Buying a Property in Bulgaria
Here are a few guidelines on buying a property in Bulgaria. The procedure is very straight forward if you use a good lawyer. We have a very good English speaking lawyer who can assist you in your property purchase in Bulgaria.
Legal costs are quite cheap compared to some countries like Spain.
Lets start at the beginning.
When you have found that dream Bulgarian property, you need to take it off the market. in other words put down a reservation deposit. For a new build property or as it is more commonly known "off plan" a reservation fee of between 2, 000 € - 6, 000 € ( depending on the development ). At the signing of the preliminary contract of sale you would pay approximately 30% of the purchase price, this would then be followed by stage payments over the build period and the final payment for your property would be when you receive the keys. Buying a resale property ( like a country property) usually a 10% deposit is paid and the balance on completion at the notaries. this procedure on an average takes about 4 weeks.
A word of warning on paying deposits etc. Bulgaria is not the most up todate country in the world when it comes to withdrawing money from ATM´s (cash machines) or accepting credit card payments.Only a limited number of banks in Bulgaria will allow you to withdraw cash from your credit cards.The piece of plastic is not very popular in Bulgaria.The ideal form of payment is either cash, travellers cheques or bank transfer. When you do pay your reservation fee your lawyer will automatically open a Bulgarian bank account for you.
Prices qouted for a property for sale in Bulgaria do normally include the VAT, all the properties are freehold, and you do not have to set up a Bulgarian company to own the property. This only applies when you are buying an independent villa.
When buying a new build property in Bulgaria you will receive a ten year building guarantee. This guarantee will be written into the contract under Bulgarian law.
Lets look at lawyers and the legal costs.
We have a very good lawyer who speaks excellent English and charges only 450€ irrespective of the price of the property. This figure includes all the searches, paperwork and power of attorney if you are unable to travel back to Bulgaria for the completion. The choice is yours, you can either use this lawyer or get your own.
Now the legal costs. Local taxes and notary fees usually come to about 5% of the notary price. This is the property tax value. How this works is that the local council evaluates the cost of the property, in some areas this is not the FULL purchase price but a figure equating to about 30% of its price. As a rule of thumb if you budget for 3% in addition to the purchase price, you should be on the right side.
If you need to fund buying your property in Bulgaria, I would recommend a UK mortgage as Bulgarian mortgage interest rates are higher than most countries in western Europe.
However here are the main points of a Bulgarian mortgage for non-residents.
Up to 70% loan to the value of the property.
Maximum term of the mortgage is 15 years.
Minimum amount of mortgage to be borrowed 40000 €
Variable interest rate approximately 7.5% per annum.
Approval of the mortgage is usually 6 months prior to building being completed on off plan properties and 3 weeks on a resale.
Please remember all mortgages whether Bulgarian or foreign are always subject to status.
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