Procedure for buying a property in Bulgaria

23 Jan 2023

Bulgarian law allows foreign persons to buy property in the country but with some limitations. All foreign natural or legal persons can buy apartments in Bulgaria on their own names, provided that the apartments don’t come with ideal parts of the land on which the apartments were built. Most of the apartments for sale in Bulgaria are sold without parts of the land, so we may say that in most of the cases you will be able to buy an apartment without any limitations.

When buying a house with a garden or a plot of land one must know that generally land cannot be sold to foreign persons and can only be bought by registering a Bulgarian company.

How to buy property in Bulgaria

▪ To begin with finding the property/properties which you like. After that contact the estate agent responsible for the listings and they will advise you on any issue related to buying a property in Bulgaria and will tell you what you want to know about Bulgaria. All this will help you navigate through the great number of offers on the site.

▪ Then choose the date of your viewing trip to Bulgaria so that you can see the properties you chose. We are always ready to help you organize your trip to Bulgaria.

▪ In Bulgaria you will be met by one of our colleagues who will organize your around the properties you wish to view, will answer all your questions and will help you choose.

After you have made your choice the purchase process starts. It consists of the following steps:

1. The chosen property needs to be reserved and taken off the market. After the unit is selected as a rule the buyer has to pay a deposit to the amount of minimum 2,000 EUR. Only after that will the property be marked as reserved on the site and will be no longer available for sale.

2. After paying the deposit a preliminary agreement with the owner is signed within 30 days. The agreement settles the basic conditions which will later be copied to the Notary Deed. The conditions include a description of the property, the price, conditions and terms of payment, and for off-plan properties – the term for finishing the property.

3. Drawing up of the Notary Deed which is considered the legal document certifying the ownership of the property. It is drawn up by the local notary public in the presence of the buyer and the seller.

4. The notary public certifies the deed and registers it with the Registry Agency. This is also noted in the notary deed.

5. Only for legal persons: a week after receiving the Notary Deed the lawyers of Panev and Partners Law firm enter the legal person – buyer of the property – in the system of the Bulgarian National Statistics Institute. The property owner (legal person) will then receive a unique BULSTAT number (ID number) under which all issues related to the property will be accounted. Within a two-week period our lawyers will also register the property and its owner (the company) in the tax office.

Annual tax on the property
After buying a property in Bulgaria its owner must start paying annual property taxes. There are usually two property taxes to be paid: property tax and garbage collection, which are paid at the local municipality.

Of course, the owners will have to pay their water, electricity and heat bills monthly. If they bought a property in a gated development they will also probably have to pay fees for security, maintenance, management, etc.

Renting the property out
Foreign property owners can also rent out their properties. Rental returns usually amount to 2-5% per annum.

Required Documents need for buying selling property in Bulgaria:
1. Document of ownership of the property – the document of ownership of the property, which legitimizes the seller and previous title deeds.
Most common ownership documents:
• Title Deed, registered with the Registry Agency – title deed for purchase and sale, title deed for donation, title deed for exchange, notarized statement of ascertainment;
• Deed, with records for its registration;
• Sales Contract executed under the Ordinance on State-Owned Properties;
• Sales Contract executed under the Municipal Property Act and the State-Owned Public or Municipal Real Estate Act. If executed after 1 June 1996, they must be registered at the Registry Office.
2. Certificate of Tax Evaluation of the property – issued by the tax office at the location of the property. The Certificate of Tax Evaluation of the property must have an address identical to the address of the property as per the title deed, otherwise, the respective administration must issue a Certificate of Identity of Addresses.
The Certificate of Tax Evaluation must list all co-owners of the property.
The co-owners must have no outstanding obligations concerning the property (to have paid the property tax and waste management fees) and this fact must be indicated in the Certificate of Tax Evaluation of the property.
3. Certificate of Marital Status of the seller(s) showing the marital status of the owner (co-owners) as of the date of acquisition of the property.
4. Certificate of Marriage if the seller is married.
5. In the event that the property is not acquired during the marriage, it is not considered MPC (matrimonial property community), but if the property is the registered address of the spouse, a statement is to be filed as per Art. 26 of the Family Code evidencing the consent of the spouse to the sale. The same applies to property acquired by inheritance, donation, and others which are not MPC.
6. In the event that real rights are registered for the property, in order to execute the sale transaction the user must abandon the real right established in their favour – this is carried out by filing a statement for waiver of the right of use. It must be executed at the notary’s office and is subject to registration. If the user is deceased, an excerpt of the Death Certificate must be submitted.
7. In the event that the property is subject to partition – the respective document (contract, judgment), duly registered at the Registry Agency.
8. Sketch of the property, in the event of transfer of land (land plot, yard or part of the yard on which the property/apartment is built). It is issued by the technical service in the district where the property is located and is valid for 6 months.
9. When the property was received as an inheritance – Certificate of Inheritance, Death Certificate of the ancestor, will.
10. In the event that the seller(s) is divorced, the court judgment for the dissolution of the marriage in divorce is to be presented.
11. The specific cases require different documents tracing the history of the property and proving the right of ownership.
12. Certificate of Encumbrances on the property- issued by the Registry Agency, enclosing all documents of the ownership – from the first title deed to the last one, in the case of inheritance –Certificate of Inheritance as well. In the event that the property includes land or parts of land, a sketch of the property must also be enclosed.
13. In the event that the seller is unable to attend the performance of the deal personally, he/she is legally entitled to authorize a third person to represent him/her by means of a Power of Attorney. This Power of Attorney must specifically describe the representation rights granted by the authorizer to the authorized. The Power of Attorney is to be notarized – with certification of the signatures affixed and the content of the document. The Power of Attorney must enclose a notarized declaration under Art. 25, para. 7 of the Notaries and Notarial Practice Act (NNPA) and a declaration under Art. 264, para. 1 of the Tax-Insurance Procedure Code (TIPC).
14. Identity document, other documents individualizing the buyer and the seller (identity cards, certificates of good standing, if the party under the transaction is a legal entity – a decision of the competent authority).
15. When the deal concerns the transfer of a property in a newly constructed building – the relevant documents from the builder/investor – building permits, architectural design and distribution of land, use permit – Act Form 16, etc.
16. Other documents depending on the specifics of the deal. Taking into consideration the diversity of options, it is recommended that the documents on the transaction held by both parties should be checked by your lawyer.