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Cost of buying

Discussion in 'Bulgaria Property' started by Jain and Chris, Sep 3, 2007.

  1. Jain and Chris

    Jain and Chris Senior Member

    I saw recently that the cost of buying property in Bulgaria is about 25%!!!! What !?!?

    I thought it would be useful to clarify this and put to rights what costs are when buying in Bulgaria, so here goes and hope it helps:

    May or may not need to establish a Bulgarian company - 500 euros
    Municipal Tax - 2% of price
    Property Tax - .1% of price
    Notary Fees (on a sliding scale) - example, price of over 100,000 lv then 418 lv plus .1% of the price over 100,000 euros
    Agency Commission - hmmm?? should be 3% approx
    VAT - charged by a developer / VAT registered company - 20%
    Transfer of monies - Unknown, but should be allowed for, check out currency brokers who often do this for free if over 5,000 pounds.

    Now, it depends upon how you look at all of this. What are "costs" or as per the Sunday Mirror article for "fees and charges"?

    For someone buying an apartment from a developer who is VAT registered, at say a price of 120,000 lv ex VAT, then the costs would equate to approximately 30,638 lv, which is just over 25%. However, if you don't include VAT as a "cost" but consider it part of the purchase price, then the costs are only 6,658 lv, making it significantly under six and a half per cent.

    For someone buying a house from an individual and not through a developer (so no VAT to pay), at the same price of 120,000 lv, then the costs would equate to approx 7,158 lv, a fraction under six per cent.

    At a lower level sale, say 60,000 lv and not through a developer either, you are going to be paying 2% municipal tax, .1% property tax, 3% agency commission, 318 lv and .2% notary fees over 50,000. Therefore, you'll still pretty much around the 6% mark.

    Some agencies wrap up the whole thing as one sale price (which includes property price and VAT, municipality tax, property tax) and only exclude notary fees - so that makes the additional "costs" appear really cheap but there is no getting away from it, the "costs" as given above are still there, hidden inside the price quoted to you or not.

    Happy property hunting
     
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