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Buyers Guide
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| We pride ourselves on our ability make investing in Bulgarian property simple and straightforward. Our expert staff takes care of absolutely everything, guiding you through every step of the process. However, we also feel it’s professional to give you access to as much information as possible. In this section you’ll find a wealth of detail so you know exactly what’s involved at every step. |
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| Choosing your property |
| Go to the Properties section of this site to see the selection of developments we can currently offer. The choice is wide, but not as extensive as some other companies in the market. That’s because we firmly believe in offering quality rather than quantity - at BG Developments we are very selective and discerning. We take great care to create investment opportunities that are secure and profitable, and take more time to build and maintain good relationships with our customers, suppliers and partners. We create properties that people want to buy and investment opportunities whose qualities speak for themselves – our staff are not sales reps but professional advisors who are there to help and advise you. |
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| Once you have found what you are looking for either email info@bg-developments.co.uk or call Freephone 0800 013 1993 to confirm availability and request more information. Once you receive this pack you need to meet up with one of our Areas Managers for a further discussion. You then complete our Purchase Option Agreement Form. Once we receive this, with your holding deposit of £2000, we will contact you to arrange a Free Viewing Trip. The property of your choice will be immediately taken off our sales list for the next 30 days. |
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| If you feel, on your inspection visit, that this property does not fully match your needs and expectations we will help you find one of our properties that is more suitable. Your reservation fee will then be transferred from one property to the other. This fee is non-refundable, but is deducted from your first instalment and entitles you to your Free Viewing Trip. |
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| Your Free Viewing Trip |
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Buying a property in Bulgaria makes terrific financial sense. And nobody is better placed than BG Developments to maximize your
investment and smooth the process. However, it is still a big decision for you – one that involves not just your head,
but your heart. We understand this and recognise that many of your questions cannot be satisfactorily answered in a few
minutes round a table in the UK. You need to go to Bulgaria and see the location, the development and the property for yourself.
It helps to soak up the atmosphere, experience the lifestyle and, most important of all, build a close relationship with the team of
local professionals who will be looking after your interests.
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| With this in mind we invite you over for a Free Viewing Trip. This will prove immensely reassuring, informative and enjoyable – we take care of everything, as you will see from this itinerary. |
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• Once you have completed the Purchase Option Agreement Form simply post it to our UK head office, along with your cheque for £2000.
• A member of our staff will then contact you to arrange the date for your trip.This normally lasts for 3 days and 2 nights.
• We will personally meet you at the airport and take you to your 3 or 4 star hotel.
• You will then attend a short seminar that gives you an informative overview of the international property market and why investment in Bulgaria makes so much sense right now.
• One of our key team members will show you around the area you have selected. They will drive you in an air-conditioned car to see all the main features of interest – beaches, golf courses, ski slopes, marinas, shops, cultural attractions, beauty spots and so on.
• During your time with us you will visit a range of different restaurants, from the sophisticated to the homely, so you gain a full appreciation of Bulgarian cuisine.
• In the evening you can either entertain yourselves or join our guides to sample the local night life.
• Throughout your stay our team will do their utmost to give you the best possible insight into every aspect of the country, the people, the lifestyle and the investment environment.
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| The preliminary contract |
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The next stage is similar to buying property in Britain. You and the developer sign and exchange a preliminary contract.
This clearly sets out the price, payment arrangements, timescales, building guarantees and any penalties for late
completion - it obliges them to build the property and obliges you to buy it and sets out those obligations in detail.
Once you return to the UK you will typically have 14 days in which to transfer your initial payment, which is generally 30%
of the purchase price, directly into the bank account of the developer.
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| Completion |
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During the course of construction you will pay one or more instalments, followed by a final payment.
Once the property is built the deeds are transferred to you. This is witnessed by a Notary.
A Notary is a senior solicitor licensed by the Government.
This involves a “Notary Act” and is the same as the Title Deeds we are familiar with in the UK – it ensures that all searches,
obligations and details are satisfactorily fulfilled and that all details are entered correctly on the deeds.
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| The benefits of buying “Off Plan” |
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| Experienced property investors are familiar with the process of buying “Off Plan”. This involves agreeing 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 makes sense. |
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• By dealing direct with the developer you avoid paying any middlemen (who may confuse matters and will almost certainly take a cut of your money!).
• By making your investment at this early stage you stand to make a greater capital gain.
• You have some influence over the design and specification of your property – it is being made to order.
• You get a brand new property and so avoid any refurbishment or conversion costs.
• Dealing direct with the developer makes the process simpler – you are talking to the people in the know who can make things happen!
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| Why is buying “Off Plan” more lucrative? |
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| When an area is undeveloped it is hard for most buyers to see the potential. Developers therefore have to price properties very competitively at the start, but can charge a lot more as the development takes shape. “Off Plan” prices are therefore often 30% - 50% lower than prices for completed properties - so you can make a handsome profit in a short space of time by getting in early. |
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| Arranging your mortgage |
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| BG Developments are experts in the field of property finance. We work closely with a number of leading banks in Bulgaria to tailor a package that precisely meets your individual requirements. |
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| Bulgarian mortgages are now available with a Loan to Value of up to 70%. This means that UK citizens with an income of £15,000 or above, and have a clean credit history, you will qualify for one of these mortgages. If you are a couple it’s even more affordable, because you only need a combined household income of £15,000 or above to qualify. |
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| The interest rate is typically 5.6% - 7.2%. This is variable and mortgages are only available on a repayment basis over a period up to 20 years. The bank will require proof of earnings, an employer’s reference, P60, pay slips and some bank statements. |
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| We’re with you all the way |
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| Our team of experts and specialists are always available to answer all your questions as they arise. Upon completion we will still maintain, manage and look after the property for you. Satisfied customers are our best advertisement and much of our business comes through referrals – we therefore provide outstanding service, even after the sales is completed. If you eventually want to resell your property to realise your profit we are there to help – we’ll help you find a buyer and handle the transaction on your behalf. |
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| Bulgarian Taxes and Fees explained |
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| Bulgaria is politically and economically stable. The Lev has been linked to the Euro since 1997 and legislation regarding property has recently undergone many positive reforms. Foreign investors can now buy property directly, or through a Bulgarian entity, and full repatriation of profits is guaranteed |
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Transfer Taxes and Fees
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| Government Transfer Tax |
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| The owner must pay a Government Transfer Tax which is 2% of the property’s value. |
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| Land Registry/Municipality Tax |
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| After the Notary Act is signed by the owner it must be registered and there is a fee for this. The fee is 0.1% of the property’s value. |
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| Notary Fees |
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| The owner must pay the Notary a fee for their services. This is about 1% of the property’s value, but it must not exceed 3000 Euros. |
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| Solicitors Fees |
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| Buying property in any country can sometimes be a little complicated and often the assistance of a solicitor is helpful. Solicitors fees in Bulgaria will generally range from 500 – 900 Euros depending on the value of the property. |
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| Local Tax Evaluation |
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| When the property is completed the local council will evaluate it for tax purposes. This valuation represents the minimum value that must be entered on the Notary Act. Tax rates vary by region but generally range from 45%-60% of the full market value. |
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| When you sell your property the same evaluation will be conducted again prior to the signing of the Notary Act. If a purchaser wants to register a value on the Notary Act that is higher than the tax evaluation figure then the additional costs incurred will be paid by the purchaser. These costs can include extra notary fees, municipal taxes and VAT. These costs can be substantial – the increase can be around 14% of the property value. |
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| All property prices listed on this site are supplied by the seller of the property of that property and are based (unless otherwise specified) on the local tax evaluation system for the Notary Act. |
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| Please note that the Tax Evaluation is not conducted by BG Developments or the development company. It is set by the local council and BG Developments accepts no liability for the content of the evaluation. |
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Taxes following purchase
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| Household waste fee |
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| The owner is charged an annual fee for waste removal by the local council. This is based on the amount of waste collected from that property the previous year. If the quantity cannot be calculated a standard fee is charged. |
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| Real Estate Property Tax |
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| The owner must register their property with the local council within two months of acquiring it. The owner will then have to pay Real Estate Property Tax, based on the Tax Evalution. The tax rate is 1.5 per mille of the total set value. |
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Capital Gains
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| Rental income |
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| 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 similar costs as well as interest on loans used for the acquisition of the property. The council will charge 10% of any profit made. This is then deducted from the taxable profits when it comes to paying corporation tax of 15%. |
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| Depreciation |
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| 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 a rate of 4% per annum according to the straight line 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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