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LovelyHome

75 Alan Hocken Way
E15 3AT
London,UK

Tel: 020 8519 3986
Mob: 079 6639 3611
info@lovelyhome.co.uk

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FAQ

How do we start our property search?

Have a look at the properties on our website and when you have decided which properties you like, send us an e-mail with any questions you might have about the properties using the contact us box located under the photos on every offer. For viewings you need to arrange a trip to Bulgaria and let us know. We will then set the necessary appointments. You can also ask us any other questions that you have, we’re here to help!

Can foreign nationals own land in Bulgaria?

Foreign nationals arent able to own land in Bulgaria directly - this law is liable to change in the next few years. Meantime this obstacle can be overcome by incorporating a business in Bulgaria and owning the land as an asset of the business.

What are current property prices in Bulgaria?

Property prices in Bulgaria are increasing all the time. Property still remains excellent value for the moment. A basic rural cottage can be purchased for as little as GBP 5000, but expect to pay significantly more for a property in one of the beach resorts or cities. Check the Property section to get an idea of what you can get for your money.

What are the living costs in Bulgaria? How much one pays for house insurance, gas, electricity, local and national taxes, to hire a gardener or a builder, to drive a car?

It's not possible to compare living costs in Bulgaria and Western Europe. Living costs in Bulgaria are extremely low! For example the food is generally twice cheaper than UK. House insurance: around 100-200 . EURO per year depending on the type of house, together with the belongings and furniture inside. For a property of price 30,000 . EURO insurance against theft, flood and fire costs about 125 . EURO per year with a decent insurance company like Allianz. Gas: the gas system network is not developed in Bulgaria yet. People here mostly use electricity to cook. For heating: there are central heating systems in the big cities: monthly costs for a 2-bedroom apartment around 120 . EURO. In the small places people use charcoal and wood, which is even cheaper way to heat a house. For electricity, when used for cooking, light or hot water one pays about 30 . EURO monthly. Local and national taxes for owning a property: depending on the place where the property is located, the most expensive area is the capital Sofia, where the annual taxes of 2 bedroom apartment are around 150 . EURO per year, but the rest of the country is around 80 . EURO per year.
To employ a gardener or maintenance man or builder you will not pay much. The average salary in Bulgaria is 200 . EURO per month.

Are there any restrictions on buying property in Bulgaria for a foreign national?

There are no restrictions on buying property in Bulgaria for a foreign national exluding purchase of land (you need to set up a local company for this). You can buy as many apartments in Bulgaria as you can afford!

What is the legal treatment of foreign investors in Bulgaria?

Equal rights for Bulgarian and foreign investors
Priority of those international agreements that guarantee more favorable conditions for carrying out business activities by foreign legal entities
Unlimited foreign participation in all types of business activity registered in Bulgaria.

Because Foreign nationals arent able to own land in Bulgaria directly, which are the preferred types of business organizations with foreign investment?

The most common form of organization for foreign investors is a limited liability company. Other types are general partnership, limited partnership, joint stock company, sole proprietorship, joint venture, branch, holding, cooperatives, representative office. Limited liability companies, unlimited partnerships, public limited companies, limited partnerships, holdings and cooperatives are legal entities. Branches and representations are not independent legal entities: branches may engage in economic activities, they have their own property and compile a separate balance sheet; representations may not engage in economic activities.

If I buy a house, does this mean that I own the land too?

YES, if you become the owner of a property after having registered a company, this means that you are the legal owner of its plot of land too. Subsequently, you are entitled to do whatever you wish with this property, including selling it, renting it out, etc

Do I have to register a company if I want to buy an apartment?

No. Foreign individuals can buy the buildings, but not the land. Company is needed when you want to buy the freehold.

What are transfer fees when buying a property in Bulgaria?

There are notary and municipal fees, connected to the process of buying property in Bulgaria. The notary fees are paid on the higher of the market price or the book value of the property at varying rates, specified in a special notary chart. In addition to this 2 % municipal fee on the market price or book value is paid to the municipality, where the property is located.

What is rhe cheapest way to finance my purchase of a home?

You can use Mortage. If you are form the UK - UK has the most efficient and competitive mortgage market in Europe, and the cheapest way to finance the purchase of a home overseas is by selling or re-mortgaging a UK property. (Re-mortgaging means withdrawing equity from a property whose value has increased by increasing the mortgage on it.)
Acquiring a mortgage from a UK bank based on a Bulgarian property, or from a Bulgarian bank based on a Bulgarian property, will be both more complicated and more expensive (higher APR) than re-mortgaging a UK property.

I have bought a house with plot. Can I upgrade it? What are the laws if I want to demolish current house and build new one?

You need planing permissions for building (from Municipality head architect) independently of type of building project ( new building or additional storey) except in cases this is temporary building (small extensions, log cabins, etc.)
If it is repairs only (painting, change of tiles, pipes, glasses, etc. - without changing of building area) - you do not need any extra permissions from architects or government institutions.

What kind of tax I owe for my property in Bulgaria?

Amount of taxes and fees varies from the place where the property is located in Bulgaria. For the properties owners there are 2 kinds of tax - property tax (is paid annually based on 0.15% of the property value - the valuation is made from tax department and is different from market price) and annual fee for garbage transportation (it is calculated based on value of the property and depends of place and municipality - vary from 1.6 to 5 per 1000). If you have industrial land - this mean you have registered company there in Bulgaria. In this case you must declare activity and incoming (and taxes if you have incoming) to the end of March!

What is the local feeling towards foreigners owing property?

Bulgarians are warm and friendly people in spite of difficulties in their life. Bulgarian people are very tolerant - there is not hostility between different nationality, religions or cultures. The Bulgarians are happy to see people bringing wealth and foreign investment to their communities especially if the foreigners are not stuck-up with their riches.

How a plot of land in Bulgaria can be identified when you buy it, at preliminary contract stage? As it doesn't have an address as such. So, how I will be sure that I am actually buying the plot I think I am and everything is in order.

There are "skitsa" (literally, plan, drawing) in local municipality administration for all of plots located at the territory of municipality. Every plot of land in Bulgaria has (or should have) its own "skitsa" showing the plot location, relative to other plots, size, border measurements and immediate neighbours. These "skitsi" have a functional life of 6 months, ie when buying a plot of land you or your advisers should sight the relevant skitsa not more than 6 months old. They are issued mostly by the regional agencies for agriculture and forests (successors to the land commissions), though slowly some parts of the country are coming under the direct administration of the Cadastre Agency.
In addition to production of a current skitsa for the plot, you (or your advisers) need to satisfy yourselves that you are dealing with a legal owner and, where there are more than one, that the one/s you are dealing with have the necessary authority from the other owners to act on their behalf in the sale of the land.
There are other checks which should be made and documents sighted but the skitsa and seller's authority to sell are the most important aspects.

What is needed capital for registering limited Liability Company in Bulgaria?

The minimum required capital is 5000 BGN (about 2500 EUR). It is required that as least 70% (3500 BGN) of it is raised at time of registration. After the entire share capital has been paid up - these funds can be accessed withdrawn. You need to open a bank account.

Is there capital gains tax or government tax (like stamp duty)?

At present if you buy and sell your property before you have had it for 5 years you will have to pay a capital gains tax. This is aimed at trying to curb the speculators.

What are the stages of process when I buy property in Bulgaria?

In generally the steps are:
1. Choose property: Select your property from Internet or other source or give your preferences for property to a Real Estate Agency and they will select properties by your criteria
2. Negotiations and inspection visit: assure of condition of selecting property. You have to arrange a trip to look at the properties and the investment opportunities
3. Start of legal procedures, concerned with the checking of the property /mortgages/
4. Preparation of all the necessary documents, registration of company on your name if land ownership is required and signing the Preliminary contract. At this stage, first charges occur:deposit payable to the owner which normally varies between 10 to 30% depending on the property; legal fees for registration of the company- £400. You also need to prepare a deposit for the company's bank account - around £1800.
5. Sign the final contract and Notary Act: This is basically the last level of the sale process where the ownership of the property is transferred and the due balance of the purchase price paid to the owner. At this final stage, a Notary fee of 1% of the purchase price and Government Purchase Tax of 2% of the purchase price will have to be paid.

What is the normal deposit paid on a property?

10% deposit is the most common. Thereafter the property is taken of the market and a Preliminary contract is signed by both parties, with dates agreed for payments and transfer of ownership (Notary act).

We are looking to buy a piece of land or property with land to develop. We have seen comments referring to regulated and un-regulated land, could you explain what this means?

About regulated and unregulated plots:
if the plot/land is regulated this means
the land is included in town-planning scheme and you are allowed to
build on it.
If land is unregulated there are a lot of steps to be made before you start build on it (permissions from lot of institutions, local government, organizations, etc.) and you can not be sure your plot will be approved and included in city/village regulation plan.

I am in process of buying a property in Bulgaria. The seller suggests me that we can declare lower price of the property when on the Deed of Transfer. Is this safe to me.

At all it is little illegal but it is not a precedent. In order to avoid paying excessive amounts of Capital Gains Tax (which can amount to as much as 30% of the real purchase price), it is likely that the current owner of the property will not want to declare the real price of the property on the Deed of Transfer. The Title Deeds will therefore display a lower figure than the actual price you paid for the property. This situation will have its financial consequences, such as not having official documents for the real money you spent plus liability for higher taxes if you decide to sell the property afterwards and declare its real value. You will need to consult your broker/lawyer on this and all aspects of the deal to avoid any eventual misinterpretations or oversights.

I know there are commissions for real estates agents - is it better if I made the bargain by my self?

No - find licensed agent! It is important to work with a well established agent who will guide you through each step of the property buying process.


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