If you already have a Bulgarian property or are planning to invest into Bulgarian properties, it makes sense to be aware what will be the costs associated when selling your Bulgarian properties.
The major costs when selling your Bulgarian properties are:
1. Local tax – currently 2% of the purchase price. This is the alternative to the UK stamp duty. Similarly to the UK the Bulgarian local tax (stamp duty) is a subject to political speculations, however it is unlikely that this will be changed soon.
2. Council tax – 0.1% of the purchase price. This council tax has nothing to do with the council tax in the UK. It is alternative to the UK Land Registry and it is where the buyer will receive their deeds.
3. Notary fees. The notary fee is a favourite topic for discussion of the Bulgarian lawmakers in connection with the double valuation standards being the practice in Bulgaria at the moment. Each Bulgarian property when purchased/sold is valued by a tax valuation officer, however the tax office valuations are based on old price range schemes which are very conservative and reflect prices 20-30 years ago and are several times smaller than the current market values of Bulgarian properties.
For example a property in Bulgaria which is being sold for €100,000 will normally have a tax valuation of €10,000. The practice in Bulgaria is that it is up to the buyer and/or the seller, respectively what valuation figures to use.
Therefore, you can pay notary fees either based on the €100,000 agreed market price or on €10,000 tax valuation as per tax office valuation. Most likely this situation will change soon in view of Bulgaria’s EU accession.
The notary fee, regardless of which method of valuation of your Bulgarian properties you decide to use, is calculated on the following basis:
A. Properties in Bulgaria between BGL10,000 – BGL50,000 (€5,000 – €25,000): BGL118 (€60) + 0.5% of the amount above BGL10,000 (€5,000)
B. Bulgarian properties between BGL50,000 – BGL100,000 (€25,000 – €50,000): BGL318 (€170) + 0.2% of the amount above BGL50,000 (€25,000)
C. Properties for sale in Bulgaria that cost over BGL100,000 (€50,000): BGL418 (€209) + 0.1% of the amount above BGL100,000 (€50,000)
4. Other fees – there will always be some other costs like postage, translation of documents in English, etc. These should not be over €200.
5. Solicitor’s fees – as in the UK it is always better to have a solicitor who will be representing you in during the process of buying Bulgarian properties. Solicitor’s fees vary widely from €150 to €800. The solicitor we are working with has a fee of €400, which is, I guess, reasonable. The most important is that you are confident and trust your solicitor, since in most cases he/she will have to deal with the sale of your Bulgarian property in your absence.
If your have accepted a €55,000 offer for your Bulgarian property the taxes you will have to pay are: 1.€1,100; 2.€55; 3.€214. The property is in band C, therefore your notary fees will be €209 + 0.1% of €5,000 e.g. €5 (this is assuming you decide to go for the market value and not the tax valuation) 4.€150; 5.€300.
As % of the total value the costs for selling your Bulgarian properties is under 4% which compared to other European holiday and property destinations is rather reasonable.