Every spring, analysts note a surge in demand for overseas seaside real estate. And if Russians still choose villas and apartments in Spain, Italy or on the Cote d’Azur for investment, then the middle class segment buys cheaper houses on the coast as a second apartment. Among the budget options, Montenegro and Bulgaria are most often considered with their dynamic pace of construction, excellent climatic and financial conditions. Consider the legal framework for buying real estate in these countries.
Montenegro. Warm climate for buyers
The long-awaited event for foreign buyers finally took place: the government of Montenegro allowed non-residents to buy real estate in the country. The only caveat is that buying a house does not give ownership of land, which can only be leased out for an unlimited period. You can buy real estate in Montenegro in two stages: the first is a preliminary transaction, which allows the buyer to get acquainted with the full package of documents for real estate, to ensure the purity of the real estate history, and the seller to be confident in the client’s solvency. At this stage, 10% of the cost of the house or apartment is paid, after which the cost will no longer melt, regardless of seasonal and market fluctuations. The signing of the contract takes place at the second stage – in the court, which performs notarial functions. The real estate contract is described in detail – its area, materials used in construction and other details are indicated. The municipality then makes its own independent appraisal of the value of the property – this is done in order to calculate the purchase tax amount, which is 3% of the amount. By the way, in Montenegro there are quite low purchase costs. In addition to the already mentioned tax on the transfer of ownership, the buyer will have to pay only the services of a lawyer – about 150-300 euros – and the registration fee at the time of signing the contract and the completion of the transaction – its amount depends on the assessed value of the property and does not exceed 0.25% or 330 euros.
Bulgaria. In the shadow of the southern sun
In order to buy an apartment in one of the residential complexes built by Bulgarian developers, a Russian, like any other foreigner, needs a passport with an unexpired Bulgarian visa. If the buyer is interested in buying a villa with a land plot, then a legal entity must be established in the country..
You can start a deal already on the day you inspect the property – the procedure for buying a home here is no more complicated than purchasing an apartment in Montenegro. The seller is paid a small advance for the reservation (most often within 4000 leva or 2000 euros), after which the apartment or house is withdrawn from the sale. After 2-3 weeks, a preliminary contract is concluded and 25-30% of the cost of housing is paid. And finally, the completion of the transaction takes place at the notary, where the Notary Act is signed – the main document confirming the ownership of the new owner. The notarial deed is sent to the district judge in order to amend the State Register. Two more responsibilities of the new owner – no later than 60 days after the end of the transaction, you need to register with the Tax Inspectorate and receive a single identification number in Bulstat – the body responsible for registering homeowners in the country.
The main feature of concluding real estate transactions in Bulgaria is their “shadow” nature. Most often, the agreement contains an amount that is half the real size of the transaction, this is done to reduce the tax burden. However, even without this, the costs of buying Bulgarian real estate are small – a tax of 2%, state duty and notary fee, the total amount of all expenses is about 3% of the transaction amount specified in the contract.
Author: Elvira Kurmaeva
What are the key legal aspects that potential buyers need to consider and be aware of when purchasing real estate in Montenegro and Bulgaria? Are there any specific regulations or requirements that differ from other countries? Any advice on ensuring a smooth and secure transaction would be greatly appreciated.
When purchasing real estate in Montenegro and Bulgaria, potential buyers need to consider several key legal aspects. In Montenegro, foreign buyers may need to obtain permission from the Council of Ministers before purchasing property, while in Bulgaria, non-EU citizens may face restrictions on buying agricultural land.
Buyers should conduct thorough due diligence, including checking the property’s ownership, title deed, and any outstanding debts or liens. It is advisable to hire a qualified lawyer who is familiar with local laws and regulations to navigate the legal process and ensure a smooth transaction.
Specific regulations and requirements may vary between countries, so it is crucial to familiarize oneself with the local property laws. In both countries, buyers should also be aware of taxes, fees, and potential restrictions on property usage.
To ensure a secure transaction, it is essential to have a clear contract outlining all terms and conditions, including payment schedule and responsibilities of both parties. Working with reputable real estate agents and professionals can provide guidance and support throughout the buying process.
What are the legal requirements and potential risks involved in purchasing real estate in Montenegro and Bulgaria? Are there any specific laws or regulations that buyers should be aware of before making a purchase?