1. Q I would like to you to confirm that the building contractor has building fire insurance in place
during the present construction phase? It would be reassuring to know that he would be able to
complete the project, if for example the building were to be destroyed by fire anytime before
completion and hand over.
A Yes, the building contractor had building fire insurance in place so in the event that the
building was damaged or destroyed by fire the project would still be completed
2. Q is it your intention for a management company to be engaged either by yourselves, by residents
or by landlords/owners, to manage the building after completion, in order to deal with the mundane
issues as collection of service charges, cleaning of common spaces, maintenance of lifts, mechanical,
electrical, building fire insurance, local authority rates/taxes, security costs, rubbish collection,
structural repairs, etc..
A Yes, after completion a management company will be set in place to handle all the
aspects of maintenance, cleaning etc… and it will also handle all our clients’ needs
3. Q In reference to the buildings on boulevard Bulgaria, will the construction of the office building be
completed, and will it be occupied at the same time as the apartment’s buildings, or is that part of
the development happening later? is the office building completely stand alone in terms of services,
water, mechanical, electrical, parking, access,or are there any shared services between both, and if so
how will these be managed?
A The construction of the office building on boulevard Bulgaria will be completed and
ready at the same time as the apartment block, as for the utilities the office block will be
completely stand alone.
4. Q I understand I will be buying the properties completed to “first fix” stage. I will therefore need
some help to finish out the apartments, sanitary ware,tiling,lighting,heating,electrical,kitchen
installation,storage,decorating,furnishing,tv/phone/ISDN connection. Will you be able to find me
somebody who can help with this difficult task? I will find it impossible to do properly from here in
A Yes, Inter Bulgarian Properties will be there to help our clients with the second fix stage
and all other furnishing and installation needs
5. Q A)It is my intention to rent out the apartments that I have purchased when they are completed.
Could you advise of local practice? Do tenants usually enter into a lease? What is the minimum
period of a lease? Can you help me to find tenants? B)Are there laws that deal with property rights
between landlord and tenant that I should know about? If so are these laws effective? Is it hard to
get a tenant out of a property if they don’t pay their rent? Are the courts effective in this regard?
A Usually for the renting out of apartment a lease must be concluded. In this contract all the
rights and obligations of the parties are stipulated, including the amount of the rent, the
duration of the contract, the default payments upon breach of contract by any of the parties,
the termination terms, etc.
According to the Bulgarian law there is no minimum period of a lease, but the contract can
not be for a period longer than 10 years.
The law gives a common regulation of the distribution of the costs for maintaining the
apartment. The tenant pays the overheads and the small repairs referring damages from the
usual wasting. The repairs of all the other damages, if not caused voluntarily by the tenant,
are at the expense of the landlord and the tenant has the right to repair them and deduct the
expenses from the rent.
In order to insure a faster execution of the rights under the lease we recommend the
signatures of the parties to be notarially certified. And if the tenant does not pay the rent,
first the lease must be terminated and than if the tenant does not leave the property, there is
a benign procedure for the reinstatement of the possession of the property to the landlord
with the assisstance of the police.
6. Q It is my intention to form a limited liability company to acquire the ownership of the properties
so that I may be able to recover my VAT outlay in due course. As regards VAT registration I will
need your assistance in order that I can comply with main condition, which is to have a leviable
turnover of BGN 50k during the 12 months prior to completion of the purchase. You indicated
that you may be able to help me in this regard.
A Yes, we will arrange all the documents for the company and relative VAT returns and
ensure that all company law is complied with
7. Q Can you help me with a local address that I may use as the company’s registered address for
A All Inter Bulgarian Properties client’s purchases are registered at our Bulgarian office’s
address, we can arrange for mail to be forwarded from/to this address.
8. Q Can you confirm that the expected completion date for the developments is still December
2006 and is that when you expect me to pay the final instalment to acquire the ownership?
A the buildings will be completed by December 2006 at the latest, however we are pushing
the builders for earlier.
Payment of the final instalment will be required on completion which ever date that is
SOME OTHER CLIENTS QUESTIONS
Q “As discussed I am interested in the 2 apartments in Bulgaria. If I were to proceed and sell on at
completion I would be keen to minimize any tax
Implications. I currently have a trust in the Isle Of Man and would like to see if
this or a separate trust could be formed to be used for the purchase /
Re-sale. I am sure you have others in a similar situation--can you advise
A According to the principals of the international private law weather a trust may acquire property
abroad and in what way should be determined by the law under which it is registered, respectively
under which it is operating. And because under the Bulgarian law no legal figure as “trust” exist
we need to receive more information about the status of the trust according to your law (for
example – is it juristic person or other kind of association, etc.) in order to give you more precise
Q“What would happen to the properties that I have purchased if I died?
How do I stand with inheritance laws?”
A The Republic of Bulgaria has not entered into a treaty for legal assistance or consular convention
with the Republic of Ireland. Because of that in respect of the inheritance the principals of the
international private law should be applied. In order to avoid eventual disputes on whether the
determination of the heirs should be made according to the Bulgarian or to the Irish law, we
recommend you to make a will that shall be valid according to your law and thus dispose of your
property in Bulgaria, as you wish.
ALSO SOME OTHER GENERAL QUESTIONS:
1. Q There is a reference in the contract for purchasers to a final contract, what is this?
A The contract you have concluded with IBP is preliminary. Under this contract IBP has undertaken
the obligation to transfer you the ownership of the apartments. This is an absolutely valid contract
according to the Bulgarian law, but under this contract no ownership is transferred. This happens
when the final contract is signed by deed
2. Q What are the legal and other fees on completion?
A Before the list of the expenses for buying/selling property in Bulgaria you must have in
mind the following.in Bulgaria there is tax estimation price which is the estimation of the
property determined by the tax administration for tax purposes. ( similar to the uk “rateable
value”) Usually it is lower that the market price. The below txes and fees are paid on the
higher of the both sums at varying rates.
THE NOTARIAL FEES ( IN bgn)
Up to BGN 100 15
From 100.001 up to BGN 1000 15 + 1.5 % of the amount over 100
From 1000.001 up to BGN 10,000. 28.50 + 1% of the amount over 1000
From 10,000.001 up to BGN 50,000 118.50+0.5% of the amount over 10,000
From 50,000.001 up to BGN 100,000 318.50+0.2% of the amount over 50,000
Over BGN 100,000 418+0.1% of the amount over 100,000
But not more than 3000
Another fee is paid for the registration of the deed with the property register at the rate of
0.1% of the price and BGN 3 for each copy of the deed.
This tax is paid for the acquisition of real property and is at the rate of 2% of the price.
The attorney’s fee referring the transfer of the property is calculated on the higher of the
market price and tax estimated price and is at the rate of 1 per cent. It includes checking of
all the documents certifying the title of the Seller, the eventual presence of any mortgages or
other burdens; preparation of preliminary contract and notarial act /deed/; participation in
negotiations with potential Sellers / Buyers
3. Q Who will hold the title deeds for the apartments after completion of the purchase?
A You, in person or through representative (if you have authorized somebody to sign the
deed on your behalf) will receive the deed
4. Q Do the builders / developers give certificate of quality of their work?
5. How will I know that the apartment has been built to a proper standard?
6. Does the apartment building have a fire safety certificate?
7. Does the apartment have insurance to cover contents, fire etc?
A According to the Bulgarian legislature the constructions must be designed and built in
compliance with requirements for
- stability upon earthquake and loading referring the use
- fire-precaution safety
- protection of the health and life of the people and their property
- protection of the environment
economy of heat energy
The compliance of these requirements is controlled by the State Control on Construction
Administration. After the construction is completed this administration must issue an
authorization for use. It is issued only if the construction is made in compliance with the
above criteria. This authorization represents an approval of the building given from the
State and with this authorization the building is put into operation.
The preliminary approval of the projects of the building by the anti-fire administration is
absolutely necessary for the issuing of authorization for construction, which is absolutely
necessary condition for the constructor to start building.
8. Q Will there be an annual service charge on the apartment. If so, how much in Euros will this be?
A A tax on the immovable property is due at the rate of 1,5 %o (per thousand) on the tax
estimation price. Also a fee for the garbage is due. The amount of it is determines by the
local authorities every year and depends on various conditions, including the quadrature of
the apartment, its location, etc. Also e fee for the maintenance of the common parts must be
9. Q I am married, is there any difficulty in having my spouse join in the purchase?
A You and your spouse may co-own the apartment according to the Bulgarian law
10. Q What taxes will I have to pay if I sell the apartment and/or die while owning the apartment?
A The expenses for the selling of the apartment are specified in point 2.
If you die an inheritance tax on your property in Bulgaria will be due. The overlived spouse
and your grandparents, parents, children, grandchildren will not have to pay any taxes. In
case that you have none of the above heirs, the inheritance tax is determined for each of
your heirs, as follows:
For brothers and sisters and their children – 0,7 % on the inherited above the amount over
BGN 250 000.
For persons out of the mentioned in point 1 – 5 % on the inherited over BGN 250 000.
The value of the inherited property is determined according to the estimation made by the
tax administration at the moment of the death.
11. Q Do non-nationals have the same rights as Bulgarian nationals in respect of purchase of the
A According to the Constitution of the Republic of Bulgaria non-nationals have all the
rights for which it is not necessary to be a Bulgarian citizen. The only restriction in respect
of purchase of property is that non-nationals cannot purchase land.