Buyers Guide - The Buying Process in Bulgaria.

Because Bulgaria is currently so popular with property investors the property buying process in Bulgaria is becoming simpler. In order to purchase anything other than an apartment in Bulgaria, a foreign investor must first establish a limited company. It is not possible for a foreign investor to buy land in Bulgaria and although this rule is set to change when Bulgaria joins the EU, in reality this situation is unlikely to change before 2010.

The first step in the property buying process in Bulgaria is actually finding the right investment applicable to the specific investor's requirements.  Once a property has been found and a price agreed with the vendor, a deposit is usually required to secure the property and take it off the market.

At this point a preliminary contract is usually signed by the investor and the vendor.  The holding deposit is non-refundable if the property buyer pulls out of the sale. If however, the vendor withdraws from the sale or problems are found with the property or its title then the deposit is of course refundable.  The preliminary contract states the terms of the sale and once it is signed, all the legal searches and checks can be carried out by the property investor's solicitor.

As with any property purchase, it is imperative that a property investor in Bulgaria a ppoints an independent legal representative to assist with every aspect of the purchase process.  In terms of the searches carried out on the property, checks are conducted on the legality of the title deed, building licenses and permissions associated with the property and vendor and whether there are any outstanding mortgages and debts against the property.

If the property is anything other than an apartment, it will be at this stage that a limited company will be need to be established.  There are many companies and lawyers who will be able to seamlessly sort this out on the investor's behalf. Typically, the cost of setting up a limited company will be in the region of £350-£500. At the time of writing this article the minimum foundation capital for the establishment of a simple limited liability company is EUR 2,600 (5,000 levs).  This money has to be deposited in a local bank account but can be withdrawn once the company has been established. 

As soon as the limited company is in place and all the searches and surveys have been satisfactorily conducted, the next step is to sign the ‘Contract of Purchase' or ‘Notary Act'.  This is only signed once a property is completed, therefore those buying off plan property in Bulgaria will have to wait until their house or apartment is completed before making an appointment with a local notary public for the signing of this final contract.

As soon as the Notary Act is signed, the title deeds for the property are transferred into the property investor's company name and the remainder of the property price falls due.