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There are some restrictions on foreigners purchasing property in Bulgaria; however, this is thought to change when Bulgaria joins the European Union in 2007. At the moment a foreign individual may buy property with no stipulations, but may not purchase land. Therefore, a buyer would be able to buy an apartment with no restrictions, but the purchase of a house would be restricted unless the individual opened a Bulgarian bank account, formed a Bulgarian company and purchased the property through the company. The formation of a company is not as daunting as it sounds and your agent will be able to assist with this requirement.

It is only possible to set up a Bulgarian bank account whilst in Bulgaria and it would be advisable to take along your estate agent with you in case the bank workers do not speak your language. Setting up the account is easy and there is no charge to do so. It would be recommended to open the account in the currency of your home nation as well as in Bulgarian leva, that way you could transfer money in your native currency into your main account which could be transferred into the leva account to help pay for utility bills, etc. In addition to a personal bank account you will also need to open a company bank account and deposit a minimum of 5,000 leva which works out at approximately €2,500. To set up a Bulgarian company you should set aside roughly €750 and employ the services of an accountant to prepare the annual company accounts - this will only cost about €50.

With Bulgaria being a current hotspot in the overseas property investor world, there is no shortage of estate agents that will be able to assist with your property search, with a number of excellent Internet resources available. As with any booming industry there will be a number of good and bad agents, therefore, it is advisable for you to conduct research into you agent and preferably use companies that can provide referrals or who have been referred to you.

Once a property has been found that you would like to purchase, you will want to make an offer to the seller. It is not widespread to negotiate on price in Bulgaria, but it will not insult the seller if you do try to obtain a reduction. However, it is important to bear in mind that there is great demand for Bulgarian property at the moment due to the incredibly low pricing, so it may not be wise to haggle over a lower price as another buyer could easily step in to offer full asking price and secure the property.

If your offer is accepted, you should arrange for a survey to be conducted on the property and employ the services of a lawyer to draw up the contracts and check the legalities of the property. Should the survey be acceptable, the next stage of the process is to request a reservation receipt from the estate agent. This will include details of the price, description, location, reservation amount and guarantee that the property will be removed for sale. Once the reservation receipt has been completed, the seller will be provided with the preliminary sale contract, which will need to be signed in the presence of a notary and be requested to pay a deposit, which usually works out as 10% of the final price of the property.

The final contract is then drawn up and both the buyer and seller will need to execute the contract in the presence of the notary. The final sale fees will then be transferred over to the seller and the buyer will receive the title deeds roughly 14 days later. It should be noted that there is an idiosyncrasy in Bulgarian custom that dictates that if a property has been sold which is occupied, the occupants will expect to remain in residence in the property for up to a month after the completion date, so don't expect to move in straight away!

The following are a list of costs that you should budget for when purchasing a Bulgarian property -

Stamp duty - 2% of final price
Estate agent fees - 5% of final price (both seller and buyer pay estate agency fees)
Lawyers fees - From €1,500
Setting up a company - €750
Accountancy fees - €50
Fees for opening a personal and company bank account.

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