Bulgaria property news and articles

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 Fee

The notary fee is paid to the notary for signing the act. It is usually paid by the buyer, but the parties can agree to distribute it equally between themselves. This is a sample of the current notary fees payable in Bulgaria: Declared material interest Notary fee

Up to 100 leva*                                     15 leva
100.001-1,000 leva                            15 leva + 1.5% for the difference above 100 leva
1,000.001-10,000 leva                     28.50 leva +1% for the difference above 1,000 leva
10,000.001-50,000 leva                  118.50 + 0.5% for the difference above 10,000 leva

50,000.001-100,000 leva               318.50 leva + 0.2% for the difference above 50,000 leva

above 100,000 leva                             418 leva + 0.1% for the difference above 100,000 leva,
but not more than 3,000 leva

1 lev = €0.51; €1 = 1.95 leva; 1 lev = £0.35; £1 = 2.89 leva; 1 lev = $0.70; $1 = 1.43 leva

Registration Tax

Registration tax is usually paid by the buyer, but the parties can agree to distribute it equally between themselves. It is payable to the Registry Agency, but is usually paid in the notary’s office or paid by bank transfer to the Registry Agency and the bank document is presented to the notary. The amount is 0.1 per cent on the higher amount between the tax evaluation and the purchase price.There are also bank commissions for the transfer, which depend on the amount transferred and the bank charges of the particular bank.

Other Costs

Besides the costs above, there may be other costs such as the notary fee for Preparation of the notary act and the interpreter’s fee in case one of the parties does not understand Bulgarian – usually around €15 (£10) per hour.
The notary will put down in the act the agreed purchase price to be stipulated f°r the deal, and the tax evaluation.The tax evaluation is often different from the purchase price, but may be Identical with it.

Handing Over the Money

With the notary act the seller sells you the property and you become the new owner. Of course you have to pay the purchase price to the seller, as agreed. As already discussed, this can be done via bank transfer or in cash.
This physical mechanism of handingthe money overand the seller signing off the notary act is often a fraught situation. The problem centres around who does what first. If you hand over the money in cash or by bank transfer before the seller has signed the notary act, then you run the risk that he or she will walk away from the deal with all your money. Likewise the seller is often unwilling to sign off the notary act until he or she has received his money in case you, the buyer, refuse to hand over the money once he or she has signed.

There are different options to ensure that both parties’interests are protected. The first option is literally for the signing and handing over of the money to happen simultaneously on the desk of the notary, but this is just not practical in most instances. What usually happens is that the parties sign the title deed in front of the notary first, and ask the notary to withhold the signing and registering of the deal until the seller receives his money. Then the parties go to the bank and do a transfer or cash payment, and the seller reports to the notary that he or she has been paid. The notary then proceeds with the signing and registering the deal at the Registry Agency. This is all done on the same working day. If the seller has not been paid but you have a title deed in your name, the seller is still entitled to rescind the contract via the court.