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Buyers guide

We pride ourselves in our ability to make investing in properties simple and straightforward. Our expert staff will take care of absolutely everything you need to make your selection and to help you with your buying decision, guiding you through every step of the process. We also feel it is useful and necessary that you have as much information as possible. In this section you will find a wealth of detail so you know exactly what is involved at every stage of the process.


Choosing your property


Check out the Properties section of our web site to see the complete selection of developments we are currently offering. You will find a variety of options, yet not as extensive as some other companies in the market. The reason for that is our focus on offering quality rather than quantity - at BG Estates Worldwide we are very selective and we do not hesitate to discriminate projects, which carry even the slightest probability to not provide value to our clients. We take great care to create investment opportunities that are secure and profitable, and we dedicate more time to build and maintain good relationships with our customers, suppliers and partners. The people on our staff are not sales representatives but rather professional advisors who are there to help you.

 

Purchase Option agreement


Once you have found what you are looking for, you can either send an e-mail request to sales@bgestates.com or you can call one of our offices to confirm availability and ask for more information. You will receive a pack with more detailed information and you will meet one of our Area Managers for a further discussion. The next step is the filing of a Purchase Option Agreement Form. Once we receive the completed form, together with a deposit of 3000 €, which will be deducted from the final price on completion of purchase, we will contact with you to arrange a Free Viewing Trip. The property of your choice will be immediately taken off our sales list for the next 15 days. We realize that many of your questions cannot be fully and completely answered in the course of a conversation around a table in an office and that it is best that you personally see the location, the development and the property you intend to buy. It is extremely important that you get the option to feel the atmosphere, experience the lifestyle and, last but not least, to build a close relationship with the team of local professionals who will be looking after your interests. That is why we arrange the Free Viewing Trip. We think that the trip serves an informative and reassuring function, while also being an enjoyable experience. You will be our guest and we will take care of everything to make the trip a pleasant and unforgettable experience. Here is how a typical trip is scheduled:
  • A member of our staff will contact you to arrange the details of your trip, which normally lasts for 4 days and 3 nights.
  • We will personally meet you at the airport and will take you to your 3, 4 or 5 star hotel.
  • You will then attend a short seminar that gives you an informative overview of the international property market and what are the present and future benefits from investing in real estate in the country of interest
  • One of our team members will show you around the area in which is the property you have selected. Our associate will drive you in an air-conditioned car and you will be able see all main features of interest – beaches, golf courses, ski slopes, marinas, shops, beauty spots etc.
  • During your time with us you will visit a range of different restaurants, varying from sophisticated to casual, so you can gain a full appreciation of local cuisine.
  • In the evening you can either entertain yourselves or join our guides to sample the local nightlife.
  • Throughout your stay our team will do their most to give you the best possible insight into every aspect of the country, the people, the lifestyle and the investment environment.


 

Preliminary Contract


The next stage is similar to buying property in your own country. You and the developer will sign and exchange a preliminary contract. The contract clearly sets out the price, the payment arrangements, the timelines, the building guarantees and any penalties for late completion - it creates an obligation for the developer to build the property and an obligation for you to buy it and it also sets out all details. Once you return back home, you will typically have 14 days to transfer your initial payment, which is generally 30% of the purchase price, directly into the bank account of the developer. Construction updates are provided regularly to show the building progress of the development.


Final stage and Deeds Transfer


During the course of construction you will pay one or more installments, followed by a final payment. Once the property is built the deeds are transferred to you. A Notary witnesses the transfer. A Notary is a senior solicitor licensed by the Government.

According to local law the transfer is completed in the Notary Office in the district where the property is located and is approved by the court
 The new deeds can be transferred to the client either in person or through a Power of Attorney on the client’s behalf
 The new deeds are issued within ten days after signing in the Notary Office
 Approximately 3% of the tax appraisal value of the property are paid in transferring and state taxes.


 

Taxes and fees


According to the Law for local taxes and fees, the real assets and the unlimited property rights that are received by buying are taxed. The person who acquires the assets pays the tax. In case that it is agreed that both sides split the tax obligation, they are jointly responsible. When it is agreed that the tax is to be paid by the transferor, the other side is a guarantee
 The local tax for acquiring a property is 2% of the value of the real estate. It is defined as the higher value between the tax evaluation and the agreed price, declared in the notary act
. The buyer also has to pay a notary fee for acquiring property on the real estate according to the Law of notaries and the notary functions. The exact amount of the notary fee is defined by the Tariff of notary fees (art.8) as follows:

Certified material interest in leva (BGN)

Notary fee in leva (BGN)

Up to 100

15

From 100, 001 to 1000

15+1,5% for the amount above 100

From 1000,001 to 10 000

28.50 + 1% for the amount above 1000

From 10 000,001 to 50 000

118.50 + 0,5% for the amount above 10 000

From 50 000, 001 to 100 000

418,50+ 0.1 % for the amount above 100 000 but not more than 3000

Tax rates vary by region.

*currency exchange rate: 1€ = 1.95583 BGN

The VAT is 20% of the price, after taking out the paid taxes and fees. There is no VAT for:

  • Buying of buildings or parts of buildings, that are not newly built, including the belonging land and the establishment and the transfer of other real rights on them (except if the supplier chooses the supply to be taxed)
  • Buying of agricultural and forest land ( when their purpose is not changed in “construction land”)
Necessary documents for the notarial procedure:
  1. Project of a notary act
  2. Documents, certifying the identity of the participants in the deal
  3. Letter of attorney, certified by a notary in case that one of the sides is represented by a proxy.
  4. Documents that certify the property right
  5. Declarations certifying the citizenship, the marital and property status of the sides.
  6. Declarations that the person does not owe local taxes and fees.
  7. Declaration of the translator for the fidelity of the translation, made by him
  8. Certificate for tax evaluation and paid taxes.
  9. Receipt for paid local tax if the person is a Bulgarian citizen.

There is an obligation for registration in the BULSTAT registrar.

Foreign nationals and foreign companies acquiring real estate in the country and not registered yet in BULSTAT registrar on other grounds, are obliged to be inscribed in the registrar in order to be issued a Unified Identification Code. The declaration for registration is applied in a 7-day period from acquiring the estate in the Registration Department according to the location of the estate. These taxes and fees are only for the territory of the Republic of Bulgaria.Please note that the Tax Evaluation is not conducted by BG Estates Worldwide or the development company. It is set by the local council and BG Estates Worldwide has no liability for the evaluation size and methodology.

We’re with you all the way

Our team of experts and specialists are always available to answer all your questions along the process. Upon completion we will still maintain, manage and look after the property for you. Our happy customers are our best advertisement and a lot of our business is a result of referrals and we provide outstanding service, even after the sale is completed. In the future, if you eventually want to resell your property we are there to help – we’ll help you find a buyer and handle the transaction on your behalf.



Legal services provided by:

Cvetkov & Partners Solicitors

We work with respected law firms all over Bulgaria who will be happy to provide professional advice for any of your legal needs and complete assistance and support with the purchase of your new property. Buying property in any country can sometimes be complicated and often the assistance of a solicitor is helpful. Solicitors’ fees in different countries will generally range from 500 – 950 Euros depending on the value of the property.

 

The benefits of buying “Off Plan”

Experienced property investors are familiar with the process of buying “Off Plan”. This involves agreeing upon the purchase of a property before it has been built and generally is a transaction you conduct directly with the developer. There are many reasons why this happens.
  • By dealing directly with the developer you avoid paying any middlemen, thus lowering your costs
  • By making your investment at an earlier stage you end up realizing a greater capital gain.
  • You have more influence over the design and specification of your property – it is tailored to your needs.
  • You get a brand new property and avoid any refurbishment or conversion costs.
  • Dealing directly with the developer makes the process simpler – you are talking to the people in the know who can make things happen! 


Why is buying “Off Plan” more lucrative?

Experienced property investors are familiar with the process of buying “Off Plan”. This involves agreeing upon the purchase of a property before it has been built and generally is a transaction you conduct directly with the developer. There are many reasons why this happens.When an area is undeveloped it is hard for most buyers to see the real investment potential it has.
Developers therefore have to price properties relatively lower at the initial stages, but can charge a lot more as the development takes shape. That is why “Off Plan” prices are often 30% - 50% lower than prices for completed properties - so you can make a decent profit in a short time interval just by joining the game earlier.


Post-purchase expenses


Household waste fee

The owner is charged an annual fee for waste removal by the local council. The fee is based on the amount of waste collected from the property for the preceding year. If the quantity cannot be calculated a standard fee is charged.

Real Estate Property Tax
The owner must register their property with the local council within two months of acquisition date. The owner will then have to pay Real Estate Property Tax, based on the Tax Evaluation. The tax rate is 1.5 per 1000 of the total value.

 

Capital Gains

Rental income
Taxable income of a company investing in Bulgarian property is defined as the gross income derived from letting the property, less deductible property related expenses and depreciation. These expenses include repairs, maintenance, renovation and other costs as well as interest on loans used for the acquisition of the property. The council will charge between 10% -20% of any profit made. This is then deducted from the taxable profits when it comes to paying corporate tax of 15%.

Depreciation
Land is not depreciable, but the property built on that land is, provided it is used for the business activities of the company and is listed as a fixed asset. Depreciation for tax purposes is calculated at an annual rate of 4% using the straight-line depreciation method. Property acquired for resale purposes is considered an investment property and is not deemed depreciable. Its market value is subject to reassessment every year.
 
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