Purchase of apartments and locals in Bulgaria

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PROCEDURES

Buying procedure:

Conditions of sale and purchase apartments in Bulgaria are the same as in Poland and whole European Union. Purchase is made by notarial act which is prepared and signed in the country in which the property is buying. Transactions in Bulgaria are performed only in Euro.

There are two variants of purchasing:

1. The first option is the purchase of an apartment during an investment trip - a visit to Bulgaria.
2. The second option is the purchase of an apartment remotely (on-line) without the need to fly to Bulgaria, however, we always encourage you to use the first option, because it gives you the opportunity to get to know the area and the immediate vicinity, which is extremely helpful when making a decision to buy.

We would to emphasize that ILS Poland Group is a licensed broker (who has liability insurance) and co-founder of the Polish Chamber of Real Estate – PIN. We care about the best buyer interest in every purchase option. There are three possibilities of signing the contract which has to carry about client interests: in Poland, in Bulgaria or by correspondence.

We also emphasize that our company has its own branch in Bulgaria and residents, and thus we provide our clients with comprehensive services in English, Polish, Bulgarian, Russian and German.

In both variants, buying property is associated with several basic steps. That process is completely carried out by the ILS Poland Group and looks as follows:

1. Signing a contract and,
2. Real estate reservation and/or,
3. Organization the investment trip, including both ways flight and hotel reservation,
4. Pickup from airport and transfer to the hotel and than signing the agency agreement,
5. Presentation of alternative properties according to customer specifies criteria and indication of current developers offers,
6. We negotiate the offer price with the seller on client request. Negotiations are most effective when the payment is a one-time (applies only to purchases from the primary market) or if you are buying at least 2 apartments from one seller (applies to both primary and secondary markets), but only before booking and signing the reservation and deposit agreement,
7. Payment of the deposit (usually about 2.000 EUR) and simultaneous signing the reservation and deposit agreement/contract,
8. Translation and negotiating terms of the preliminary agreement,
9. Signing of the preliminary agreement and payment of the first tranche which can not be less than 30% of the apartment value within 14 days including into account payments already made a reservation fee (applies only to the primary market),
10. Payment of the remaining 70% of the value in installments and dates agreed individually during signing the preliminary contract.(applies only to the primary market),
11. Receiving and commissioning of premises, verification of the facts and parameters of the local in terms of documentation,
12. Organization and signing the final agreement (after formal legal putting the building for use) with a notary in Bulgaria with a sworn translator. Usually until that moment the seller is expected the full price, though it is possible to pay during notarial act or after it in date agreed with seller (in cash or by bank transfer).

Nevertheless, the sites will is clearly specified in the contract what guarantees the security of transaction. Content of the agreement defines the brokers responsibilities and steps for its realization.
To meet your expectations, to resolve any doubts and answer the most frequently asked questions we would like to stress that developers with which we have signed contracts are always tested by us. They often have state guarantee, already comlpleted projects and satisfied customers (eg. Our natives from Poland permanently living in Poland, France, Great Britain, Ireland, Norway and other countries around world including lawyers, economists etc.)

Reservation:

The purchase of any property selected by the customer on the secondary market must always be confirmed by a reservation first, i.e. payment to the seller to a special notarized escrow account created for the seller and the buyer. and only 6-8 weeks after the purchase, the buyer must go to a notarized contract of title transfer and pay the remaining amount of the sale price of the property in one payment by bank transfer to the same Bulgarian bank where both the seller and the buyer must have a bank account.

Reservation of the property chosen by the customer is a must, as more than 99% of sellers are neither Poles nor Bulgarians, only citizens of other nationalities, e.g. Russians, English, Irish people etc. and only the reservation guarantees every seller that the buyer will not give up the purchase, thus exposing the seller to the many costs associated with preparing for the sale transaction.

The costs that must be borne by every seller include the cost of arriving in Bulgaria and / or appointing a sales representative in Bulgaria (usually in the person of a lawyer from some Bulgarian office), as well as the cost of many documents associated with the need to download and delivering before the transaction to a notary office, many certificates, valuations, excerpts and excerpts, copies, sketches and other documents from many offices and institutions, which are issued for a fee, waiting for up to 7 days, and which documents have only one month validity, which the seller ultimately must provide to the notary public, in accordance with Bulgarian law.

IMPORTANT: Each property can be booked, both by signing a brokerage agreement during a visit to Bulgaria, and without having to fly out, by completing and sending the reservation form on our website in the preview of each offer under the description and under the map with the exact location of the given property. And after receiving the form, the person responsible for a given offer sends to the reserving person via e-mail a signed, stamped and scanned brokering agreement (in pdf file) in which the contents are all activities we undertake to undertake and the number of our company bank account in Bulgarian is indicated bank to which, among other things, an advance payment should be made for the seller.

It should be emphasized that the reservation of any property from our offer is associated with the necessity to make two payments by the person making the reservation (after signing an agency agreement with our company), i.e. one as a deposit for the seller, as a reservation and deposit fee - on average in the amount of 2,000 EUR (this fee is deducted from the sale price of the property when transferring ownership) and the second, as our remuneration in advance, and after receiving the payment confirmation, we then inform the seller and send him the confirmation of the transfer as payment of the deposit amount, in order to verify the earlier, during a telephone conversation with the seller of the reservation on a "word", and after the payments are credited to our Bulgarian, company bank account, we immediately pay the deposit for the seller to a dedicated, notarized deposit account, which we set up on the booking and the seller in a Bulgarian bank and sign n a reservation and deposit agreement at our expense, with a validity period of 6 weeks, and which agreement is the equivalent of a Polish preliminary agreement, as it is a notarized reservation and deposit agreement.

Finally, immediately after posting the above-mentioned payments, we change the status of the offer on our website to RESERVED, and for the amount of payment of our remuneration we issue a VAT invoice and the original invoice together with the original contract in two identical copies, signed and stamped unilaterally by authorized persons on behalf of our company we send to the customer by traditional mail - by registered priority mail, to the correspondence address indicated in the contract, in the company folder with a return envelope, with a request to send one copy of the contract in the original with initials on each page and the client`s signature in the appropriate place to our company in the attached and addressed return envelope.

COSTS

Purchase costs:

To any real estate purchase, in this case an apartment in Bulgaria, except offer price should be added:

1. Notary costs of an ownership transfer agreement, including the costs of preparing a written draft of the content of a notarial deed, notarial fee and tax on civil law transactions, the so-called PCC (the same as in Poland), where the whole thing is payable to the notary public, and in particular the notary fee is a cost of several hundred euros, and the tax on civil law transactions in Bulgaria ranges from 3% to 5% of the transaction value (depending on the municipal office in which the given property is located) and thus:
   • The cost of preparing a written draft of the content of a notarial deed is the cost, the amount of which depends on the price list of a given notary office and constitutes an additional fee, separate from the notary`s fee.
   • The notary fee is a notary`s remuneration, so just like in Poland, also in Bulgaria, it depends largely on the notary and the price list of a given notary office, but it should be emphasized that, unlike in Poland, notaries have local jurisdiction in Bulgaria, and what for Therefore, it is not possible to finalize real estate purchase transactions, e.g. in Varna, with a notary, e.g. in Sofia, and you can only choose from among notaries only within one municipality in which a given property is located, and thus prices may differ in the case of notaries in different municipalities, but usually the notary fee is in the order of EUR 300-500 on average. 
   • The tax on civil law transactions (the so-called PCC), in the amount of 3% to 5% depending on the municipal office, is calculated by a notary public on the basis of one of two values, i.e. or based on the value from the content of the valuation for tax purposes, which the seller is obliged to collect the valuation at his own expense from the commune office and deliver it to the notary public at the latest one day before the transaction, or on the basis of the value of the property contained in the notarial deed.
   • IMPORTANT: The notary always calculates the tax on civil law transactions (the so-called PCC) from the higher value, which means that if the value from the content of the valuation for tax purposes is lower than the sales price entered in the notarial deed, then the notary public will calculate the PCC the higher value from the content of the notarial deed, and if the value from the valuation is higher, the notary public will calculate the PCC tax on the value from this valuation.
2. The cost of a return flight and a stay in a hotel of your choice, where the cost of the flight is between PLN 300 and PLN 400 in the summer season (May to October), both ways, i.e. Poland - Bulgaria - Poland per person, and the cost of stay in good hotel class with a view of the sea in the winter months and before the season is from 50 PLN / day per person (this cost is optional - as we also handle transactions comprehensively without the need to fly).
   We also mention that most of the answers to potential questions are presented on our website, and here is the link to the guide: >>Real Estate in Bulgaria – why is it worth.

Permanent costs:

In the territory of the Republic of Bulgaria, all apartments-apartments are rent-free, while each apartment owner (assuming that it is an apartment in a closed apartment complex with many amenities), is obliged to sign a contract for the management of the entire complex (equivalent to Polish rent) with the manager, i.e. . a management company, and the price of the year-round management and maintenance of the property, the so-called the annual maintenance of cammon areas fee for the property manager ranges from EUR 4 to EUR 17 per square meter of the total area of ​​a given apartment per year.

IMPORTANT: The statutory standards for calculating the total and usable area in Bulgaria are slightly different than in Poland and, for example, the usable area includes the area of ​​balconies and / or terraces, while the total area includes the share of the land, expressed as percentages, converted to square meters and recorded in the body of the notarial deed as ideal common parts.

Components of permanent costs:

To take full illustrate, the above costs we are giving an example of studio apartment with total area 27,73 m2. We assume that the cost of year-round maintaining for this apartment will be 10 EUR/m2 per year (according to the management agreement) which provide 27,73 m2 x 10 EUR what is 277,30 EUR per year. This fee forms a cost of managing complex and includes the maintenance of common areas in that:

• front desk,
• clock protection,
• swimming pools cleaning,
• mowing lawns,
• free protected parking for apartments owners,
• lifts conservation,
• renovation fund,
• saunas keeping,
• gym, fitness and much more, etc.
• property tax,
• proportional flat fee for media (electricity and water).

Additional costs:

Additional fees are set on the basis of counter values and includes electricity and water consumption. Sometimes the fee for the property management includes also a flat charge for electricity and water accounted in annual fee or overpayment after the end of the calendar year. It should be emphasized, however, that electricity prices in Bulgaria are almost two-thirds lower than in Poland and there are no additional subscription, fixed or variable transmission fees, which means that everyone pays only for the energy consumed, unless of course with this energy uses, and if someone lives permanently in another country and there are periods when they do not use, then they receive only information about the lack of arrears by email and electronic statement for 0.00 leva.

Rental options:

In addition, due to the fact that each manager (a management company for which, in each complex, each owner of a given apartment always pays the maintenance of cammon areas fee) usually has signed contracts with tour operators or is a tour operator and employs appropriate staff (receptionists, laundresses, cleaners, gardeners, restorers, etc.), you can also sign a management contract with the manager for a medium remuneration of the manager in the amount of about 25% of the profit generated from renting and then such a manager also deals with the comprehensive care of the apartment, i.e. cleaning, washing and change of bedding and towels, as well as investigating the condition of the apartment, each time before and after the rental. Alternatively, the owner of the apartment can order by phone or e-mail each time the cleaning service and replacement of bed linen and towels for the complex manager, and once this service costs about 65 Leva cleaning and 15 Leva laundry and change of bedding and towels, but usually pay in advance by bank transfer to the account of the manager (management company).

We would also like to point out that when signing a contract with a manager for management with rental services, it is necessary to declare the period in which a given flat should stay at the disposal of the owner every year, and during the remaining period it can be rented, it should be borne in mind that the season in Bulgaria, it runs from May to October and the payment of rent for a given flat, after deducting costs and a written settlement by a given manager always follows the end of the season, i.e. in the fourth quarter of each year.

IMPORTANT: Of course, there are also external companies that deal with rentals, but we are far from recommending them, because everyone can find them on their own using any search engine.

Template / draft contract for management with rental service:

Companies managing each contract with a given client (the owner of an apartment in a given complex) treat as a business secret and do not provide any detailed information beforehand (neither to the broker nor interested clients) and do not provide the contract templates in advance, because they only show them to the owners when signing management with rental service and during possible negotiations, so receiving a template / draft contract for management with rental service is possible only when you already own, not earlier.

Potential gains:

Although we do not provide rental services, we know from our clients who have purchased and rented their property in Bulgaria that for renting a one-room studio apartment from the season from May to October (after deducting 25% of the rental service costs and 10% of the annual flat income tax and other costs, including electricity and water) you can earn an average of about EUR 2,500, a two-room apartment on average EUR 3,500 and a three-room apartment on average EUR 4,500 (but you can earn more and less, because it all depends on the complex, distance from the sea , standard, view from windows and balconies, etc., especially since, for example, in the same complex by the beach, an apartment with a view of the pool and the sea will earn much more than the one with a view of the parking lot and the road, hence these are average amounts).

Costs of complex ILS POLAND GROUP service:

ILS POLAND GROUP provides comprehensive service and conducting every transaction (from own offers bank or from sources indicated by the customer). During the purchase of apartments on the primary market the broker salary is covered by developer so the buyer is exempt from paying commission!
It is worth to mention that in some cases, when the apartments are more expensive some developers are also covering travel and accommodation costs.

*Any commission for brokering activities including comprehensive service and carry out of transaction can be determined only when you buy the smallest and cheapest apartments in the promotional ILS Poland Group terms, only when the seller is an individual or developer who does not pay remuneration. ILS Poland Group salary is set individually basing on the property price. The client is informed about this before taking decision.

IMPORTANT: The remuneration collected by our company for a comprehensive transaction in the case of real estate from the secondary market is the remuneration for the performance of activities, which is a huge amount, and the determined amount of actual salary is calculated at the lowest level and requires us to incur many operating costs, including among others:

1. Client transfer from the airport and to the airport before and after the transaction (free of charge only on working days from 9:00 a.m. to 5:00 p.m. local time, and on other days or at other times as requested, we order a paid transport),
2. Downloading a valid certificate or submitting an application to the Bulgarian Central Statistical Office for issuing a BULSTAT number for the buyer (equivalent to the Polish NIP - tax identification number),
3. Opening a bank account in a Bulgarian bank, the same one in which the seller has an account, but opening a bank account requires at least two visits to the bank (i.e. the first one is related to the submission of a written application and payment of a one-time application fee in the amount of EUR 100 and a second visit, no earlier than the next day (although banks process applications within 14 days), related to the receipt of a decision to open a bank account or to refuse to open it (IMPORTANT: Every foreigner buying a property in Bulgaria is required to have an account in a Bulgarian bank, even before signing a notarized property transfer agreement),
4. Preparation of all necessary documents and statements from the buyer to a notary public, including booking the advance payment for the seller to a notary deposit account (established on the buyer and seller) and signing a notaryial reservation and deposit agreement with a deadline of 6 weeks,
5. Conducting a transaction at a notary`s office, whether jointly with a client or on the basis of a previously issued power of attorney,
6. Receipt of a copy of a notarial deed from a notary public on the next day or often even two days after the transaction (depends on the pace of registration in the Bulgarian, judicial Mortgage Register - equivalent to Polish, judicial Land Registry by a notary),
7. After the transaction, within 7 days, each new owner of the property, under the pain of high fines, is obliged to register many times, therefore our company also performs remuneration as part of the remuneration:

• Submission and registration at the Commune Office for the purposes of the annual property tax,
• Mandatory notification of a new owner in the Bulgarian, judicial Mortgage Register - the equivalent of Polish, judicial Land Registry,
• Reporting and signing a management contract with the property manager (whether jointly with the client or on the basis of a previously issued power of attorney),
• Submission and signing of a contract with a relevant company - a water supplier,
• Submission and signing of a contract with the relevant company - electricity supplier,
• If the client after the transfer of ownership can not stay on the spot, then our company, based on the relevant notarial power of attorney, performs all the above-described activities and sends the documents to the client by courier to the indicated correspondence address,

ATENTION: ILS POLAND GROUP also provides comprehensive after-sales service, including assistance during furnishing and equipping apartments based on individual arrangements or separate agreements.

IMPORTANT: Both in Poland and Bulgaria, the branch of our company operates only from Monday to Friday from 9:00 a.m. to 5:00 p.m. local time, because on Saturdays, Sundays and public holidays, the managers of the complexes do not provide the keys to the apartments, and bank offices and notary offices are closed, therefore, when planning your visit to Bulgaria, please bear this in mind.

ATENTION: If the customer is already determined and would like to reserve a given property, first of all please contact the person responsible for the offer directly by phone, because we need to check whether the offer is still valid at the moment, and only when we receive confirmation from the seller about the news of the offer and we will inform the seller about the customer`s willingness to book, then we call back the customer (if of course he is not there and wants to book remotely on-line, without having to fly to Bulgaria) and fill in the booking form (by e-mail ) from the preview of a given offer. After receiving a properly completed reservation form from the client, we send the client an intermediation agreement with the client`s data entered in it, with the data of the selected property entered into the agreement, we indicate in the agreement all activities to be performed for remuneration as part of brokerage in the purchase and indicate our company account currency in a Bulgarian bank, to which two payments must be made, i.e. one as a deposit and the other as our remuneration in advance, as it requires us to pay for the operation. The contract signed by persons authorized to sign, stamped and scanned, is sent by e-mail to the e-mail address indicated in the completed form and we are waiting for the return of the contract scan, also with the customer`s signatures, together with confirmations of both above-mentioned transfers. Then, when the transfers have already been made, the representative of our branch in Bulgaria, one of our Polish residents, goes to the locally competent notary at the appointed time, goes to the bank with the notary, and a deposit account is created there for the seller and buyer / booking to a deposit account, our company pays the deposit amount, then we return together to the notary`s office and sign, at our expense, as part of our remuneration, a reservation and deposit agreement valid for 6 weeks, and sometimes as an exception, at the express request of the reservation holder and with the obvious consent of the seller, up to 8 weeks . The reservation and deposit agreement is the equivalent of the Polish preliminary agreement.

Additional and useful links:

1. Embassy: >>https://www.gov.uk/world/organisations/british-embassy-sofia 
2. Wikipedia: >>https://en.wikipedia.org/wiki/Bulgaria
3. Search for real estates in Bulgaria for sale: >>https://en.ilspoland.com/real-estates/bulgaria
4. Search for apartments in Bulgaria for sale: >>https://en.ilspoland.com/real-estates/bulgaria/apartments/sale

Purchase of houses and plots in Bulgaria

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PROCEDURES

Buying procedure:

Conditions of sale and purchase plots and houses in Bulgaria are the same as in Poland and whole European Union. Purchase is made by notarial act which is prepared and signed in the country in which the property is buying. Transactions in Bulgaria are performed only in Euro.

The process of buying houses and plots looks similar to buying an apartment:

1. First variant is to buy house with a plot or the same plot during the investment trip – a visit to Bulgaria,
2. Second option is to buy property without necessity of visiting to Bulgaria. We always encourage to use the first variant, because it  provides a personal knowledge of terrain, surrounding area and immediate neighborhood, what is very helpful in making this type of decisions.

We emphasize that the ILS POLAND GROUP is a licensed broker (who has liability insurance) and co-founder of the Polish Chamber of Real Estate – PIN. We care about the best buyer interest in every purchase option.

There are three possibilities of signing the contract which has to carry about client interests: in Poland, in Bulgaria or by correspondence.

1. Signing a contract or
2. Organization the investment trip, including both ways flight and hotel reservation
3. Pick up from the airport and transfer to the hotel and then signing the agency agreement
4. Presentation of alternative properties according to customer specifies criteria
5. We negotiate the offer price with the seller on client request,but only before booking and signing the reservation and deposit agreement,
6. After making decision about buying property - paying the fee reservation. This payment should not be less than 1.500 EUR to the notary deposit account as a pledge for the seller. The pledge will be counted to the purchase price during signing the final agreement
7. From 1st January 2012 all EU citizens can buy one a built-up residential house or building plot as individual person.  In case of buying two or more such properties it is necessary to register the simplest form of legal entity – Limited liability company in the National Court Register in Bulgaria on an idividual client.
8. Receive a legal entity registration documents in case of buying two or more land and houses
9. Organization and signing the final agreement with a notary in Bulgaria with a sworn translator. Usually until that moment the seller is expected the full price, though it is possible to pay during notarial act or after it in date agreed with seller (in cash or by bank transfer).

IMPORTANT: Registered company does not doing business, it occurs only as the owner of the land and therefore once a year should be accounted  so called PIT-0 in the relevant local tax office – on client request by ILS POLAND GROUP.

Otherwise, the clearly specified sites` will in the contract guarantee the security of transaction. Content of the agreement defines the brokers responsibilities and steps for its realization.

To meet your expectations, in order to resolve any doubts and to answer the most frequently asked questions we would like to stress that available houses with plots from the secondary market comes directly from the owner-sellers and we are always checking it against formal aspect.

Cost of purchasing:

To any plot purchase in Bulgaria, except offer price should be added:

1. Notarial transfer agreement costs i.e. The notary fee and the tax on civil law transactions  is paid for the notary`s. Notary fee is a cost ranges from tens to hundreds Euro – negotiable. The tax on civil law in Bulgaria is 5% of the transaction. The height of its depends on valuation for tax purposes so called "bułgarska ocenka" which is drawn up by the appropriate local tax authorities, directly before the transaction.
2. In case of buying two or more built or unbuilt plots due to bulgarian legislation, onepaid cost for registration the simplest form of "legal person" that is Limited liability company in the National Court Register in Bulgaria on an idividual client which is 500 EUR (this regulation applies to 2012 because of standarization of whole EU regulations, the registration precess is carried by ILS POLAND GROUP on behalf of the customer and it takes only 48h)
3. Costs of flight in both directions and stay in any hotel. The flight costs varies between 300 and 400zł in the off-season in both direction that is Poland-Bulgaria-Poland per one person. Costs of staying in a good class hotel with a sea view in the winter months and before the season is about 50zl/day per person (it is a optional cost because we are also supporting complex transactions without flight)

Most  answers for the potential questions are presented on our website, here is a link to the guide – Real Estate in Bulgaria – why is it worth.

Permanent costs:

Property tax – on the territory of the Republic of Bulgaria height of the property tax depends on the community in which the property is located, it varies at 25-100 EUR per year.
Moreover, once a year, after completion of the calendar year ILS accountancy on behalf of the companies owners is made to the bulgarian competent local tax office the annual tax return, so called PIT-0. It indicates that the company is not active and only remains the owner of the built or unbuilt land. Costs of preparation and submission of annual tax return varies between 60 and 90 EUR
Additional fees:
Additional fees are based on the counter values, it includes normally consumption of electricity, water and waste disposal.

Costs of complex ILS Poland Group service:

*ILS Poland Group provides comprehensive service and conducting every transaction (from own offers bank or from sources indicated by the customer). The brokerage activities commissions including a comrehensive service and carrying out a transaction is determined individually in Bulgaria, of course assuming that the buyers intention is to purchase only house or land.

ATENTION: ILS POLAND GROUP provides comprehensive after-sale service including assinstance the immense renovations of houses and during furnishing and equipping it, basing on individual agreements or separate contracts.

Additional and useful links:

1. Embassy: >>https://www.gov.uk/world/organisations/british-embassy-sofia 
2. Wikipedia: >>https://en.wikipedia.org/wiki/Bulgaria
3. Search for real estates in Bulgaria for sale: >>https://en.ilspoland.com/real-estates/bulgaria
4. Search for houses in Bulgaria for sale: >>https://en.ilspoland.com/real-estates/bulgaria/houses/sale