Dos And Don'ts Of Buying In Bulgaria

Dos Always use a reputable English speaking solicitor/lawyer This ensures the buyer will be secure in the knowledge that all of the necessary legal checks ensuring title to the property are carried out, that there are no debts against the property and if it is an off-plan or new property, the developer has obtained all the necessary building permissions. Visit the property/site before purchasing Although some villas, apartments and rural properties can seem extremely cheap by UK standards, it is necessary to bear in mind that the least expensive will almost certainly require work in order to bring them up to a standard that a buyer may be used to. It is therefore advised that you do not buy without having seen the property or site and plans in advance. Make an effort to find out about the area/facilities It is advisable to find out if the property or development you are interested in buying is in an area that is in high demand for or is expected to be by the time developments are completed. If it isn’t in a desirable area with good facilities and a decent road network, then it could potentially be difficult to sell on. Always read the small print of any rental guarantee scheme Rental guarantee schemes have increased over the last few years and being used as an incentive to attract buyers. Although they might look fantastic in principle, the buyer could find it is reflected in the purchase price. The buyer should ensure that the guarantee has some substance. Make price comparisons with other ‘similar’ properties This will help you get good value for money. Check the price against the square metres of usable space It is common practice for balconies, terracing and a share of common parts (including stairwells!) to be included in the price of apartments. Reputable developers/agents separate this out so that it is easy to understand and you can compare the prices with others Find out about the detail and cost of the management of your building if it is in a new development It is in your interest for the building to be well maintained. Many Bulgarian developers do not make adequate arrangements for this. Check the detail of who will be doing it and what it costs. Current annual rates are seven to 10 euro per sq m. If lower than this, it is unlikely to be done well. Check out your tax position income, capital gains and inheritance tax With imminent entry into the EU, rigorous reporting of tax authorities to EU standards will be expected. Look into the legal position of inheritance Bulgarian law on inheritance may be completely different from those in your native country so it is worth investigating your legal stance in advance. Shop around when it comes to transferring money There are now many currency transfer agents who can save you a significant amount, look for one which has a good reputation. Don’ts Expect the legal system to be the same as it is in your country, it is not There is a rigorous system, but expect the process to be different. Expect the locals to speak English Make an effort with a few Bulgarian words since English has only recently been taught as the second language in schools and in many rural areas, no English will be spoken. Sign any documentation unless translated by an accredited translator For obvious reasons, have all documentation translated. As with any country, it is wise to be aware that there are dishonest estate agents/developers out there, so always ensure you know exactly what you are signing and agreeing to. Make any rushed decisions to pay any ‘deposits’ or direct payments Some irreputable agents/developers try to impose ‘fines’ on negotiations if they do not get a deposit from a potential buyer when visiting. Always investigate the competition and at least discuss your decision in advance with a friend before making any payment. Expect your purchase to make immediate and massive gains It is likely that Bulgarian property will go up in price significantly but do not expect it to happen straight away. Use your mobile phone on visits, buy a local SIM card There are now three mobile phone operators, M-Tel, GloBul and Vivatel and one mobile phone rental provider, Intrafonica Bulgaria, also offering mobile internet delivered via GPRS, and SIM cards for hire, so you can avoid inflated roaming rates and paying for being called. Unwillingly participate in tax evasion Buyers purchasing property in Bulgaria should be aware that some unscrupulous vendors insist upon declaring a lower price in the title deeds to reduce their tax liability. Be careful here as a large number of vendors prefer to state the "tax estimation" price rather then the "selling price” since this will reduce their tax liability. Do not participate in this type of tax evasion as penalties are severe. It is therefore essential that you insist that the selling price be stated on the deeds when buying property in Bulgaria, because if you state the tax estimation price and then decide to sell the property, you will be faced with a capital gains tax liability that is larger than it would otherwise be. Forget that owning a property does not give you an automatic right to live in Bulgaria on any kind of permanent or semi-permanent basis This also applies even if you have a Bulgarian spouse. You will need to undertake application process at the local passport office once in Bulgaria to secure a residence permit. Let the first place you see be the last! It is important to ensure that you have seen enough properties/plans to form a well- rounded opinion of what is on the market to get the most out of the money you will be spending. Source: Westhill Investments