The Buying Process
Buying in a foreign country can be a daunting and confusing process until you become accustomed to the way the conveyancing process works. Below you will find a brief over view of the buying process - this is based on viewing through me in the Stara Zagora region but should be similar across Bulgaria.
1. Research into various regions of Bulgaria – use
books, internet, magazines etc.
- Decide on the kind of area you wish to purchase in – mountains, lakes,
coastal areas, rural village, city…..
- Decide on the kind of property you want to buy – apartment, small old
house, modern villa, plot of land….
- Decide on whether you are prepared to renovate a property or whether you
want to build from new.
- Decide on your budget for purchasing (and renovating)
- Decide on what you want property for – rental, holiday home, investment…
2. Arrange to visit Bulgaria and the regions you are interested in
– allow at least 3 or 4 days to view property in an area and if you decide
to purchase start the paperwork. Please try and give at least 3 or 4 weeks
notice of visit.
[All
In One Viewing Package Now Available]
3. Email me your requirements – budget, number of rooms, size of
garden, type of area. As long as given enough notice I can then source
properties to match your requirements.
4. Visit Bulgaria and the Stara Zagora region and view properties -
Viewing trips involve a fair amount of driving around (often 200 to 300km
a day).
5. Hopefully you will like the region and find a property you fall
in love with. If you intend to go ahead with the purchase then you will
require at least half a day but full day better (Monday to Friday) to start the paperwork for your
Bulgarian company. Currently all foreigners (non-Bulgarians) require a
company to purchase land (not an apartment) and while the Government has
passed a Bill to repeal this necessity inline with EU requirements, it is
not likely come into force until around 2012. Therefore to purchase a
house in Bulgaria you need to set up a limited company here. This process
now takes around 2 months for company registration, but can be started while you are in Bulgaria and
completed by someone having Power of Attorney for you here.
The first steps for creating your company are as follows and are done
while you are still here in Bulgaria:
a) Choose a company name – this should be something simple and easy to
translate such as a generic term and NOT your name. For example Bluebell
OOD is a good name, RHG Enterprises EOOD is not. If there is just one
share holder then your company will be an EOOD, if there are more than
one, then it will be an OOD.
b) You will need to visit a notary and sign a Power of
Attorney in front of him or her giving the chosen agent authority to act
on your behalf in setting up the company. You will also have to give a
specimen signature and sign a money laundering declaration. A translator
will be arranged to read through the documents to you in English. You will
also need to sign a contract for you as manager of your company.
The agent will then complete the registration of your company in your
absence.
You will also give Power of Authority to the agent to
purchase the house in your company name and complete the registration of
the purchase with the local municipality (to be done within 2 months of a
change of ownership).
Fees
Company Registration – 500 Euros [You should bring this with you to
Bulgaria.]
Company Deposit – You will need to let us have 5000 BGN or 2580 Euros to
deposit in your company deposit account to enable company registration. If
you are not able to bring this amount with you, it can be sent once you
arrive back in the UK. This money is yours and will remain in your company
account until you withdraw it. You can opt to use this money towards the
purchase of your property.
6. A lawyer (not a notary) will check the title
deeds to ensure the Seller has the legal right to sell the property, there
are no encumbrances on it such as mortgages etc and that there are no
other problems in the paperwork.
7. Once back in the UK, you will need to send the company deposit
(if you did not bring this with you to Bulgaria), the deposit (10%) to
secure your property and the commission (3% of purchase price of 500
Euros, whichever is higher). We aim to complete your house purchase as
quickly and efficiently as possible, so if you can send the full purchase
amount required as soon as you are able, we can proceed as soon as your
company is ready. You will also need to send the notary fees (~4% of total purchase price)
for the notary to check and prepare the title deeds, and government taxes.
You will be provided with bank details to transfer the money to and we can
recommend currency brokers for you to use to get a better exchange rate
for pounds to Euros.
8. Once the deposit is received, a Preliminary Contract will be
signed with the Seller(s) and the 10% deposit paid to secure the property.
The Preliminary Contract states what the property is, the purchase price,
the amount of money paid at this point to secure the property and a
completion date as to when the rest of the money will be due and when the actual Notary title deeds are
to be signed by.
The Preliminary Contract also states the penalties if either party backs
out of the deal – seller has to return deposit (often twice the amount
paid) or the buyer loses the deposit if they pull out.
9. Once your company is registered and we have the rest of the
money required to complete the purchase, we will arrange a convenient time to meet the
seller at the appropriate Notary office for the municipality where your
house is located to complete your transaction and transfer the house into
your company name.
The property is then officially yours. Title deeds and Skitsa
(property plan) are usually available 10 to 20 days after the transfer
papers are signed and we will get copies to hold on file for you
(originals often kept by Notary). Translated copies can be made at around
a cost of 50 Euros and sent to you back in the UK.
10. We will then arrange to register the new ownership of your
property with the local tax authority within 2 months of the purchase if
you wish us to (50 Euros fee).
This means you are registered to pay the local council taxes –
municipality tax and rubbish collection tax. The amount depends on the
municipality and the value of your property but is usually only around 20
to 50 BGN a year. Demands for these payments are sent out in around April
each year to your registered company address. Again management can be
arranged for payment of these taxes at an additional cost, as well as your
annual tax form. We can also arrange for your electric and water accounts
to be changed into your name or company name at a cost of 100 Euros.
RENOVATIONS
If you wish me to organise renovations (small or large) on your property,
then we first need an idea of what you want doing. Please keep in mind
that even basic renovations (septic tank, plumbing, new bathroom,
re-wiring, roof repairs, plaster work etc) will cost at least 15,000 Euros
for an average old property here. I will then visit your property with
builder(s) and prepare an itemised quote for you to go through. Ideally
you should come over and discuss the renovations in person and in detail
at the property. Please note that due to the travelling and time involved
in this I charge a fee of 75 Euros or 150 BGN. After receiving the first
initial quote, most people opt not to do all the work or change their
minds about certain aspects and so once I have your feedback I will make
these changes and send you a revised quote.
Once the quote is agreed and when works have started I will send you
photos and report back to you on the renovations.
IMPORTANT POINTS TO NOTE
A. Property Ownership & Title Deeds – Whilst we try and ensure that there
are no problems over ownership of the property you are buying at the
beginning through talking to the owners, we can not be sure there are no
problems until the seller prepares the property papers and these are given
to the lawyer to check.
B. Boundaries – In recent years local municipalities, under a Government
scheme, have tried to realign boundaries in the villages to ensure all
plots are properly mapped on local plans and to make boundaries run in
straighter lines. It is also common in the villages for two neighbours to
have agreed to swap one small strip of land at one end of their plot for a
piece of their neighbours at the top. However, as people in the villages
do not have spare money, they do not make these boundary changes official.
Sometimes property owners have a right of use for a piece of land but do
not officially own the plot. They can apply to have this land transferred
to them officially under law but again due to the cost involved, villagers
tend not to do this.
Therefore sometimes prior to buying a property, the boundaries may need
officially sorting which can take time or after purchase, you may find you
need to get your Skitsa officially changed to show the actual extend of
the plot or to realign boundaries on the property plan.