Bulgarian law allows foreign citizens or legal entities to buy a real estate in Bulgaria.

EU citizens and legal entities may purchase apartments, houses with gardens, plots that are within the zoning of the settlements, apartments coming with ideal parts of the land, offices and other commercial properties.

All other foreign persons cannot buy land or ideal parts of the land. If they want to purchase houses with gardens, regulated plots of land or other real estate coming with ideal parts of the land, they need to set up a Bulgarian company.

An acquisition of agricultural land in Bulgaria is subject to additional limitations both to EU and non-EU citizens and legal entities.

In order to verify that the purchase of the property is not hiding any surprises, it is highly recommended to consult with a lawyer prior to signing any contract, as well as during every step of the purchase process.

The real estate due diligence includes but not limited to: ascertaining of the ownership of the property; existence of encumbrances, wills, court claims, execution or security proceedings; unpaid taxes, electricity, water and heating bills; construction requirements, etc. It’s also important whether the seller is married and if the spouse consents in selling property.

The purchase process consists of the following steps:

             1. Deposit agreement

The real estate agencies require the buyer to sign a deposit agreement. The main goal of such agreement is the property to be reserved for the buyer and no longer available for sale.

The amount of reservation fee generally varies between EUR 500 and EUR 2000.

Whether the buyer is entitled to the return of the paid fee depends on the terms of the deposit agreement. More often the reservation fee is non-refundable if the buyer fails to exchange preliminary contract or notary deed within the time period specified. In order to avoid disputes it is recommended that the buyer asks a lawyer to review the agreement before the buyer enters into it and pay the reservation fee.

Notice that it is not a real estate agent agreement. Usually, the agent’s fee is 2-4% of the property price, payable upon signing a preliminary contract or a notary deed, except for those properties for which it is explicitly stated that there is no commission from the buyer.

             2. Preliminary contract

A preliminary contract for buying a real estate in Bulgaria shall be concluded in writing. It contains provisions concerning the essential terms and conditions of the final contract:

  • a description of the property;
  • the sale price;
  • the conditions and terms of payment;
  • a deadline for the signing of the notary deed;
  • the conditions and terms for construction of the property – for off-plan properties;
  • warranties and undertakings of the parties;
  • transfer of the possession over the property;
  • a compensation for damages arising from the non-performance of parties’ obligations, etc.
Usually, the buyer pays 10% of the agreed price as earnest money deposit at the time of the signing of the preliminary contract.

If the buyer fails to perform its obligation, the seller may withdraw from the contract and keep the earnest. In the event that the seller fails to perform its obligation, the buyer may claim the double the amount of the earnest in case of termination of the contract.

It is important to point out that either party to a preliminary contract may bring an action for conclusion of the final contract. In this case the contract shall be deemed concluded as of the moment of entry into force of the ruling of the court.

             3. Notary Deed

Contracts for the transfer of ownership of the real estate in Bulgaria must be executed with notary deeds. A notary deed is issued by the notary public within whose area of practice the property is located.

The parties or their representatives must appear in person before the notary public who, before issuing the act, shall verify the identity, the full capacity to act and the representative authority of the persons who have appeared therebefore.

Where any of the parties has no command of the Bulgarian language, the notary public appoints an interpreter.

Upon the issuing of a notary deed, the notary public verifies whether the seller owns the said property. The notary public is not obliged to check whether the property has any encumbrances. The buyer shall request a Certificate for encumbrances, issued by the Registry Agency, to be presented by the seller before signing the notary deed.

In order to transfer the ownership of the real estate in Bulgaria the notary public requires the following documents:
  • a notary deed or a contract for the voluntary partition of immovable property, as well as court partition protocols concerning such properties;
  • abstracts from the cadastral scheme, drawings of self-contained properties within a building or sketches;
  • a tax valuation of the real estate;
  • a decision of the managing body of the company for selling or buying the property. If one of the parties is a foreign legal entity, a Certificate for good standing is also required;
  • a standard form declaration for citizenship and marital status;
  • a declaration by the seller that he/she does not incur any outstanding and coercively enforceable obligations for taxes, customs duties and compulsory social-insurance contributions. The existence or non-existence of outstanding public obligations on the property is certified in the tax valuation. When the seller has such obligations, the transfer of ownership may be performed after their payment or if the seller agrees to the extinguishment of these obligations from the price and the buyer pays the amount due to the budget;
  • a source of founds declaration signed by the buyer.

The notary public may also request other documents depending on every individual case: a marriage contract, a will, an heir certificate, a certificate on commissioning or a use permit of the property, etc.

When one of the parties is represented before the notary public by the proxy, a power of attorney shall be notary verified.

The notary public registers the deed with the Registry Agency.

The buyer pays the sale price at the day of signing of the notary deed except when it will be paid via bank credit. In this case the seller will receive the sale price after issuance of a Certificate for encumbrances by the Registry Agency proving that the property has been mortgaged in the benefit of the bank and there are no other mortgages over it.

The possession of the property is transferred at the day of the signing of the notary deed. Usually, the seller retains the possession over the property until the sale price is paid in full.

More often the costs related to the transfer of ownership are payable by the buyer. It is also possible the costs to be shared by the parties.

The following fees and taxes are due upon the conclusion of the notary deed:
  • a local tax on acquisition of property. Each Municipal Council determines the rate of this tax. For Sofia it is 2,5% of the higher of the two values – the assessed value of the property or the price a buyer and a seller agreeon;
  • notary fees, calculated on the certified material interest. In case of difference between the assessed value of the property and the sale price – on the higher amount;
  • a registration fee to register the notary deed with the Registry Agency. It is in amount of 0.1% of the certified material interest. In case of difference between the assessed value of the property and the sale price – on the higher amount;
  • bank transfers costs.

For more information or if you want to buy a real estate in Bulgaria please do not hesitate to contact us by e-mail: office@kgmp-legal.com or call us on: +359 2 851 72 59.


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