New EU laws come into effect in Bulgaria this October
Some foreign owners of property in Bulgaria could face financial penalties and even risk losing their property because of changes in the law.
Many people could be unaware of the complexities of the Bulgarian legal process and its potential impact on their properties, according to West Yorkshire based legal firm John Howe & Co.
‘We have been contacted by several owners of Bulgarian property who fear they may lose their assets to the government. There could be many other property owners who don’t know about the Bulgarian legal process and who could potentially risk losing their properties,’ said John Howe, managing partner at the firm.
Until recently it was common practice for foreigners to register a Bulgarian company in order to buy property as they were not able to buy land or property with land in their own name. But in order to comply with European Union legislation the Bulgarian government required all companies to be re-registered by 31 December 2011 and many foreign people may not have been aware of this.
Companies which failed to do so can no longer re-register, their trade activities are permanently ceased and they cannot trade or dispose of their assets.
When new EU laws come into effect in Bulgaria this October, anyone who failed to re-register their company faces the prospect of a large bill and losing the assets of their Bulgarian company to the state, including any property.
As one of only a handful of firms nationwide recommended by the Law Society for matters relating to the purchase of properties and apartments in Bulgaria, John Howe and his team have come up with a solution to this latest legal challenge for British owners of Bulgarian properties.
‘Our specialist team of property lawyers have done a lot of work investigating the issues surrounding the re-registering of Bulgarian properties and believe they have found a solution whereby individuals can liquidate the company and transfer all the assets to a group of shareholders,’ Howe said.
‘The ultimate result is that the property remains in the hands of the original purchaser and isn’t lost to the state,’ he added.
John Howe & Co has represented investors in Bulgaria and assisted them in the negotiation and purchase of properties in the region. The company has also acted for a large developer in the purchase of land and the subsequent development and sale of apartments.
One of the most appealing features of buying a property in Bulgaria is the value for money. Although rising, property prices are incredibly cheap. An average villa close to the sea can be purchased for around £30,000 with rural properties being offered for as little as £5,000.
Attorneys have been able to work out a solution for British property owners who have failed to re-register their company before the time limit. It involves liquidating the company and transferring all assets to shareholders, which means that any property will not be forfeited to the state. While a solution was found in this case, it would have been much simpler for foreigners owning property in Bulgaria to simply re-register their company before the end of 2011 and avoid all of this hassle.