Q : What should I look out for when finding a property?
A : Finding the right investment object in Bulgaria can be a daunting task without the proper connections, market know-how and considerations. As a result of the neglected title registration during 50 years of socialism, land records are often out of date; some of them still missing and this combined with a majority of non-computerised systems could create a very confusing picture. So, to find a clean title is a crucial task in this market and it is perfectly possible to buy property with its history properly and legally recorded.

Q : How does the purchase of a property in Bulgaria work?
A : First, you find a property you like. Next, you determine whether the sale is with land. If the sale is with land, a company needs to be incorporated to hold the land. (Under the Bulgarian act on Foreign Ownership, foreigners are not allowed to own land but may own buildings. Foreigners can however own land by setting up a Bulgarian company to hold the property for them. In addition, the requirement to set up a company to buy land is likely to be done away with on entry of Bulgaria to the EU in 2007.) If sale is without land no company is needed. Next you receive an initial contract of sale (similar to 'Sold subject to contract' in the UK). If the property is already built, do the standard checks on the property using a reputable Bulgarian solicitor. Then you will sign the Notary Act (Contract of Purchase) in front of a Bulgarian Notary in Bulgaria. (Please note that the final Notary Act is not signed until the building is completed in the case of off plan developments).

Q : What are the special dangers of buying property in Bulgaria?
A : Bulgaria has certain legislation currently in place and also progressing through parliament which makes property investment extremely attractive as a corporate entity rather than as a private individual. The country is trying to encourage foreign investment and clearly the best way for them to do that is to give incentive and attract the `big money'. Of course if all you want is an inexpensive second home then that is fine. But if you believe that there are gains to be made by investing in property in Bulgaria there are other ways that those gains can be maximised and at less personal risk. And finally, as a private individual (or even as a syndicate) without local knowledge it will be very easy to make a mistake. There will be a massive learning curve in terms not just of what is a fair price or where is the best location to buy but also as regards local and national legislation regarding the entire process. Who do you trust and who don't you trust? What should or shouldn't you do? Having existing links with the country, including some very high level contacts via our company we believe that we are best positioned to either be able to advise you on how to proceed with an individual property purchase based on your specific requirements or on how to maximise the best potential returns from investing directly in the potential gains that could be made from property in Bulgaria.

Q : Who is the Notary?
A : The Notary is a public official who is there simply to put on the public record the fact that the title deed recording the sale/purchase has been signed in his or her presence and understood by the parties concerned.

Q : Where should the money be paid?
A : When the deed of sale is signed in front of the Notary either the purchase price is, in his or her presence, handed over to the person selling the house or the Seller confirms that the money has already been handed over. Proof of such payment is then incorporated into the title deeds of the property. Usually the price may be paid wherever in the world the parties agree.

Q : Do I have to be in Bulgaria to complete the transaction?
A : The person buying the house may attend in person before the Notary, but, if this is inconvenient, arrangements can be made for a Power of Attorney to be granted enabling another person to attend on their behalf. This must be in the Bulgarian form and signed in front of a Notary or in
Bulgarian Embassy.

Q : What about paying the taxes due?
A : Once the purchase formalities with the Notary have been completed, any taxes in relation to the transaction will be due.

Q : Is there a Land Registry system in Bulgaria?
A : Yes. There are the Cadastre and Property Register. After the Deed of Sale has been signed in front of the Notary he/she submits the Notary Deed to the Recordation Agency all transactions are registered relation to property and land. The tax for this service is 0.1 % over the selling price of property payable in front of the Notary. This tax is included in the Notary fees for property's transaction. The process of registration is compared just for 1-3 days.

Q : Are there any special points for new properties?
A : By law, where you pay all or part of the price before the property has been fully built, the property must have the benefit of a bank guarantee to ensure that, if the developer goes bust before he or she completed the building work, you do not lose your money. You must also make sure that the property specification is agreed in detail with the builder and that the property will be delivered to you complete with the necessary licence to occupy it as a home. Ideally you should not pay the final instalment of the price until this is produced but, because of bureaucratic delay it is common for the deeds transferring ownership to you to be signed and the price paid several months before this paperwork is issued by the local authorities.

Q : In whose name should I purchase the property?
A : There are a number of ways to purchase the property: in your own name, in the joint names of you and your wife or co-purchaser(s), in your children's names or in the name of somebody who will eventually inherit the property from you, in the name of a limited company, whether English, Bulgarian or "off-shore". Each method has its own advantages and disadvantages. Everything depends on your own personal circumstances. We shall be pleased to discuss the various ways of buying and to advise as to the most advantageous method for you. It is worth paying careful attention to this point because of the potential tax and other savings that can be made at a later stage. The tax savings also arise because of the way that each time a property changes hands, certain taxes and fees become payable. If you can minimise the number of times it changes hands, you can greatly reduce your tax liabilities. As always with tax savings schemes there is a danger that the Government can close the loopholes that allow the schemes to operate and, as always, there are disadvantages to them as well as advantages. In each individual case, you will have to weigh up the advantages and the disadvantages and decide how you wish to deal with the transaction.

Q : What extra fees should I be prepared for?
A : In Bulgaria there are no direct taxes levied on the transfer of a property. The transfer is, however, subject to notary and municipal fees. The notary fees are paid on the higher of the market price or the book value of the property at varying rates, with the maximum being Bulgarian Leva (BGN) 3,500 (£1,200). In addition, 2% of the market value of the property is paid to the municipality in which the property is situated. Usually tax is divided between the Seller and the Buyer equally if they do not understand differently. The owner of a building or a plot is obliged to pay a property tax as well that is 0.15% of the book value of the property. At the transfer of property, the acquirer is due to pay tax from the beginning of the month following the month when the change of ownership, or use, occurred, except if the tax has been paid by the transferor. Finally, all or part of these charges may attract Bulgarian or English VAT at the current rate.

Q : Are there any other things I should do at the same time as I buy a property?
A : We believe that it saves a great deal of time, effort and money later on if you now review your Will and make a separate Bulgarian Will. For most people the cost of this is fairly small. You will wish to insure your property and its contents.

Q : What happens if I decide to live and/or work in Bulgaria?
A : A foreign person according to the Bulgarian law is each person, who is not a Bulgarian citizen. A foreign person may stay in Bulgaria on the ground of holding a valid visa only up to 90 days within each period of six months regardless of the validity of the visa. Visas shall not be required when between the Republic of Bulgaria and the country which citizen is the foreigner there is a concluded agreement or there is an act of the Council of Ministers of the Republic of Bulgaria for a visa free regime. If a foreign person wishes to stay in Bulgaria for more than 90 days within each period of 6 months on one of the grounds listed below, then an application for a Long-term Visa (type "D" visa) has to be submitted to this Embassy. A foreigner having entered the territory of the Republic of Bulgaria shall be obliged, within 48 hours after his entry in the country, to declare in writing the address at which he stays before the services for administrative control of foreigners or at the regional police department at the place of their stay, announcing the full name, date of birth, citizenship, number and series of the identification document. By the order and within 48 hours period the foreigner shall be obliged to inform the office for administrative control of the foreigners at the place of his stay about every change of the address at which he stays. A foreigner who wishes to extend the term of his stay in the Republic of Bulgaria must request a permit from the bodies of directorate "Migration" of MI not later than 7 working days before the expiration of the permitted term of stay. When the foreign person enters the country on a Long-term Visa, he is required to contact the competent authorities of the Ministry of Internal Affairs exercising control over the foreign persons staying in the country and obtain a long-term or a permanent residence permit. The permit is a small size document with a photo and serves as ID for the Bulgarian authorities.

Q : After I have settled in, what taxes do I have to pay?
A : The Law for taxation of the income of physical persons sets forth the rules on the taxation of incomes of individuals, residents and non-residents, sole proprietors, as well as the incomes of certain corporate entities, explicitly stated in the Act, derived in a calendar year (the calendar year coincides with the fiscal year). Under Law tax liable persons are individuals - residents and non-residents, and corporate entities explicitly enumerated in the Law. Under this Law residents, irrespective of their citizenship, are deemed those persons: who have their permanent domicile in Bulgaria; who reside in the country for more than 183 days in a 365-day period Residents are liable for their worldwide income. Non-residents are deemed those individuals who do not fit the Act's criteria for residents. Non-residents are liable only for their income derived from Bulgarian sources. Foreign experts are taxed only on their Bulgarian-source income irrespective of the duration of their stay in the country.

Q : What happens if either I or my co-owner should die?
A : Jointly owned property does not automatically pass to the survivor. It will be dealt with according to any instructions which you leave in your Will or, if you do not leave a Will, under the rules relating to intestacy. It is generally much cheaper and simpler to deal with your affairs if you have made a Bulgarian Will.