buying Costs and Taxes in Bulgaria
Transaction Costs Who Pays?Property Transfer Tax0.10% - 3.00%buyerLegal Fees0.50% - 1.00%buyerNotary Fees0.10% - 1.50%buyerReal Estate Agent's Fee2.50% - 3.00%
2.50% - 3.00%buyer
sellerCosts Paid by Buyer3.20% - 8.50% Costs Paid by Seller2.50% - 3.00%ROUNDTRIP TRANSACTION COSTS5.70% - 11.50%Source: Global Property Guide, PWC
Footnotes to Transaction Costs Table
Transfer Tax
Transfer tax is set by the municipalities and the rate varies from 0.10% to 3.00%. The transfer tax rate in Sophia is 2.5%.
Notary Fee
Notary fees are around 0.10% to 1.50% of the property value. There is a schedule of notary fees charged in Bulgaria. Notary fees are capped at BGN6,000 (€3,068)