Real Estate in Sofia and Bulgaria: Your Rights
Our real estate lawyers in Sofia offer comprehensive legal services to both investors and foreigners looking to buy property in Bulgaria. Real estate deals in the country follow established procedures guaranteeing the rights of both parties to the transaction.
This article will present the rights of foreign citizens to buy property in Bulgaria. It will also outline the main procedure for buying and selling real estate, as well as specific aspects of deals with buildings in construction.
If you need additional information, do not hesitate to contact us. Our experienced real estate lawyers will be happy to assist you.
Who can purchase and invest in real estate in Bulgaria?
Bulgarian real estate legislation is quite liberal regarding foreign investments and acquisitions.
According to Bulgarian law, foreign citizens of EU countries or the European Economic Area (EEA) have the right to buy property in the country, including land. This also means that foreigners can invest in property in Bulgaria - either through a local legal entity or personally.
When interested in buying real estate personally, non-EU residents can only buy buildings but not land. Ownership of Bulgarian land is allowed only for Bulgarian citizens and legal persons (even if their owners are foreing citizens).
Therefore, foreigners can:
- purchase apartments directly and other property under limited ownership rights, i.e. the right to use/ build, etc.
- buy property with land, e.g. a house with a garden, a villa, plots, etc. if they set up a Bulgarian company.
In this case the company will be the legal owner of the real estate. Starting a company in Bulgaria is cheap and easy and our legal experts can assist with the procedure. Read more about Company registration in Bulgaria.
Do you need legal advice and assistance? Contact our experienced lawyers.
Why buy or invest in Bulgarian property?
Bulgaria is a top destination for cultural, sea and mountain tourism. Its well-preserved natural diversity, low real estate prices and the affordable cost of living attract more and more foreigners. What is more, Bulgaria is just a couple of hours away from most European capitals and boasts wonderful climate and cultural proximity.
A growing number of foreigners are choosing to relocate to Bulgaria - both EU retirees and business entrepreneurs. Bulgaria is among the top outsourcing destinations in Europe and attracts a lot of business investors.
Get more advice about different types of property you can buy in Bulgaria and the Bulgarian real estate market.
Feel free to contact us for further questions and advice.
Purchase and sale of real estate: the procedure
Buying property starts with research of the real estate market. The right choice depends on the purpose of the buyer. Real estate agencies offer ads with 360 virtual tours, videos, etc.
Whether it is a single family flat in Sofia or an investment in business or residential real estate, a buyer should conduct an on-site inspection before making a decision. What is more, before concluding a contract, foreigners are advised to consult a competent lawyer, well acquainted with the local laws and specific procedures.
In general, the process of buying and selling real estate includes the following steps:
Sign a preliminary contract
Real estate agencies usually require the payment of a deposit to take the property off the market. This means that the buyer pays a percentage of the announced price (usually 10%) in advance.
It is extremely important that this is carefully specified in the preliminary contract. This document also determines the obligations and rights of both parties, so it should be drawn up by a professional.
Read more about the preliminary contract when purchasing property.
Our legal experts can offer advice for all types of real estate deals and draft all necessary documentation. Contact us before making a deal, we will be happy to assist.
Open an escrow account
This step is recommended to protect the buyer financially. The funds are stored in an escrow account and are transferred to the seller only after all contract conditions have been met. Only an independent third party can serve as an escrow agent and a special escrow agreement is made for the specific purpose of the deal.
Read more about how escrow accounts and how they work and protect your rights.
Foreigners who need a trusted local lawyer to draft the escrow agreement and serve as an escrow agent, may contact our legal experts.
Notary Deed (Title Deed)
With this final contract, ownership of the real estate is transferred to the buyer. The Notary deed (Title Deed in the UK) must include specific information about the property. It must also be signed in front of a notary.
The notary then registers the Notarial Deed with the Registry Agency. The signing of the Notary Deed requires that both seller and buyer are present. The other option is to do this through power of attorney and your lawyer in Bulgaria.
Before the purchase procedure is initiated, the property must be thoroughly checked for encumbrances, ownership rights, etc. in a number of registers. If you need assistance, contact our real estate attorneys.
Tips for buying real estate in Bulgaria
Foreigners buying real estate in Bulgaria should be aware that:
- Real estate in Bulgaria is valued by square meters, not rooms, so this is the information that will be displayed in property ads.
- The total square meters in the ad usually include common parts. This is space that is not part of the living area but is still included in the price.
- In some cases, the advertised price may be higher than the property value. Therefore, during the dealing the buyer can sometimes negotiate a 5-10% lower price.
Read more about the procedures and fees when buying property in Bulgaria.
Do you need legal advice and assistance? Contact our experienced lawyers.
Purchase and sale of property in construction
With properties in construction, sellers and buyers should be aware of certain specifics. A home can be bought after Act 14 or Act 15, but people can live in it only after the building receives Act 16.
Act 14: Structural Statement
After Act 14 the building is at the "rough construction" stage but can be transferred, i.e. can be sold, with a Notary Deed. The price is usually lower, but this type of transaction involves a certain risk.
Act 15: Ready for commissioning
With Act 15 the building is handed over by the construction contractor to the client or investor. It is not yet ready to be inhabited but can be transferred with a Notary Deed.
Before buying a property with Act 15, please consult your attorney so they can conduct due diligence.
Act 16: Commissioning Certificate
Act 16 is the basis for the issuance of a Permit of Use (with high-rise buildings) or a Commissioning Certificate.
When buying property in construction/ or newly constructed, it is extremely important that the payment is linked to deadlines and the issuance of Act 16. This is usually done in the preliminary contract. If you need assistance, contact us.
Real estate legal services
‘Danailova, Todorov and Partners’ are consistently ranked among the top in the country for Real Estate and Construction by Legal500. Our real estate lawyers offer a wide range of legal services.
Real estate acquisition
- Legal counselling for real estate deals
- Full legal analysis of the ownership and status of the real estate - inquiries with the Cadastre Agency, Property Register, municipal administrations, etc.
- Drafting of the preliminary and final contract (Notary Deed)
- Drafting of an escrow agreement
- Representation via power of attorney throughout the whole purchase process
Other real estate contracts
- Drafting contracts for transfer of ownership (donation, exchange, voluntary division, etc.)
- Drafting of any other real estate contracts, such as leases, management, etc.
- Legal and financial analysis and advice related to limited rights over real estate (right to build, right of use, etc.)
- Advice on legal and regulatory requirements related to planning and construction
- Drafting of construction contracts, including contracts for infrastructure projects
Real estate investments
- Consulting and structuring a real estate portfolio for investors
- Advice on all aspects of financing and real estate investment, management and following sales
Danailova, Todorov & Partners Law Firm offers complex legal services in the field of real estate. Our law firm provides its clients with comprehensive legal advice and support throughout the whole process of property transfer. Contact us if you are buying property in Bulgaria..