Countries we lend for
Bulgaria
Our Bulgarian mortgages
In order to satisfy features of the Bulgarian property market, we constantly review the different features of our Bulgarian mortgage so as to satisfy the varying needs of our customers.
In this respect, we have developed an interest only Euro mortgage in addition to our standard repayment mortgage. In addition, our mortgage allows for a partial drawdown at the point of 'rough construction' and we take into account rental income when assessing affordability. Click for our Bulgarian mortgage terms.
If you plan to commission your own home or require a product that does not fit the set parameters of our existing mortgages, we will be happy to speak to you and perhaps tailor-make the mortgage that best suits your circumstances.
The Process explained
Irrespective of the property you are buying, you should:
- Obtain a decision in principle from the Mortgage Lender (if you intend to borrow)
- Instruct an English-speaking solicitor
- Set up a local bank account
We recommend that, if you have already decided on the area in Bulgaria where you want to buy, you find a solicitor before you leave the UK so that you are ready to visit them and put the necessary Power of Attorney in place before you return to the UK. Please note that Powers of Attorney need to be notarised and apostilled in order for them to be accepted in Bulgaria.
It is also advisable for you to set up your bank account in Bulgaria at the same time. If you plan to borrow for your purchase from Piraeus Bank UK, it makes sense and will facilitate things if you open an account at the local branch of Piraeus Bank. There are English speakers at all of our 70 plus branches who will be able to assist you.
For completed properties
The whole process from start to finish, assuming that your mortgage is in place and that there are no legal hitches, should not take you longer than six weeks.
During this period your solicitor will have obtained your Tax ID number and checked that i) the legal title to the property is valid; ii) that it has a valid planning permission and plans which meet local building regulations; iii) that there are no outstanding debts on the property or its seller; iv) that the purchase tax has been paid by you to the local tax authority and that v) everything is ready for the signing of the contracts at the Notary's office. You can choose either to be there to sign in person or for your solicitor to sign on your behalf.
For off-plan properties
The time that an off-plan purchase may take will largely depend on the time needed to complete the property or development.
You should still however appoint a solicitor before you commit to pay a deposit as your solicitor should advise you on the contract that you will be asked to sign. It is important to know that a preliminary purchase agreement does not give you title to the land so it is important for you to be comfortable with the ability of the developer to complete the property. You should also confirm the progress which has been made during the construction process, preferably by visiting the site yourself each time before you advance further funds.
Banks are normally reluctant to lend for the purchase of off-plan properties but we shall be happy to look at such a case if Piraeus Bank has also financed the developer for the particular project.
For Self-Built properties
The time that you need to allow for the purchase of the land and the construction of your property will rarely be shorter than twelve to eighteen months. Even if you own the land already and your architect, Civil Engineer and builder are totally dedicated to your project, you need to allow at least two to three months for obtaining the necessary licenses and extra time for delivery of materials or changes that may need to take place from the original plans.
Remember: always allow a cushion for cost over-runs. It is not unusual for the final bill to be 15%-25% over what you originally anticipated
Also, always incorporate in your contract a penalty clause for late completion of the property by the builder/developer.
Legal Process
The Bulgarian legal system is based on the Napoleonic system and in that sense is similar to the legal system of other Mediterranean countries but differs to that of the UK. It is however a comprehensive and well established system which offers comfort to potential buyers of Bulgarian property - even though the history of land ownership is such that it makes the need for due care and exhaustive searches by your solicitor all the more necessary.
Following his appointment, your solicitor will carry out the following steps:
Tax Planning
Apart from the tax (equivalent of the stamp duty in the UK) that will apply to your purchase in Bulgaria, there are other taxes that you need to be aware of when planning for the future.
Although we provide you a basic outline of some tax costs as part of the application process, we strongly recommend that you seek tax advice from a qualified adviser who has knowledge of both the Bulgarian and the UK tax systems. Depending on your circumstances and if you plan to buy land, a single property on land or let your Bulgarian property for part of the year, it may for example be better for you to set up a Bulgarian company as opposed to buying in your name.
Remember: you will need to make a will in Bulgaria to address your Bulgarian property and any other assets you acquire in Bulgaria.