A variety of taxes and fees are payable when you buy a property in Bulgaria, most of which vary according to the price but which may also depend on whether the property has land attached, whether you’re buying through an agent (as opposed to buying direct from the vendor), whether you’ve employed a lawyer and surveyor and whether you employ a translator.
Most property fees are based on the ‘declared’ purchase price, which may be less than the actual purchase price or its ‘market’ value.
WARNING
You should never be tempted to under-declare the purchase price in order to pay lower fees, as it can have serious consequences if discovered.
The fees associated with buying a property in Bulgaria are listed below, although not all will apply to all sales. Fees are usually payable on the completion of a sale if not before. Before signing a preliminary contract, check exactly what fees are payable and how much they are, and have these confirmed in writing.
Company Registration Fee
If the property you’re interested in has land attached to it (i.e. is anything other than an apartment), you will need to form a limited company. Under Bulgarian law, you must either be Bulgarian or buy through a Bulgarian limited company to own land. It’s a relatively simple process but you must pay a deposit of between 3,500 lev (€1,800) and 5,000 lev (€2,500) into the company bank account.
This isn’t the cost of setting up the company, and once the company has been formed you will have access to this money, but you must pay fees and charges relating to the formation and registration of your company amounting to around €500 to €750.
Municipal Tax
Similar to stamp duty in the UK, a municipal tax of 2 per cent of the purchase price of the property is paid to the local council.
Property Tax
Property tax covers the cost of registering the title deeds with the municipality and is equal to 0.15 per cent of the purchase price.
Notary Public’s Fees
A notary public charges for preparing the preliminary contract and notary deed and for any checks he makes on a property. The fees are set by the government and depend on the purchase price of a property, as follows:
| Purchase price (in Iev) | Notary fee (in Iev) |
| up to 100 | 15 |
| 100 to 1,000 | 15 + 1.5% of the amount over 100 |
| 1,000 to 10,000 | 28.5 + 1% of the amount over 1,000 |
| 10,000 to 50,000 | 118.5 + 0.5% of the amount over 10,000 |
| 50,000 to 100,000 | 318.5 + 0.2% of the amount over 50,000 |
| over 100,000 | 418 + 0.1% of the amount over 100,000 |
The maximum fee is 3,000 lev (€1,500). The notary’s fees for preparing the preliminary contract should be included in your estate agent’s fee (but make sure you check this beforehand).
Selling Agent’s Fees
Selling agent’s fees are usually around 3 per cent of the purchase price, but they can be as high as 10 per cent depending on the type and level of service provided.
Other Fees
Other fees may include:
- lawyer’s fees (see our article on Conveyancing)
- translator’s fees (normally around 30 lev/€15 per day)
- surveyor’s fee
- utility connection and registration fees
Value Added Tax
Sale of property for residential purposes and residential property rental are exempt from value added tax (VAT). Commercial property transactions are subject to VAT at 20 per cent, although VAT-registered entities are entitled to a refund.
Running Costs
As well as the fees associated with buying a property, you must take into account running costs. These include building and contents insurance, standing charges for utilities, maintenance (e.g. garden and pool, plus communal areas if you buy an apartment or a property in a development with shared facilities), plus a caretaker’s or management fees if you leave a home empty or let it. Annual running costs usually average around 2 to 3 per cent of the cost of a property.
This article is an extract from Buying a Home in Bulgaria from Survival Books.