After completing the deal in Bulgaria, property sellers sometimes are given up to a month to finally vacate the property in Bulgaria. That is why often in the notary act (and the preliminary contract) there is mention of a small amount of money to be held back until the official handing over of the property.There are penalties imposed on the seller if they do not meet this obligation.
Under-declaring the Purchase Price
There are several costs involved in the actual Bulgarian property transfer: stamp duty, the notary fee and registration tax.
Stamp Duty
Stamp duty, or the so-called transfer tax, is paid by the buyer and goes to the local municipality where the property is situated. The amount of the tax is 2 per cent on either the tax evaluation or the purchase price, whichever is the higher. The transfer tax is either paid to the notary or paid by bank transfer to the municipality, and the bank document is presented to the notary.There are also bank charges for the transfer, which depend on the amount transferred and the bank charges of the particular bank.
The notary act defines who is the legal owner of the Bulgarian property. It is only valid if ft isin notaryform, signed infrontofand bya notary. You should know this, in case someone tells you that just a simple contract signed between you and them along with payment, is sufficient.
Checking the Reputation of the Bulgarian Developer
In the specific case of buying an off-plan apartment in Bulgaria, besides the usual legal checks, it is advisable to make enquiries into the reputation of the developer. It is also useful to view his previous projects that have been finalised.
The preliminary contract represents a legal commitment between both parties.The seller commits to sell the property and the buyer commits to buy it. you do not have to certify the preliminary contract in front of the notary in order for it to be valid, although, if you do so, this provides more protection for both parties. The preliminary contract is usually drafted and signed in Bulgarian. In case any of the signing parties does not understand Bulgarian, there should be a licensed interpreter present at the signing, and the contract must be translated.There is no problem if the contract is also signed in English if,for example, both parties are English and understand the language, but if the contract needs to be presented to the court or any other state or local institutions, it should be officially translated into Bulgarian by a licensed translation agency. If your lawyer is signing the preliminary contract on your behalf,you may still ask for a translation so that you understand the terms and conditions.
In general your lawyer will check the existing notary act of the current owner or seller. He or she will check the history of the Bulgarian property that you are buying and also if there are any encumbrances on it – mortgages, court claims, court injunctions and so on. Since all notary acts are registered with the Registry Agency, it is possible to trace the history of the property and all previous transactions.
When you have chosen a property in Bulgaria you wish to purchase, the seller, through the agent, may ask you to pay a reservation deposit and sign a reservation contract in order to take the property off the market (this is normally the practice when buying an off-plan apartment in Bulgaria, and is not so common with house purchases in Bulgaria, in case your Bulgarian company is registered and you are ready to pay 100% of the money). The amount is normally 10% of the property price. Paying this deposit shows your serious intentions and interest in buying the property in Bulgaria.
It is very rare to have a deal completed and all legal checks made while you are in the country on your first visit. Most deals take 1-2 months to complete. You can return to Bulgaria at every stage during the conveyancing process to sign the documents, but this is not really a practical or cost-effective solution. In most cases therefore it will be necessary to leave power of attorney with your representatives in Bulgaria.
Of course this is something that can be arranged before choosing a property and agreeing the price, but in practice most people first have contact with a lawyer at this stage of the process. In fact there are no legal requirements to use a lawyer, since the actual rights of ownership over a property can be transferred by a notary with a notary act. A notary is a licensed official who can authenticate documents and perform certain other acts. On the day of the deal they will verify who the buyer and seller are and check that all the paperwork is in order to complete the deal legally.The lawyer’s role is different.The lawyer’s role is to ensure that your interests specifically are being satisfied and to check all the documents are in order so that the notary can legalise the deal.
The procedure for buying a property in Bulgaria is different from the procedure in the UK. This is so, not only because the law and the legal system as a whole are different, but also because of the different habits and traditions of the country. There are some similarities, of course, but in general it is best to understand the specifics and the procedure, rather than try to compare it and make conclusions on the basis of what you know from the UK property buying process.