How to Buy Property in Bulgaria as a Foreigner
Who can buy property in Bulgaria?
Foreigners can purchase property in Bulgaria. The rights of foreign property owners in Bulgaria are largely similar to those of local citizens. Residency in Bulgaria is not a prerequisite for buying property, making it an attractive option for investors or those looking for holiday homes. However, buying a property in Bulgaria does not automatically grant you the right to reside in the country. If you plan to stay longer, you will need to apply for the appropriate visa or residency permit.
There are restrictions on owning land. Non-Bulgarian citizens are not allowed to own land directly. A common workaround is setting up a Bulgarian company, which can then own the land.
Do the research
Bulgaria is a southeastern European country known for its rich history, diverse landscapes, and cultural heritage. It features a blend of mountains, plains, and a picturesque Black Sea coastline. Bulgaria is also famous for its traditional cuisine, folklore, and warm hospitality, making it an intriguing destination for tourists and investors alike.
Investing in Bulgaria real estate offers several compelling advantages. The country has a growing economy with increasing foreign investment, making it an attractive market for real estate. Property prices in Bulgaria are relatively low compared to other European countries, providing opportunities for significant returns on investment. The country’s membership in the European Union adds a layer of economic stability and potential for future growth. Bulgaria's diverse landscapes, from Black Sea beaches to ski resorts in the mountains, make it appealing for tourism and second homes, boosting rental income potential. Additionally, the legal framework in Bulgaria allows foreigners to own property, which simplifies the investment process.
Here are some highly desirable locations for real estate investment:
- Sofia - As the capital city, Sofia is a prime location for both residential and commercial real estate. Key areas such as Lozenets, Vitosha, and the city center are particularly popular due to their vibrant lifestyle, modern amenities, and accessibility.
- Black Sea Coast - This eastern region is favored for its beautiful beaches and sunny climate. Cities like Varna, Burgas, and resorts such as Sunny Beach are popular for both holiday homes and permanent residences, offering a blend of luxury properties and tourist attractions.
- Plovdiv - Known for its rich history and vibrant cultural scene, Plovdiv is Bulgaria’s second-largest city. Areas such as the Old Town and Kapana Creative District are highly sought after for their blend of historical charm and modern amenities.
- Bansko - This town is renowned for its ski resorts and mountainous landscapes. Bansko attracts those seeking a dynamic lifestyle with winter sports and nature activities, making it a popular choice for vacation homes and investment properties.
- Veliko Tarnovo - Famous for its historical significance and picturesque setting, it offers a unique blend of old-world charm and modern living. It is popular among those looking for a quieter lifestyle amidst historical landmarks.
Where to find properties online:
Financing
Foreigners can secure property loans in Bulgaria. The Bulgarian government permits non-residents to apply for loans, provided they meet the necessary conditions and requirements. Generally, these conditions include having a valid residence permit, proof of income and identity, and meeting the criteria set by local lending banks
Due Diligence and Sales Contract
In Bulgaria, due diligence is not legally required, but it is a crucial step in the property acquisition process to avoid potential issues in the future. This process involves thoroughly investigating and verifying various aspects of the property you wish to purchase, including its legal status, financial standing, and physical condition.
In Bulgaria, the property purchase agreement is known as the "Договор за покупко-продажба" (Dogovor za pokupko-prodajba). This formal contract between the buyer and the seller is legally binding and ensures that both parties fulfill their obligations. The process usually starts with a preliminary contract, which outlines key details about the transaction. During this preliminary stage, you would negotiate terms, including the payment schedule, and any required repairs or modifications to the property.
Property Buying Costs and Taxes in Bulgaria
| Transaction Costs | ||
| Who Pays? | ||
| Property Transfer Tax | 0.10% - 3.00% | buyer |
| Legal Fees | 0.50% - 1.00% | buyer |
| Notary Fees | 0.10% - 1.50% | buyer |
| Real Estate Agent's Fee | 2.50% - 3.00% 2.50% - 3.00% |
buyer seller |
| Costs Paid by Buyer | 3.20% - 8.50% | |
| Costs Paid by Seller | 2.50% - 3.00% | |
| ROUNDTRIP TRANSACTION COSTS | 5.70% - 11.50% | |
| Source: Global Property Guide, PWC | ||
Footnotes to Transaction Costs Table
Transfer Tax
Transfer tax is set by the municipalities and the rate varies from 0.10% to 3.00%. The transfer tax rate in Sophia is 2.5%.
Notary Fee
Notary fees are around 0.10% to 1.50% of the property value. There is a schedule of notary fees charged in Bulgaria. Notary fees are capped at BGN6,000 (€3,068).
NOTARY FEE |
|
| TAX BASE, BGN (€) | NOTARY FEE |
| Up to 100 (€50) | BGN30 (€15) |
| 100 to 1,000 (€500) | 1.50% on band over €50 |
| 1,000 to 10,000 (€5,000) | 1.30% on band over €500 |
| 10,000- 50,000 (€25,000) | 0.80% on band over €5,000 |
| 50,000- 100,000 (€50,000) | 0.50% on band over €25,000 |
| 100,000 - 500,000 (€250,000) |
0.20% on band over €50,000 |
| Over 500,000 (€250,000) |
0.10% on band over €250,000 but not more than BGN6,000 (€3,000) |
Legal Fee
The legal fees are generally between 1.00% and 2.00% of the purchase price or tax valuation, whichever is higher.
Real Estate Agent's Fee
There are cases where the buyer shoulders the whole burden of the fee. Hence, the buyer is advised to ascertain whether the vendor expects him to pay or share the fee.