Bulgaria - The Buying Process

Buying Overview

Buying a property in Italy is straightforward.

An Initial deposit of €3000 is needed to take the property off the market and from here your preliminary contracts can be drawn up.

In order to prepare the preliminary contract for the purchase, clients are asked to provide the following information at their earliest convenience, together with a photocopy of their passport. Should the purchase be made in more than one name, the client has to provide these details for each party concerned.

• Full Name
• Full Address
• Contact telephone numbers
• Email addresses
• Date of Birth
• Passport number
• Passport issue date
• Passport issuing authority

Legalities

In the preliminary contract, the stage payments are noted, and the client is required to pay the amount on the dates specified. The standard payment conditions are 3000€ reservation followed by 50% initial investment 4-6 weeks later.

Upon completion of the purchase, the client is required to sign the Notary Act. This is the title deed for the property.

We have an aftersales care team dedicated to keeping clients informed of any updates on the purchase, when a stage payment is due and when the property will be finished. We pride ourselves on making the process as simple and stress free as possible.

In addition, we work with many currency brokers who offer more favourable exchange rates than most high street operators. An example of a reputable company is www.globalcurrency.com

An organisation such as this enables you to pre-order currency at a favourable rate, if it is expected that a change in price will adversely affect your purchase in the future.

With respect to the legal elements of a purchase, we recommend that a legal practitioner specialising in Italian law is engaged in order to ensure a client’s best interests are served. We can, of course provide details of reputable local or international lawyers if required.

The fee for the lawyer will be in the region of 1-2% of the property value, and there is usually a payment schedule of 50% at contract (i.e. €300/ £208approx) and the other 50% when ownership is taken.

Costs

Taxes for each property depend on its price. As a guideline, however, the combined state and local taxes will usually equate to around 2.5% of the purchase price. Based on a property price of €100,000, the following approximate costs will apply:

Legal fees €2000 (depends on whether a local Italian or UK based solicitor is used.)

Country Tax (Stamp Duty) €10000 (10% for a foreign buyer or resident purchasing a second home, this is reduced to 4% if you are an Italian resident)

Notary Fees and translation fees €2000 – (approx 2% on signing of title deed)

Taxation

We recommend that you seek specialist advice from a qualified taxation practitioner before making any decisions with regard to an overseas property. However, this is a basic overview for information.

• The UK has a double taxation treaty with Italy, preventing an individual resident in the UK or Ireland who owns property in Italy paying tax in both locations
• Income of an individual is subject to a progressive tax. Currently a rate of 23% - 43%, depending on income.
• The standard rate corporation tax is 33%, although there are some exemptions based on company structure and industry.
• A foreign resident who is employed in Italy pays tax only on his income in Italy.
• To be considered as a Italian resident, an individual generally must reside in the country for at least 183 days in any calendar year.

Capital Gains Tax

In Italy, Capital gains on property are taxed as income, but there are exemptions:

• If the taxpayer owns properties which have not been their primary residence, but if they have been owned for 5 years or more.
• If the property that has been received by inheritance or gift from a relative there is no inheritance tax which was abolished in 2001.

VAT

VAT is charged on the sale of real estate in Italy at a rate of 10%.

Opening a Bank Account

The opening of a bank account in Italy is a simple process. In normal circumstances, your passport will act as proof of identity and is all that is required to open an account.

Mortgage & Finance Information

Mortgage finance is always a realistic option for UK buyers. Mortgages can be granted at very competitive rates usually up to 80% loan to value for terms up to 25 years

Disclaimer and Notice

The material contained within this document has been prepared for information purposes only. Information contained herein is not to be relied upon as a basis of any contract or commitment. The information is not to be construed as an offer, invitation or solicitation to invest and opinions expressed are subject to change without prior notice. Information contained herein is believed to be correct, but cannot be guaranteed. In case of queries or doubt you should consult an independent investment adviser. No personal recommendation is being made to you and the past is not necessarily a guide to the future.