Property Buyers in Bulgaria Warned of False Price in Deeds

Business | May 1, 2006, Monday // 00:00| Views: | Comments: 0

The experience of hundreds of overseas buyers looking to purchase property in Bulgaria shows it is common to put a lower price in the deeds to save money, experts say and warn this is risky.

"Putting a lower price in the deeds during the last stage of the conveyancing process in Bulgaria is generally done because the vendor wishes to avoid taxes and fees which are due on final signing and which depend upon the property price which is declared in the deeds," says Chris Goodall, Managing Director of Quest Bulgaria magazine.

"The higher the value of the property, the higher the taxes and charges. But by declaring a lower price in the deeds than that which is actually being paid is an evasion of Bulgarian law and creates an ‘invalid' or ‘fake' deal and can lead to serious consequences.

From a civil law point of view this kind of "fake" deal would be considered null and void. If the client is found guilty of having been party to such a deal he could be charged with a fine of up to 1,000 pounds and even imprisonment of up to three years.

The practice proves to be common with Bulgarian constructors as well who are trying to avoid VAT which has to be paid on new build or off plan sales. They offer the potential of putting in a low and false price in order that they do not pay all or any of the VAT due.

Experts advise potential buyers to get an independent lawyer to act in their interests.
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