Own Property In Bulgaria
At the present moment and in prior times, only Bulgarian nationals were allowed to own property in Bulgaria. There is however, a way around this law and many non Bulgarian nationals used it to own property in Bulgaria. The method is to start (organize) a Bulgarian company and then to purchase any property through the company’s ownership. This method is effective although it has some hidden effects.
The greatest disadvantage is that the company is required to file an annual company tax return and, of course, pay any taxes that may be due. Most such company’s do not actually trade and consequently, no taxes are actually due. Nevertheless, the tax return must be filed and associated filing fees paid. If the tax return is not files on a timely basis the company is subject to financial penalties.
To own property in Bulgaria therefore, one would have to first set-up a Bulgarian company. In order to accomplish company set-up, outsiders (not speaking or reading the Bulgarian language) would need to hire someone to accomplish this task for them. While there is no real established rate for this service, most such charges range from 300 to (in some cases) 800 Euros or Pounds Sterling depending on your choice of representative. Most real estate agents in Bulgaria offer such a service, but the funny thing is that they quote prices in either Euros or Pounds Sterling when the Bulgarian government charges in Levs (the current Bulgarian currency).
Real estate agents also offer to handle the company’s annual tax filing, for a fee of course. These fees are generally quoted anywhere between 150 to 300 (Euros or Pounds Sterling), when again, the Bulgarian government charges fees in Levs.
As a matter of interest, we at Bulgarian Properties For Sale also offer these same services. We do not pretend to offer assistance for legal or accounting matters. Instead, we have professional and qualified Bulgarian lawyers and accountants who perform these services for our clients. The average cost to set-up a company is 500 Levs (the equivalent of 253.55 Euro or 221.62 Pounds Sterling), while our staff accountants charge (for a non-trading company) less than 100 Levs (the equivalent of 50.71 Euro or 44.32 Pounds Sterling).
Can you handle these processes yourself. Of course you can. That is, if you can read and write Bulgarian and happen to be well versed in Bulgarian law.
The great news is that as of January 1, 2012 a Bulgarian company will no longer be required in order to own property in Bulgaria. In essence, you will be able to own property in Bulgaria in your own name or jointly with other real persons. This change will also eliminate the need to file an annual company tax return. Although this is a great reason to wait until after January 1, 2012 to purchase property in Bulgaria, it would not be a good idea to let a prize cheap property slip through your fingers while you wait!
For those who already own a company that is the owner of their currently held property, they will have to make a decision as to whether to dissolve their non-trading company and transfer ownership to themselves, or continue as they have been, remembering to file their return annually. This article can not at present make any recommendations in this matter since, to date, the mechanism and costs involved in such a procedure have not been made public. We are however, checking into the matters involved and will report back in another post.
It will be a great investment to own property in Bulgaria. Contact us with your requirements!