Buying a property is a serious investment, which is why most buyers use a bank loan while also putting in their savings. What many people overlook, however, is that when setting their budget they must also account for the mandatory fees that are due.
Notarial fee
A) Sale / transfer of ownership
Contracts for the transfer of ownership and the establishment of real rights must be executed in the form of a notarial deed (Art. 18 of the Obligations and Contracts Act). Accordingly, a notarial fee must be paid to complete the notarial transaction.
The notarial fee is determined according to the material interest (in a purchase, this is the property price stated in the notarial deed).
* Please note that VAT is charged on the notarial fee, i.e. you must add 20% to it.
B) If the property is purchased with a mortgage loan
If the property is purchased using a mortgage (hypothecary) loan, the notarial fee for establishing a mortgage must also be taken into account.
- If the mortgage is contractual, it is established in the form of a notarial deed, and a notarial fee is paid according to the table above, where the material interest is the amount of the loan (it is possible the property costs BGN 300,000 but the loan is only BGN 200,000; in that case this amount will be stated in the mortgage deed and the notarial fee will be calculated on it).
- If the mortgage is statutory (by law), it is established by an application with notarized signature, and the notarial fee is again calculated on the material interest (the loan amount), but it equals 50% of the notarial fee determined under the table above.
Given that the notary may charge additional fees for issuing certified copies, obtaining a certificate of encumbrances, etc., we recommend being prepared with an additional BGN 100–200.
Registration fee
Notarial deeds must be registered with the Registry Agency.
A) For the sale
The fee due is 0.1% of the material interest (the property price).
B) For the mortgage
If a mortgage is established—whether statutory or contractual—a registration fee is also due, again 0.1% of the material interest stated in the mortgage.
Local tax
Upon acquisition, the buyer owes a local (municipal) tax. It is determined by an ordinance of the municipality where the property is located.
For the cities of Sofia, Plovdiv, Varna, Burgas, Stara Zagora, Veliko Tarnovo, Targovishte, Montana, Sliven and Dobrich, the rate is 3%.
However, the fee may be set at a different rate, for example:
- Pleven – 2.85%
- Ruse – 2.7%
- Shumen – 2.6%
- Vratsa – 2.5%
- Razgrad – 2.4%
(The above municipal tax rates for the listed municipalities are valid as of 03.08.2024.)
Broker’s commission
If you completed the transaction through a broker, you also owe them a commission fee. The amount depends on the brokerage agreement.
Most brokers require a commission of 3.6% including VAT of the property value.
Example calculation
If we have chosen a property worth BGN 300,000 and the buyer will finance the purchase with a BGN 200,000 mortgage loan secured by a contractual mortgage, the fees would be as follows:
Notarial fee
A) For the sale
(BGN 300,000 – BGN 100,000) × 0.2% + BGN 730.50 = BGN 1,130.50, to which VAT (20%) is added, i.e.
B) For the contractual mortgage
(BGN 200,000 – BGN 100,000) × 0.2% + BGN 730.50 = BGN 930.50, to which VAT (20%) is added, i.e.
Registration fee
A) For the sale
300,000 × 0.1% = BGN 300
B) For the mortgage
200,000 × 0.1% = BGN 200
* Usually, the notarial fee and registration fee together amount to about 0.5% of the property value, or about 1% if a mortgage is established.
Local tax
300,000 × 3% = BGN 9,000
Broker’s commission
300,000 × 3.6% = BGN 10,800
Total: BGN 22,773.20
* When planning your expenses, you should also keep in mind that the above costs are due no later than the day the notarial deed is signed, i.e. before the mortgage loan is disbursed. This means you cannot rely on the mortgage loan to cover them—you must provide the amount from personal funds or a consumer loan.
Also note that banks usually require a down payment, which depending on the type of construction and the property valuation varies from 10–15% (brick, EPC) to 30–35% (panel). This amount must be paid by the buyer no later than the day the notarial deed is signed (again, before the mortgage loan is disbursed).
In view of the above, before you set your budget for buying a property, keep in mind that you should have around 7.6% for mandatory fees and between 10% and 35% as a down payment.
It is important to note that under Art. 186 of the Obligations and Contracts Act, the costs of the contract and other expenses related to the transfer of ownership of real estate are paid equally by the parties. However, this provision is not mandatory, so the parties may agree otherwise.
For convenience, you can calculate the fees due by using the calculator on the website.
If you have further questions or need assistance, do not hesitate to contact us via the Contacts section.
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