One common practice is for unscrupulous agents to declare a property worth around €130,000 as worth a meagre €30,000 so that once the transaction is complete the recipient of the money will not have to pay tax on the larger sum.
But this means that the new owner, usually a foreign national, has a property that is officially worth less than it really is and this has major implications, according to law firm Tom McGrath & Associates who have been dealing with a number of problem cases.
'Developers and real estate agents in Bulgaria have a more aggressive approach to property sales and our firm has dealt with hundreds of people who have encountered problems when buying property abroad,' said David O'Donnell from the Irish based firm.
'A Bulgarian contract is hardly worth the paper that it is printed on. In some cases, buyers are signing contracts where the property is valued at much less than they are paying, in order to avoid more tax, at the behest of property agents,' he explained.
One of the most shocking recent examples was that of English ballet teacher Nichola West, who was attacked by a suspected member of the Bulgarian mafia, following her digging out a scheme around a property fraud that has robbed British and foreign investors of millions of pounds.
West, unperturbed by warnings that matters might escalate and became a lot worse, returned to Bulgaria and demanded an explanation and her money back from those who 'robbed' her.
Upon arriving at the office where the transaction was made, she was confronted by two large men who threatened to kill her. She had to flee for her life and had to be helped to safety out of the country.
She has now approached her local MP in the East Anglia town of Norwich South, Charles Clarke, to raise the issue of the wide-spread real estate fraud in Bulgaria in the British House of Commons.
There are those in Bulgaria who are trying to stamp our corruption. Bulgarian MP Atanas Atanssov is trying to convince the government that the country's has to change. 'The former communists that rule Bulgaria are fond of European money, but not European regulations. I hate to say it as a Bulgarian, but corruption is rife here. It is not so much under the table as on the table,' she said.
Ever since Bulgaria was accepted in the European Union on January 1 2007, the country has seen increasing interest from foreign property investors. But now that prices are falling and interest declining because of the global credit crunch there are fears that the corruption and aggression will increase.
