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Questions about properties in Bulgaria Questions and answers about bulgarian property market. Information how to buy or sell property in Bulgaria. Low and taxes information. Facts, tips and tricks, trends.
Pages with Questions - PROPERTIES IN BULGARIA: [1][2][3][4][5][6][7][8][9]
70. What is Depreciation of Bulgarian Properties?71. Is it possible losses to be carried forward for the future period?72. What about Capital Gains?73. What is the amount of the Transfer Taxes for Bulgarian Property Bargain?74. What kind of Local Taxes and Rates for property in Bulgaria I owe?75. Value Added Tax (VAT) for property bargain?76. I am in process of buying a property in Bulgaria. The seller suggests me that we can declare lower price of the property when on the Deed of Transfer. Is this safe to me.77. I know there are commissions for real estates agents - is it better if I made the bargain by my self?78. What are the top five most exclusive areas in Sofia to buy a property?79. There are Ebayers selling Bulgarian properties and offering to set up a company for you for an extra cost. Are there any pitfalls to this or is it ok to go ahead?
Pages with Questions - PROPERTIES IN BULGARIA: [1][2][3][4][5][6][7][8][9]
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Q70: What is Depreciation of Bulgarian Properties?
A70: Land itself is not depreciable, although any immovable property affixed thereto is, provided that it is used for the business activities of the company and is recorded as a fixed asset.
Depreciation for tax purposes is at a rate of 4% per annum, and is usually calculated using the straight-line method. Real estate acquired for the purpose of re-sale is considered as "investment property". As such, it is non-depreciable and is subject to annual revaluation to the market value. In practice, it is often unclear in which situations a property should be treated as an "investment property" or a fixed asset.
more info >> /properties/Dir.asp?id=190
go topQ71: Is it possible losses to be carried forward for the future period?
A71: Tax losses can be carried forward for a five-year period. Losses cannot be offset against profits from previous years.
more info >> /properties/Dir.asp?id=190
go top Q72: What about Capital Gains?
A72: Capital gains are treated as ordinary income subject to corporate income tax.
more info >> /properties/Dir.asp?id=190
go top Q73: What is the amount of the Transfer Taxes for Bulgarian Property Bargain?
A73: Apart from corporate tax, no other direct taxes are levied on the transfer of real estate. However the transfer is subject to notary and municipal fees. 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 BGN 3, 500. In addition, 2% of the market value of the property is paid to the municipality in which the property is located.
more info >> /properties/Dir.asp?id=190
go top Q74: What kind of Local Taxes and Rates for property in Bulgaria I owe?
A74: The owner of a building or a plot is obliged to pay a real property tax. Where a building is built on a State or municipal plot, the value of the plot will also be included in the tax base. The tax is equal to 0.15% of the book value of the property. Arable land is exempt from local taxes. In addition to the real property tax, owners also pay waste-collection fees.
more info >> /properties/Dir.asp?id=190
go top Q75: Value Added Tax (VAT) for property bargain?
A75: Value Added Tax (VAT) - Transactions with land and lease of property for residential purposes are exempt from value added tax.
All other real estate transactions are subject to VAT at the uniform rate of 20% (will be changed after Nulgaria joins to EU). The buyer/lessee is entitled to a VAT refund, provided it is registered for VAT purposes.
more info >> /properties/Dir.asp?id=190
go top Q76: I am in process of buying a property in Bulgaria. The seller suggests me that we can declare lower price of the property when on the Deed of Transfer. Is this safe to me.
A76: At all it is little illegal but it is not a precedent. In order to avoid paying excessive amounts of Capital Gains Tax (which can amount to as much as 30% of the real purchase price), it is likely that the current owner of the property will not want to declare the real price of the property on the Deed of Transfer. The Title Deeds will therefore display a lower figure than the actual price you paid for the property. This situation will have its financial consequences, such as not having official documents for the real money you spent plus liability for higher taxes if you decide to sell the property afterwards and declare its real value. You will need to consult your broker/lawyer on this and all aspects of the deal to avoid any eventual misinterpretations or oversights.
go top Q77: I know there are commissions for real estates agents - is it better if I made the bargain by my self?
A77: No - find licensed agent! It is important to work with a well established agent who will guide you through each step of the property buying process. See link below for list of some recommended real estate agencies:
more info >> Real Estate Agencies in Bulgaria
go top Q78: What are the top five most exclusive areas in Sofia to buy a property?
A78: It depend on what kind of property you looking for but at general:
- Sofia City Center (for offices, shops, etc.)
- Boyana & Dragalevtsi (for home)
- Knyazhevo (for home and apartment)
- Borovo, Manastirski livadi (apartment)
- small villages and towns near Sofia
see the link from more info to view available properties in this region - Sofia city!
more info >> Property for sale in Sofia region
go top Q79: There are Ebayers selling Bulgarian properties and offering to set up a company for you for an extra cost. Are there any pitfalls to this or is it ok to go ahead?
A79: Because the fact foreigners are not allowed to purchase a land (only land and not house or apartment) the way is to set-up a company here in Bulgaria. It is normal practice and is provided as service from most of the real estate agents as step from process of the bargain. There is additional fee (for the government and fee for the agent who register the company for you). Of course you can do it your self (not so easy if don`t know Bulgarian language) or use external lawyer company (or person) to make this for you but there is fee again. There is no traps if you use well known real estate agency (see the link below)
more info >> Recommended Real Estate Agencies
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