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ELITE HOMES
Real Estate Planning and Building
Varna
Tel: +359 894 788 789
+359 877 48 09 08
Skype: elit-homes.com
MSN: msn.elit-homes.com |
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Sofia, Bulgaria
Temp: -3°C (feels like -11°C)
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Varna, Bulgaria
Temp: -2°C (feels like -9°C)
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Bourgas, Bulgaria
Temp: -1°C (feels like -6°C)
Cloudy |
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London, UK
Temp: 2°C (feels like -2°C)
Mostly Cloudy |
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Dublin, Ireland
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Buying property in Bulgaria is a relatively straightforward procedure. We've broken the process down into a few simple steps - follow these and you'll soon be the proud owner of a new property in Bulgaria!
1. Find your property
Here at www.elit-homes.com you can find an amazing range of Bulgarian property on offer from budget to grand residences. Browse our site to find the property that suits your needs best but bear in mind the following:
If the property seems cheap, it may indicate that it:
o Requires refurbishment.
o Is built in an older style
o It's located in a remote area
o Only has an outside toilet
Many new developments, especially on the coast, are sold "off plan" which means that they are currently under construction. You need to ensure that the relevant terms and conditions are included in the preliminary contract ‛ELITE-HOMES‛LTD can assist you as your legal advisor.
2. Set up a limited company:
Foreigners are permitted to buy buildings in Bulgaria but not land. If you are not a Bulgarian national, we recommended setting up a limited company that will then own both the real estate and the buildings on the land. If you are buying an apartment, it may not be necessary to form a limited company.
If your purchase includes land a Limited Liability Company (OOD) will need to be formed.
Who can form a Limited Liability Company & how?
A foreign or Bulgarian person(judicial or physical). The company owners will be liable for the company's obligations to the value of his/hers share in the company's registered capital. Articles of Incorporation are prepared & signed by all shareholders.
A company bank account is opened to collect all share capital. The minimum share capital required is 5,000 leva. Shareholders at time of registration must have paid up at least one third of their respective shares. It is required that at least 70% (3,500 leva) of the capital is raised at time of registration. The company exists from the moment it is added to the Commercial Register of the district court of where the company will be based. The entry is made upon issue of a district court decision for the incorporation. The following documents must be available at the time of the submission of the application to the district court:
1. Articles of incorporation;
2. Memorandum for appointment of Directors;
3. Proof that each shareholder has paid at least one third of its interest, but not less than 10 leva;
4. Proof that at least 70 per cent of the registered capital has been paid.
The Bulgarian State Gazette is the official paper within which all Bulgarian legislation is published.
Publication of the company entry in the Commercial Register does not complete your company formation, it announces to the general public the act of formation. The process of forming your company can take anywhere between a few days to a few weeks. Finally, your new company will need to register immediately with the National Tax Register Authority. The costs involved are: 3,500 leva = 70% share capital.
Administrative costs (payable to the state & registration court) are 250 leva (just over £70). This is the minimum capital that you need to raise for registration.Once the entire share capital has been paid up these funds can be accessed and withdrawn.
‛ELITE-HOMES‛ LTD can assist you in the process.
3. Make sure you know about the taxes
In Bulgaria, as with pretty much everywhere else, property transactions are subject to tax. It's important that you factor these charges into your financial planning.
Real Estate Tax Summary
Apart from corporate tax, no other direct taxes are levied on the transfer of real property. The transfer is however subject to notary and municipal fees. The notary fees are paid on the higher of the market price or the book value of the property at varying rates, with the maximum being BGN 3,500. In addition, 2% of the market value of the property is paid to the municipality in which the property is situated upon completion.This is a little like the UK equivalent of Stamp Duty.
Local taxes and rates
The owner of a building or a plot is obliged to pay a property tax. Where a building is built on a State or municipal plot, the value of the plot will also be included in the tax base. The tax is equal to 0.15% of the book value of the property. Arable land is exempt from local taxes. In addition to the property tax, owners also pay waste-collection fees. These fees are determined when you register your ownership with the municipality, which should be done within 60 days of completion.
Value Added Tax
Transactions with land and lease of property for residential purposes are exempt from VAT (Value Added Tax), all other real estate transactions are subject to VAT at the uniform rate of 20% assuming that the seller is VAT registered. The buyer is entitled to a VAT refund, provided that it is registered for VAT purposes.
4. Put down a deposit on your property
Once you've found the property you want, you will need to place a deposit to reserve it. The deposit is usually 10% of the selling price and is refunded on completion of your purchase.
We will then take the property off the market while you begin the purchase.
5. Sign an initial contract of sale
When the property agent receives all their cleared funds their solicitors will draft an initial contract, which contains details of all the relevant terms and conditions, monies paid and any other information relating to the property transaction.
Once this contract is signed, searches are carried out to make sure that the titles deeds are valid, that any relevant licenses and permissions are taken into consideration, that any debts on the title are brought to light, and that the terms of the final contract are agreeable to both buyer and vendor.
6. Sign the Notary Act
The last step in the buying process is to sign the Notary Act - essentially an official declaration that you have agreed to buy the property. At this point any state and municipal taxes must be paid and any outstanding balance of monies must be paid to the vendor.
The title deed of the property is then transferred into your company name.
Congratulations - you're now owner of a Bulgarian property! |
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