DPC Law Firm
Can anyone (including foreigners) own and occupy real estate in your jurisdiction (including shares in property owning companies)? Are there any restrictions?
Yes, anyone (including foreigners) without restriction may own and occupy entire buildings or separate units in a building (apartments, offices, etc.) in Bulgaria. However, as a general rule, foreigners may not buy land in Bulgaria. If a foreigner wishes to own land in Bulgaria, he/she may register a Bulgarian legal entity under which name the land is to be obtained. As an exclusion to the above, citizens of countries in the EU and EEA and citizens of countries with which Bulgaria has an explicit contract are allowed to own land in Bulgaria. Depending on the specifics of the land (agricultural, forestry, etc.) there may be additional restrictions.
Are there restrictions on lending for the purchase of real estate by foreign companies? If so briefly give an outline?
Generally, there are no restrictions on lending to foreign companies for the purchase of real estate in Bulgaria.
However, indirect restrictions may occur depending on the borrower, the borrower's controlling shareholder or the borrower's jurisdiction of incorporation (if for example this jurisdiction falls into a sanction list). Indirect restrictions may also occur if the borrower fails to complete the KYC-check by the respective lender (for which they are required to perform by law).
A. Buying
Please provide a short summary of the fees and costs (including tax) relating to buying real estate in your jurisdiction.
The fees and costs related to buying real estate in Bulgaria are calculated on the basis of the tax evaluation of the property or the purchase price, whichever is higher. Thus, the fees are as follows:
Notary fees for the conclusion of the deal: between 0.1%-1%, depending on the value, with a maximum of BGN 6000 (approx. EUR 3000)
Tax: between 0.1%-3%, the exact amount is determined by the Municipality where the property is located (in the capital Sofia, it is 3%)
Registration of the deal in the land register: 0.1%
B. Owning
Are there taxes applicable to owning real estate and can the burden of the taxes be passed to someone else (e.g. a tenant or an occupier - not being the owner)?
Owning real estate in Bulgaria is subject to tax and waste management fees. The amount of these costs are determined by the Municipality on the basis of the tax evaluation of the property.
Contractually, these costs may be transferred to the tenant or any other occupier of the property.
C. Tax Breaks
Are there tax breaks or other incentives for foreigners to buy real estate in your jurisdiction? If so what are they?
There are no specific tax breaks for foreigners to buy real estate in Bulgaria. However, the tax burden when acquiring real estate may be legally mitigated through a well-planned structure of the deal. In addition, there are some incentives for bigger investors who acquire real estate in Bulgaria (more favourable conditions for acquiring state or municipal land, less administrative burden, no corporate tax under certain conditions, etc.). This, however, is subject to receiving a certificate as an investor following administrative procedures and meeting certain criteria.
How is the ownership of Real Estate evidenced in your jurisdiction?
The ownership of real estate in Bulgaria is evidenced by an ownership document which is registered in the Land register. In most cases the ownership document is a notary deed, however, depending on the particular case, it may also be a written contract, a state/municipal ownership act, etc.
Is it possible to keep the identity of owners of real estate confidential in your jurisdiction?
The access to the Land register where all ownership documents are registered is public and anyone may perform checks in the register and obtain copies of the registered documents (for a small fee). Thus, it is not possible to keep the identity of the owners confidential.