Buying Property in Bulgaria as a Foreigner: EU and Non-EU Citizens

The Property Act allows foreigners and foreign legal entities to acquire ownership of buildings and limited rights in rem over real estate in the country, unless a law provides otherwise (Art. 29, para. 4 of the Property Act). In practice, this means that a citizen of a country outside the European Union can buy an apartment in a residential building or a standalone building.

The form of the transaction is the same as for Bulgarian citizens: the contract transferring ownership of real estate must be made by notarial deed (Art. 18 of the Obligations and Contracts Act), which is then entered in the Property Register.

For land, the law makes a distinction. Foreigners and foreign legal entities may acquire ownership of land under the terms of an international treaty ratified in accordance with Art. 22, para. 2 of the Constitution, and foreigners may also acquire it through inheritance by law (Art. 29, para. 1 of the Property Act).

Citizens of EU Member States and of states party to the Agreement on the European Economic Area may acquire ownership of land subject to the requirements laid down by law, in accordance with the terms of Bulgaria's Treaty of Accession to the EU (Art. 29, para. 2 of the Property Act). The same applies to legal entities from those states (Art. 29, para. 3).

The law also deals separately with the case of a second residential property: persons under Art. 29, para. 2 who do not reside permanently in Bulgaria may acquire land for a second residential property after the expiry of the period set in the Treaty of Accession (Art. 29a of the Property Act). This transitional period was five years from Bulgaria's accession on 1 January 2007 and has already expired, and the seven-year transitional period for agricultural land ended in 2014. Today the general statutory requirements remain, and for agricultural land its special regime also applies.

• An EU/EEA citizen buying a house with a yard can also acquire the land, subject to the statutory requirements.
• A citizen of a non-EU/EEA country can acquire an apartment or a building, but for the land beneath it and for the yard a legal basis is needed – an international treaty or inheritance by law. That is why, for houses and plots, other legal solutions are often sought, and these should be discussed with a lawyer.
• Agricultural land is also subject to a special regime, so a separate legal check is always needed.

Taxes on a purchase do not depend on citizenship. The buyer owes a local tax on the acquisition of property, which the municipal council sets at between 0.1 and 3 per cent of the property's assessed value (Art. 47, para. 2 of the Local Taxes and Fees Act). There is one particularity that depends not on citizenship but on where the buyer is located: when the acquirer is abroad, the tax is payable by the transferor (Art. 45, para. 2 of the Local Taxes and Fees Act). State clearly in the contract who bears the tax.

In addition to the tax, there are the notary fee and the registration fee – 0.1 per cent of the price, but not less than BGN 10 (EUR 5.11), according to the Tariff of the Registry Agency.

Real estate agencies are obliged entities under the Measures Against Money Laundering Act – the law expressly includes persons who professionally act as intermediaries in real estate transactions (Art. 4, item 18 of the Measures Against Money Laundering Act). It is therefore normal for the broker to ask for an identity document and information on the source of funds. Prepare these documents in advance so as not to delay the transaction.

If you cannot attend in person, you can authorise another person. The power of attorney must have a notarised signature, and when it is issued abroad, check in advance with the notary what authentication and translation requirements will apply. If you do not speak Bulgarian, also clarify early on how interpretation will be provided when the deed is signed.

• Check ownership and encumbrances in the Property Register.
• Clarify whether the transaction includes land and whether you can acquire it.
• Agree in writing who pays the local tax.
• Plan to pay by bank transfer and keep the transfer documents.
• Use an independent lawyer, especially for houses, plots and new-build properties.

• Property Act (Art. 29 and Art. 29a)
• European Commission – Report COM(2010) 734 on the transitional measures for the acquisition of agricultural land in Bulgaria
• Obligations and Contracts Act (Art. 18)
• Measures Against Money Laundering Act (Art. 4, item 18)
• Local Taxes and Fees Act (Art. 45, 47) – Ministry of Finance
• Tariff of the State Fees Collected by the Registry Agency (Art. 2)

This article is not legal or tax advice. The rules on the acquisition of land by foreigners depend on the specific case; consult a lawyer before the transaction.