Selling your Bulgarian property
Selling your Bulgarian property
Selling your house, land or apartment is a very important action, particularly if it is owned by a domestic registered limited liability company in your name.
Our legal department has prepared this article in order to lead you through this procedure which may look like a labyrinth , but in fact is quite easy and straight forward when you know what exactly you need and which step follows next.
Real property agents may try to conceal the tax complications which may arise from selling a real property at a price higher than the price of initial purchase under the Title Deed. Should the occasion arise, the owner of the property, i.e. the domestic limited liability company owes capital gains tax. The same scenario is valid if the seller of the property is a natural person and sells the property for a higher price within 3 (three) years after purchasing it.
Please take into consideration that the legal aspect of the transaction is the one which will ensure the positive financial outcome of it, by ensuring you are not liable for damages due to making misleading statements in the new Title Deed (drafting a Title Deed is one of the services we offer). Please also note that you will need to do the following before you initiate the sale:
– ensure the property or the company that owns the property is in good standing (cadastre registration, no outstanding payments for taxes, no encumbrances on the property, et al.)
– getting up to speed on the current real property market situation and any possible Capital Gains tax complications after the sale – get information on fair market values of similar properties in the area in order to correctly determine the going price of your property. If you own the real property through a company, selling a property entails some accounting costs as well.
– marketing the property – make sure any real estate brokers or agents are marketing the property at the asking price; ensure also that you will only pay the requisite fees after the actual signing of a Title Deed.
Please note that in case you are selling a property through a company, you should require a VAT invoice for any and all fees payable. Please also ensure the full price for the sale is listed on the Title Deed. Make sure any and all reservation deposits are transferred to your account and not to the real estate agent account, as there is a risk of the real estate agents acting unfairly and keeping the deposit.
We are happy to prepare the relevant documents and act/negotiate on your behalf to protect your legal and financial interests before real property agents and to guarantee you will receive all amounts payable to you and to ensure you get the full benefit from your sale. Consider hiring us to act on your behalf a good move.
How to find the right buyer for your property (and getting a deposit) is easily the hardest part of the process. We can help you by examining your documents and help you in listing your property for sale. After having successfully found a buyer, we will collect information from the buyer about their selected method of funding the transaction (by way of example – a mortgage loan). A crucial element of our job is to ensure a smooth sale process. We will act in good faith on your behalf and ensure that you received the deposit and mediate in paying the legal fees for obtaining the requisite documents.
– Obtaining the requisite documents for the sale of your property in Bulgaria. Please be aware that this is a lengthy process – application for documents are filed to the Land Registering Agency, to the Cadastral Agency, the National Revenue Agency, et al. Please also be aware that your prospective buyer (or their lawyer) may require examining the documents before agreeing to go through with the purchase.
– Please be advised of the Cadastral Plan particulars as regards to properties. Your property needs to be registered with the Cadastre Agency and prior to selling your property, you need to obtain a Cadastral Plan and present it to a Notary Public.
This is particularly important for properties you own in Sunny Beach, Bansko, Pamporovo, Kavarna, Sozopol, et al., since it is there that a Cadastral Plan is existing already. For further details on the Cadastral Plan, please visit our section “Cadastral registration”.
– Effectuating the sale: You have two options at your disposal. You can go for direct signing of the Title Deed for the sale of a property, or you can do a preliminary contract first, against the receipt of a deposit payment. Naturally this is the key point of the sale process and we will be happy to assist you in creating both the preliminary agreement and/or the Title Deed for sale, based on your existing documents.
We will have those translated and approved by you prior to signing. It will also be our responsibility to set an appointment with a local notary public acting in for the area of location of your property. You can also authorize us to appear before the Notary Public on your behalf and save yourself a trip to Bulgaria.
– Post-sale: After you complete the sale and sign the Title Deed, we can provide you with a copy and we can help you deregister it from your file with the Bulgarian Revenue Agency to make sure you are no longer paying local property taxes for that property. We also offer the service of exchanging the public utility company batch registrations.
List of legal documents, needed for the sale of properties in Bulgaria
The main document proving your ownership is the Notary Deed. You should have received it when you first bought the property. If you by any chance have lost it it doesn’t mean you have lost your ownership. Contact your agent for assistance to have a notarized copy issued from the notary who has initially signed the deal.
You need additionally the sketch for the property – the sketch is issued by the local technical department in the Municipality where your property is located. Depending on the Municipality, cost and time to issue the sketch could vary, but generally the process can take up to one month and price is around 30 levs . You can also apply for express order which will cost you at least double. The sketch could be ready in 24 hours. In order to put a request for a sketch you will need a copy of the notary deed. Once a sketch is issued it is valid for 6 months. After that the whole procedure should be done again!
The next documents, which is nessesery for the sale of property in Bulgaria is a valid Tax Evaluation Document, issued by the Local Tax services Office in the Municipality where your property is located.
The request for issuing this paper could be submitted only by the owner of the property or his legal attorney. Again the cost and the period for issuing depend on the Municipality but it start from 15 levs and could be maximum 50 levs for an express service, Please bear in mind that in order to have your Tax Evaluation paper Issued you have to pay all the taxes for the property that you owe . In the worst case if you have not declared your property in the tax services upon purchase you will be penalized according to the period that you were late with and also depending if you own the property as a physical person or as a company. Penalties for company owners are higher. Please mind that the address of the property in this document and in the deeds have to be absolutely identical because it may cause a problem while registering the deal.
If you are selling the property as a phisycal person, you will need to have a document stating your Marital Status. This document you should supply from your own country and get it translated and legalized in Bulgaria. If the property has been bought during your marriage you will need a letter of attorney by your spouse for the deal. So for this it is important what was your marital status by the time when you have purchased the property.
One of the documents, which will be needed is a legal certificate of lack of encumbrances– this document states that there are not established real rights in favor of third persons for the property you are selling . This document is issued by the Registry Service in your Municipality. When submitting a request you have to provide the notary deed for the property. If the property has land you have to supply a sketch as well. This document is valid only 24 hours. Some notaries do not request this paper as they are checking it automatically at the day of the deal.
Legal declaration for citizenship and marital status as per article 25. 7 from the Notary Law act. This document should be filled before the Notary public on the day of the transfering of the ownership over the property.
Legal declaration stating that you don’t owe any taxes to the Republic of Bulgaria. This document should be filled in in two copies at the Notary in the day of the deal. X. In case you as an owner will not be present at the deal , make sure that you have an accurate letter of attorney signed and notarized ( apostilled) by you with which you empower a lawyer or someone you trust to sign on your behalf and on your account !
Property is owned by a company
……you need to provide a company decision for the purchase / sale of property If you own the property as a company you will need a written decision of the share holders in the company that you have decided to sell this property which is an asset of the company. It should be signed by all shareholders and stamped. By law when providing this paper there is no need all the shareholders to be present at the deal as far as the manager is present but many Notaries will require it!
Please note that in some cases you may need additional papers due to some complicated form of ownership. In each case we advise you to use us for your own security!
We would like to advices you not to forget you passport !
Our law office will represent you and provide guidance in each of the steps listed. Please contact us if you have any questions or if you need any assistance on the matters detailed herein.