Donation of real estate

What is a Donation as per Bulgarian law?

The law defines a donation as “a contract by which the donor immediately and gratuitously transfers something to the donee, who accepts it” – Article 225 of the Bulgarian Obligations and Contracts Act (ЗЗД / OCA).
 

A donation is a contract, because it is “an agreement between two or more persons for the creation, regulation, or termination of civil rights and obligations.” In this case, there is an agreement/consent between two parties (the donor and the donee) that the specified real estate property will become the property of the donee. Their will is mutual.
 

The donor transfers the property “immediately”, meaning at the moment of executing the donation, not at a future time, otherwise the donation produces no effect. Support for this is found in Article 226 of the OCA – “A promise to make a donation has no effect.”
 

Only property owned by the donor at the time of the donation can be the subject of such a transfer. For example, if the donor “donates” a property that they have not yet purchased or otherwise acquired but intend to in the near future, that “donation” is null and void. A null donation is treated by law as legally nonexistent – as if it never occurred – and therefore has no legal effect. In such a case, the donor does not transfer the intended property, and the donee does not become the owner.

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A donation must be “gratuitous.” The donor should not expect any financial gain but should act with the clear awareness that they are transferring ownership without receiving any payment or compensation, nor expecting the donee to assume any financial obligation in favor of the donor.

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Donation with a Burden

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The law allows for a donation with a burden. In such cases, the donation contract becomes bilateral, meaning that each party has mutual rights and obligations. The purpose of such a donation is for the donor to transfer ownership of the real estate property to the donee, but under the condition that the donee must give or do something, or refrain from doing something.

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However, the burden must be feasible – that is, the obligation undertaken by the donee must be objectively possible to perform. Otherwise, the law declares the donation null and void, and it produces no effect.

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The donor has the right, in case of non-fulfillment of the burden, to terminate the contract under Article 87 of the OCA, which states:

“When the debtor (the donee) under a bilateral contract fails to fulfill their obligation for a reason for which they are responsible, the creditor (the donor) may terminate the contract after granting the debtor a suitable term for performance and warning that upon expiration of that term the contract will be considered terminated.”

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In addition, a donation is null and void when it, or the motive for making it, is contrary to the law or to good morals. By “good morals,” the legislator refers to moral principles.

What are the Consequences of a Null Donation?

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If a court declares a donation contract null and void, the effects of the transfer are deemed never to have occurred – the donee does not become the owner of the donated property. If the donee has used the property as if it were their own, they are considered a non-owner and must compensate the true owner for the period during which the owner was deprived of the ability to use the property.

Who Can Be a Donor or a Donee?

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A donor can be any legally capable individual who owns the property. This means a person who is of legal age (a donation made by a minor is void), mentally sound, and not restricted by a court from performing legal actions. A legal entity can also act as a donor. In both cases, the donor can be represented by a power of attorney.

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A donee can be any person, regardless of age, as long as they are properly represented if under 18 years old.

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What Documents Are Required?

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The documents for completing a donation must meet the same requirements as in a property sale:

• Proof of ownership (showing the donor is the actual owner of the property)

• Property sketch or plan

• Tax valuation

• Construction documents (if necessary)

• Any other documents specific to the case

If you have any questions, do not hesitate to contact us for consultation.

What Are the Costs of Transferring Property by Donation?

The costs of the notarial procedure are usually borne by the donor, though there is no legal prohibition against sharing them between the donor and the donee.

The following fees apply to donations:

Notarial Fees

The notarial fee is determined according to the material value of the transaction.
Note: VAT (20%) is added to the notarial fee.

Local Tax

This tax is set according to the municipal ordinance where the donation takes place, so it may vary depending on the location and the relationship between the parties:

• 0% – for donations between direct relatives (parents, children, grandchildren) and between spouses

• 0.7% – for donations between siblings and their children

• 5% – for donations between other persons

Please note that the above rates apply to Sofia Municipality.

Registration Fee

This fee is payable to the Registry Agency and amounts to:

• 0.1% of the material value (the property’s value)

For full assistance and consultation regarding the donation of real estate, contact us today through our provided contact details.

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If you would like to learn about the costs of selling real estate, you can use our calculator for easier computation.