Buying and selling property in Bulgaria involves a structured legal process with specific requirements for both local and foreign citizens. Here are the key legal points and requirements:

1. The Role of the Notary Public

A Bulgarian Notary Public plays a central and essential role in all real estate transactions. The final contract of sale must be signed in their presence. The notary is responsible for:

  • Verifying the identity of all parties (buyer, seller, and any representatives).
  • Checking all legal documents to ensure they are valid and in order.
  • Confirming that the seller has a clear title to the property.
  • Checking for any existing debts, mortgages, or other encumbrances on the property.
  • Registering the new ownership with the Bulgarian Registry Agency.

2. Legal Requirements for Foreigners

Land Ownership: This is one of the most crucial points for foreigners.

  • EU/EEA Citizens: Citizens of the European Union and European Economic Area can purchase apartments, houses with land, and regulated plots of land in their own names, with the same rights as Bulgarian citizens.
  • Non-EU/EEA Citizens: As a general rule, non-EU nationals cannot personally own land in Bulgaria. To purchase a property that includes land, such as a house with a garden or a plot of land, they must establish a Bulgarian limited liability company (OOD). The company, as a legal entity, then becomes the owner of the property.

Remote Purchase: It is possible to buy property in Bulgaria without being physically present. This is done by granting a notarized Power of Attorney (PoA) to a trusted representative, such as a lawyer. The PoA authorizes them to sign all necessary documents and complete the transaction on your behalf.

3. Key Documents Required

A significant number of documents are required for a property transaction in Bulgaria. Both the buyer and seller must provide specific paperwork fail to do so will cause problems.

Documents from the Seller:

  • Title Deed: The original document proving ownership of the property. This can be a deed of sale, a deed of donation, or a certificate of inheritance.
  • Certificate of Tax Evaluation: Issued by the local tax office, this certificate states the property’s tax-assessed value. This value is often used to calculate taxes and fees for the transaction.
  • Certificate of Encumbrances: Issued by the Registry Agency, this document confirms whether the property has any outstanding legal claims, mortgages, or liens.
  • Certificate of Marital Status: Confirms the seller’s marital status at the time of the property’s acquisition. If the seller is married, their spouse may need to consent to the sale.
  • Sketch of the Property: A cadastral sketch of the land, issued by the Agency for Geodesy, Cartography and Cadastre. This is particularly important for properties with land.
  • Proof of Paid Bills: Certificates showing that all property taxes, utility bills (electricity, water), and maintenance fees have been paid.

Documents from the Buyer:

  • Passport: A valid passport or other form of identification.
  • Declarations: Several declarations are required, including a declaration of citizenship and marital status, and a declaration on the origin of funds to comply with anti-money laundering regulations.
  • Power of Attorney (if applicable): A notarized Power of Attorney if a representative is signing on behalf of the buyer.
  • Company Documents – documents of the company that has been set up and its UID number.
  • Company Bank details – Document of the business accounts, this is helpful with other matters around the buying and owning of the property.

4. The Transaction Process and Legal Stages

The process for buying or selling property in Bulgaria typically follows these steps:

  1. Preliminary Contract: Once a price is agreed upon, a preliminary contract is signed. This legally binding document outlines the terms of the sale, including the price, payment schedule, and a deadline for the final sale. A deposit is typically paid at this stage (usually 10%).
  2. Due Diligence: The buyer’s or and their lawyer conducts a thorough legal check on the property to ensure the title is clear, all documents are in order, and there are no legal issues or debts associated with the property.
  3. Final Contract (Notary Deed): The buyer and seller (or their representatives) meet with the Notary Public to sign the final contract. The remaining balance of the purchase price is paid at this time.
  4. Registration: The notary registers the new deed with the Property Register on the same day. This registration officially transfers ownership and ensures the buyer’s rights against third-party claims.
  5. Post-Sale Registration: The new owner must register the property with the local municipality within two months of the purchase to ensure they are billed for future property taxes. The notary may do this for you along with minutes for the company.

5. Taxes and Fees

Both the buyer and seller are responsible for paying certain taxes and fees. These costs are typically calculated based on the property’s tax-assessed value or the purchase price, whichever is higher.

  • Notary Fees: The buyer usually pays these fees, which are set by the government and vary depending on the property’s value.
  • Property Acquisition Tax: A municipal tax (stamp duty) paid by the buyer, typically ranging from 0.1% to 3.5% of the property value, depending on the municipality.
  • Registration Fee: A fee of 0.1% of the property value for registering the deed with the Registry Agency.
  • Legal Fees: It is highly recommended to hire an independent lawyer to represent your interests. The cost for their services is separate from the other transaction fees.
  • Translator: You may be required to have a translator present (for legal reasons)
  • Capital Gains Tax (for the seller): Sellers may be liable for capital gains tax on the profit from the sale. However, there are exemptions for EU tax residents selling a single residential property after holding it for a certain period.

Remember:
When you buy a property it is “sold as seen” not as described or inferred, you are buying what is set out on the outline of the property from the property deed only. Therefore it is essential that the document is correct and accurate. it can take months to update the documents if they are wrong.

Bulgarian sellers do not prepare for sale. Due to the market being slow for sellers, they do not keep the documents ready for the sale of the property. The requirements and how sales are processed are different to the UK. For example showing all debts are paid and there are no leans on the property a year ago or even 6 months ago is not good enough.

Bulgaria is a old type administration, therefore there are a lot of documents that need the rubber stamp, if you are not accustomed to this, you are under 40, but things can take time and cost money each time. They can have a format which means they have to be carried out in order.
It can take around 6 weeks to be able to buy a property, it can take months.

Watch out for illegal properties.
Some properties are not noted and registered and may not have an accurate document to reflect what you are buying. The “wrong” documents could cause a tax value problem which may amount to fraud.
In the house markets there is some bending of the rules which is common practice across everything

Estate agents. Within the roles of the UK estate agents the Bulgarian system is not and should not be confused with the two, In Bulgaria, they are Sales Brokers. The information can be wrong, misleading and inaccurate. They are NOT structural engineers, conveyance experts, and are not legally bound over.

We will have a demonstration of Yantra Homes verses reality video coming out soon. But there are other agents where “the roof has been repaired” this definition may vary, but we put a bag over it would be fairly accurate or push metal sheet over the problem.
IN short we would say, Don’t trust your agent, do your own work and inspection. I have seen too many complete false and misleading videos and representations in person and online.

The information here does not constitute legal advice. This is a simple summary of information for your to do your research. You are pretty much on your own, if you have a builder friend bring them along with you as well as structural engineers familiar with historical buildings. – Building regs came to Bulgaria in the 1970s. and in general the standards are different walls wont be tied and much much more, but this is acceptable. Your views may differ and any expert will think your bonkers. 🙂