Bulgaria has emerged as a promising option for investors all over and has been creating lucrative offers for European overseas property buyers. Low prices and rental opportunities for both summer and winter days makes the country attractive for overseas property investment.
Initial concentration for property investors was in the coastal beach resorts of the Black Sea but the Bulgarian housing market has developed a variety of property, catering to the differing interests and needs of international buyers. The investors now have an option between mountain ski resorts, historic villages, coastal properties and apartments in Sofia.
According to the Bulgarian law, foreign nationals can buy buildings but not land and the purchase of land can be made possible by setting up a limited company, which can officially own the land for them. When the foreign investors purchase a leasehold property such as an apartment, they can do so without setting up a Bulgarian registered company.
Buying Bulgarian Property
Buying Bulgarian property is a straightforward process and the real estate agents can be of great help to the investors. The investors need to find the property on offer, suiting their budget and requirements. They need to ensure that the related terms and conditions are included in the preliminary contract, with the assistance of a legal advisor. Foreign nationals are permitted to buy buildings but not land and can own it by setting up a limited company.
Limited Company
A shareholder in a limited company is liable for the company’s financial commitments up to the value of his share in the company’s registered capital. The liability of the shareholder is limited to the full amount of the shareholder’s investment in the company, if the company incurs any expenses or debts. Anyone can form a limited liability company in Bulgaria. Being a Bulgarian is not the criterion for doing so and this enables the foreign nationals to purchase Bulgarian property indirectly.
Setting up A Limited Liability Company
Setting up a limited company in Bulgaria is relatively easy and many Bulgarian estate agents can provide service in the field. Companies can be of the types of general partnership, limited partnership, Limited Liability Company, Joint Stock Company and partnership limited by shares. The founders of the company should be Bulgarian or legal foreign nationals. An individual can participate in more than one company, to the extent they comply with the law.
People can get bargaining power once the company is registered and that can catapult the buyer in a more promising position. The owner of the company also owns the land. The company should be added into the Commercial Register of the district court of the region, with the consent of the district court to permit the incorporation of the company and registered with the National Tax Register Authority.
Know About the Taxes
Property transactions are subject to tax in Bulgaria. Corporate tax is the direct tax on the transfer of property, along with the Notary fees. Municipal fees of 2% of the market value are also payable on completion. When the company sells the property, Capital Gains Tax is not charged on the profit made. Property tax at 0.15% of the list value of the property is charged as the Property tax for the owner of a building or building plot. The value of the plot gets added if the building is on a municipal or State-owned plot. Local tax is not payable on arable land. Waste collection fees are also collected by the building owners. A VAT of 20% is payable on all real estate transactions, excepting land and lease of property for residential use.
Estate Agent Charges
Fees charged by agents vary enormously, depending upon the levels of service furnished. The buyer can be charged from 3% of the purchase price to 10%. Generally, a minimum commission is charged which might include the viewing and transport charges sometimes.
Popular Bulgarian Property Locations
A greater portion of the demand for Bulgarian Property originates from the investors in overseas property from The Eastern Europe and Ireland. Barovets and St Vlas are some of the popular areas to invest in Bulgaria, along with Sofia and Varna on the coastal regions of the Black Sea.
