Bulgaria is one of the most favored countries for property investors since property is relatively inexpensive in Bulgaria as compared to others. Bulgaria has made its mark into the mainstream of international commerce and has a stable economy. This has also encouraged the ownership of real estate by foreign nationals within the borders of Bulgaria.
Buying Bulgarian Property
Investing in property includes the acquisition, operation, management and disposal of the property, all accomplished in a legal fashion.Only Bulgarian citizens and legal residents can own land in Bulgaria and according to the current Bulgarian Law for foreign citizens, they can buy buildings but not land. However, the restriction is waived if they set up a company which can officially own land and buildings for them.
Acquisition
Foreign nationals can buy land by setting up a Limited Liability Company. The company does not need to operate and can be used as a tool to purchase the property. No such restriction operates for Bulgarian residents. Investors have taken to buying Bulgarian property for holiday and vacation purposes, along with the ones looking for second homes for retreats. Because of the restrictions over land acquisition, many people are opting to purchase apartments in Bulgaria. Apartments are sold as units, without the conveyance of land and therefore, foreigners can directly purchase and own an apartment. The renovation of substantial residents including historic villas and chalets provides an opportunity for the foreigners to indirectly purchase them and use as vacation or holiday destinations.
The purchase of property would comprise selection of property to be bought, title investigation, preliminary contract, title transfer and registration of the property. When the preliminary contract is executed, a 10% deposit is made by the buyer which is non-refundable unless the contract is meddled with. The signing of the final contract must take place in the office of a notary public, followed by payment of all state and municipal taxes.
Local Taxes and Rates
People who own a building or a plot should pay property tax. The value of the plot becomes inclusive in the tax, if the building is built on a municipal plot. Arable land is exempt form local taxes. Waste-collection fee is determined after registration of the ownership with the municipality and should be paid along with the property tax. Registration should be done within 60 days of completion. Small fines can be levied if the criterion is not met.
Value Added Tax
In case of purchase of property for residential use, the VAT (20%) is waived.
