Bulgaria the easy Way
Webmaster - Alan Tait
If you click on the picture of the house you can see how the house was renovated. There are step by step photos of some of the renovations together with some of the original costings.
How to buy These are the steps for buying a property: Reserve a property by paying a deposit normally 10% of the purchase price. Determine whether the sale is with land. Most houses are sold with land. Be wary of any house that is offerred for sale without land, I know of several cases where a house has been offerred for sale after the house had been built on public land. If the sale is with land a company needs to be incorporated to hold the land. If sale is without land no company is needed. Forming a Company is a straight forward process. Buying procedure: You receive an initial contract of sale (similar to 'Sold subject to contract' in the UK). If the property your buying is already built, do the standard checks on the property using a reputable Bulgarian solicitor. Sign the Notary Act (Contract of purchase) in front of a Bulgarian Notary in Bulgaria. The Notary will insist on certified translations if you do not speak Bulgarian. Please note that the final Notary Act is not signed until the building is completed in the case of "off plan" developments. Facts to consider. The usual term for the old owners of the property to move out of it after completion of the sale is one month. This could be negotiated if the buyers require a shorter term. People should not expect the property to be empty right after signing of the final contract. All foreign buyers purchasing real estate property must be aware that in Bulgaria there are such terms as "tax estimation price" and "purchase price".The "tax estimation price" or municipality valuation is for the purposes of real estate taxation and is much lower than the actual selling (purchase) price. Most of the Bulgarian property owners (vendors) wish that the "tax estimation price" is written in the title deed, and not the selling (asking) price which the buyers are paying, so due to this practice there might be discrepancies between the price you are paying and the price written in the title deed. However, this practise is illeagal and you risk prosecution. If a lower price than the true selling price is put in the deeds and you later resell the house you will be liable for more tax than if you put the true price in the deeds. But be wary that if you insist on the true selling price of the property you could be asked for more or the owner may decide not to sell to you. Foreign ownership of property in Bulgaria Under the Bulgarian act on Foreign Ownership, some foreigners are not allowed to own land but may own buildings. Foreigners can however own land by setting up a Bulgarian company to hold the property for them. The situation is summarised below: No land ownership for some foreigners in Bulgaria. Buildings can be owned by foreigners. Some Foreigners wishing to own land can only do so by registering a Bulgarian company. Bulgarian company incorporation costs less than £400. It is also necessary to open a Bank account in the Companies name with a minimum deposit of 5,000 leva (around £1,700). You can withdraw this money as soon as the Company is formed. You will also need a Company stamp when you have registered the company. Bulgaria’s ownership policy will be harmonised with the EU in the future. Taxation The relevant taxes that investors purchasing property in Bulgaria will be liable for will vary from person to person, due to a number of factors including your tax domicile, the extent of your business activities in Bulgaria, and the nature of the property transaction. While I am not qualified to provide tax advice there are some good sources of information available on the Internet with respect to Bulgarian Tax law. Also Bulgaria is a signatory to a Treaty for the Prevention of Double Taxation with many countries all over the world including the UK and Ireland. Draft agreements with additional countries are at the discussion stages. A Double Taxation Prevention Treaty, in principle, enables offsetting tax paid in one of 2 countries against the tax payable in the other, in this way preventing double taxation. Another important factor is the grant of an exemption or tax at a reduced rate on certain receipts such as interest, royalties, dividends, capital gains and others that are connected with a transaction carried out between parties associated with the Double Taxation Prevention Treaty. It is of the utmost importance to stress that the Double Taxation Prevention Treaty takes precedence over the Bulgarian Income Tax Ordinance. In other words, if certain income is taxable under the Bulgarian Income Tax Ordinance but there is an exemption (reduced tax) under any Taxation Treaty, the income is taxed, if at all, but only according to the provisions of the Taxation Treaty. Double Taxation Agreements: List of Countries
|
