How the "cheap" property deal can lead us dear


The buyer should be interested in entering the actual price of the business to protect against future risks.

Transferring the property into a tax assessment, without the contracts being the actual price paid, is a vicious practice of almost 28 years. There is no such simulation in Europe at cost. In our country, it is spreading with the silent blessing of the state and, over the years, it becomes massive.

The tax assessment agreement often saves people a few thousand dollars, but there is a risk that they will be salty – they lose much more money or fall under the Penal Code.

At the dawn of democracy, 95 of the 100 negotiations in Bulgaria were made in this way, but in recent years there has been a shift, especially in sales of houses between individuals such as notaries and lawyers. One reason is that as of July 2011, it is now necessary for property buyers and sellers to declare that the property price is actually agreed upon and that such a statement is part of the contents of the public deed.

Not declaring is a criminal responsibility. Perhaps

reach the court

for documentary


or tax fraud, but in practice this is hardly happening.

Notaries say 90% of the deals are being made at a real price, as people realize that the reduction is dangerous and irrational. The other reason is that in announcing the actual price, the seller proves the source of their income. However, according to lawyers, the price scheme still prevails and applies in 60-70% of cases.

Why is it preferable? When buying or selling a home or other property, taxes and fees are due. The cost of the fees is generally borne by the buyer or by the parties to the transaction, unless otherwise agreed. The local tax is an obligation of the buyer, who must declare the acquisition. This is the most serious cost item in the business.

The local tax is determined by the municipal councils every year but in some places is not changed from 5-10 years For Sofia is 2.5% of the price of property, in Burgas is 3% in Plovdiv is as in Sofia – 2.5%.

The fees due for the transaction are the same for the entire country and are charged according to the sale price of the property or the tax assessment (if the sale price is less than the tax assessment).

Notary fees are calculated on a scale specified at a special rate to the Notaries Act, depending on the price range of the property. Usually, the notary fee is about 0.4 – 0.6% of the asking price. A state fee of 0.1% is also paid to enter the Property Registry.

Total transfer costs can be 3 to 3.5% of the cost of ownership. In order to reduce some of them, people agree to enter the tax assessment in the notarial act. Thus, the most massive deals save between 2 and 3 thousand pounds, and in the future, the buyer pays a lower garbage rate and a construction tax.

The other reason the buyer chooses to transfer a property to a tax assessment is that he does not declare part of his income and will not have to prove his origin in a sudden audit or tax investigation of CPONPI. The inspected person must prove that the funds come from legal revenue and are outside the minimum subsistence provision (calculated on a special tax formula).

Unofficially, in legal circles, it is stated that the arrangements for introducing a tax assessment price in the notarial act are made between buyers and sellers with the assistance of brokers. If a problem arises, for example, the heir of the property appears and requires the cancellation of the deal, or the buyer is removed from the property by court order, there is a serious risk of the buyer returning the property and receiving only the money in the deed, but not actually paid for the property.

In practice, it is very difficult in court, and according to lawyers and almost impossible to prove the price actually agreed and paid. Even if you withdraw a document (contract) with a stated sale price, the buyer runs the risk of falling under art. 313 of the Penal Code for ideological falsehood and that fear can be used by someone.

There is also a risk to the seller – the buyer can only pay by bank transfer the price stated in the notary's office and then do not give up the surcharge. That's why lawyers usually advise their clients to deliver them in advance.

Notaries authenticate the contents and signatures in the notarial act based on original documents prepared by the State administration. Check for errors – technical or intentional. They have no obligation to certify payment, but only the right of ownership. In practice, it is sufficient to only be presented with a payment order.

"The notary is not witnessing the motives of the agreement itself, his most important job is to check the property and make sure the seller owns the property.There are dozens of questions about the authenticity of the documents (ID cards, for example ), about the current civil and family status, about heirs, etc., explains Dimitar Tanev, who for many years was president of the House of Notaries.

Notaries with proven professional experience advise

payments to be made

do it entirely

by Bank transfer

They are allowed in cash up to 10,000 leva, but do not recommend them.

Until recently, the risks associated with entering a price under a tax assessment under the actual transaction were avoided by negotiating a large fine at the end of the sales contract to cover the amount actually paid. "The practice of the court lately has been to respect penalties of 10 to 20 percent but not penalties of 50 to 100 percent because they are treated as excessive," warns a civil law lawyer. The reason is art. 26 of the Law on Obligations and Contracts. According to him, contracts that contradict the law or ignore it, as well as contracts that violate good morals, are insignificant.

According to notaries, real estate transactions may come to light and the practice of doing business in tax assessment for whether a complete record and property records are created. In addition to the price and characteristics of a house, for example, neighborhood neighbors with squares and prices will be included in them. This information can be used by experts to make a real estimate of the market price of the property, according to the notary Tanev. Because the offers on the websites and real estate agencies are not a market price, the market prices are considered the prices recorded in the notarial acts.

Most EU countries describe when the building was built and how it has changed over the years. The business is completed with the active participation of the municipality and the banks. In Bulgaria, as regards the tax assessment system, the State keeps the door open for low incomes. However, the rich also benefit from this gap.


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