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As with many other countries, a foreign owned national cannot own land in Bulgaria, this presents a problem when one wants to buy a house in Bulgaria, which entered the European Union in January 2007.
Buildings and other similar assets can be owned in Bulgaria by foreign nationals, this means that if you were to buy and apartment and either the developer or owners association takes ownership of the land below your property, then you can legally own your apartment because it does not sit on the land.
Many people are buying property with land in Bulgaria, so how do they do it?
A foreign national can own a company in Bulgaria, a company is an entity in itself, and the good thing about a company is because it is an entity then it can be the "owner" or the "holder" of property. Because the foreigner (You) can own a company, you can put the property into your company (Lets call it a holding company, because its not a commercial trading one, rather it holds your property for you) and you will own the company, in essence because you own the company that holds the land (Yes, and the property that comes with it) then you are the ultimate owner of both the company and land.
How much does it cost to set up a company?
- It costs approx £500 for the actual company formation (Check with the agent, the formation company or individual who is setting it up from you, in most cases the agent who is selling you the property will set the company up for you)
- Agents fee, this varies, we do not charge for this as it is absorbed in the property price, check with the agent before signing anything
What is involved in buying the Bulgarian property?
- The articles of trading are drawn up to a standard pattern to allow you to operate within the current laws with as broad a spectrum as possible. This allows you to use the company to renovate and improve your property as you wish and also to buy other real estate through the same vehicle (Your company)
- You can denote power of attorney, with powers
- You will visit the notary and bank whilst in Bulgaria.
- It generally takes a maximum of 3 hours to complete the process of buying, although this may take longer given distances etc.
- Your agent should help you set the whole company up, once the company has been formed (You will probably be home by that time unless you spend about 30 days in Bulgaria) then the property will be placed by your agent into your company.
- You will have to make sure your agent has the null returns submitted yearly for your company
Another thing to think about is Power Of Attorney. Power of attorney (Or POA as we generally call it in the Bulgarian property business) is set up to allow certain rights to a trusted person (More often than not your agent) to undertake duties concerning your house on your behalf. Reasons for setting a POA is that you may be in the UK most of the time. Keep in mind that the duties that you specify (You can specify certain duties like buying property on your behalf etc) are generally the only duties that your POA will be allowed to undertake. Just as it is a bad thing to give too much rights (Your POA may flog off your house if he isnt really trustworthy!!!) you should probably give rights that you know you cant do yourself unless you plan on travelling to Bulgaria often. Your POA should be contactable easily in case of emergency.
- Be aware, a common misconception is that property does not come with land in Bulgaria, this is wrong, it is only that a foreigner cannot own land in Bulgaria, nothing to do with the association of the house you buy and the land it sits on. If someone sells you a house in Bulgaria, unless the seller (Or the deeds) tells you otherwise, then you are buying a house with the land described.
I hope you have found this guide useful.
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