Overseas property owners in Bulgaria warned over law change
Bulgaria's low prices, beautiful scenery and kind climate have tempted many Brits to buy property in the country but now a leading firm of property lawyers is warning some owners could face financial penalties and even risk losing their property because of changes in Bulgarian Law.
West Yorkshire based John Howe & Co believes many people could be unaware of the complexities of the Bulgarian legal process and its potential impact on their properties. ‘We have been contacted by several owners of Bulgarian property who fear they may lose their assets to the government. There could be many other property owners who don’t know about the Bulgarian legal process and who could potentially risk losing their properties,’ said John Howe, managing partner at the firm. Until recently foreigners have not been able to buy land, or property with land, including houses, villas, and even some apartments, in Bulgaria in their own name. Therefore, it was common practice for foreigners to register a Bulgarian company and buy property through that. But what many property owners do not realise is that to comply with European Union legislation the Bulgarian government required all companies to be re-registered by 31 December 2011. The companies which failed to do so can no longer re-register, their trade activities are permanently ceased and they cannot trade or dispose of their assets. When new EU laws come into effect in Bulgaria this October, anyone who failed to re-register their company, many now face the prospect of a large bill and losing the assets of their Bulgarian company to the state, including any property. As one of only a handful of firms nationwide recommended by the Law Society for matters relating to the purchase of properties and apartments in Bulgaria, John Howe and his team have come up with a solution to this latest legal challenge for British owners of Bulgarian properties. ‘Our specialist team of property lawyers have done a lot of work investigating the issues surrounding the re-registering of Bulgarian properties and believe they have found a solution whereby individuals can liquidate the company and transfer all the assets to a group of shareholders,’ Howe explained. ‘The ultimate result is that the property remains in the hands of the original purchaser and isn’t lost to the state,’ he added. John Howe & Co has represented investors in Bulgaria and assisted them in the negotiation and purchase of properties in the region. The company has also acted for a large developer in the purchase of land and the subsequent development and sale of apartments. There are many thousand British expatriates currently residing in Bulgaria. Whilst no-one really knows exactly how many Brits have made Bulgaria their favoured short term destination or permanent residence, the numbers have steadily grown over the past several years. The British Embassy in Sofia estimates there are at least 8,000 to 9,000 British currently living in Bulgaria. Some are posted long term by their company; some take their regular vacations in Bulgaria; many have moved there permanently. One of the most appealing features of buying a property in Bulgaria is the value for money. Although rising, property prices are incredibly cheap. An average villa close to the sea can be purchased for around £30,000 with rural properties being offered for as little as £5,000.