The withdrawal of the United Kingdom (UK) from the European Union (EU) has had an impact on the regime and the possibility of British nationals to acquire ownership of property in Bulgaria.
With the expiration of the transitional period under the EU-UK Withdrawal Agreement on 31.12.2020, British nationals and legal entities will no longer enjoy the rights provided for citizens or companies from Member States or from European Economic Area (EEA) countries. They will be considered as a third country regarding both EU and Bulgaria.
As 01.01.2021, a constitutional prohibition (Art. 22 of the Constitution of the Republic of Bulgaria) on the acquisition of ownership over land by citizens and legal entities from the United Kingdom has been introduced. According to the legal framework, an exception to this prohibition may only be made by means of a ratified international treaty, and with regards to natural persons – by virtue of inheritance by law. The EU-UK Trade and Cooperation Agreement, which is to be ratified by the European Parliament, is precisely such an international treaty. The Agreement, the so-called Trade Deal regulates the investment liberalisation and access to markets and services in certain areas. Nevertheless, the agreed texts contain a specific reservation1 concerning the acquisition of properties in Bulgaria by British nationals, according to which the prohibition on the acquisition of land in the Republic of Bulgaria will apply to individuals and legal entities from the United Kingdom.
According to the reservations set out in the Trade Deal legal persons and natural persons from the UK (who are already considered foreign ones) may acquire limited real estate property rights (right to use, right to build, right to raise a superstructure and servitudes), as well as ownership over buildings only. These persons may not acquire agricultural land.
British nationals and legal persons in which foreign participation ensures a majority in adopting decisions or blocks the adoption of decisions, may acquire real estate property rights in specific geographic regions designated by the Council of Ministers subject to permission.
Registering a legal entity in Bulgaria is the only possible way for a British national to purchase land on the territory of Bulgaria. However, this option may only be applied in urban territories. Bulgarian legal entity which is wholly owned by foreign persons or in which foreign participation ensures a majority in adopting decisions or blocks the adoption of decisions, may not acquire agricultural land. In the simplest case – a Bulgarian commercial company owned by British nationals may acquire apartments, studios, and commercial establishments, as well as houses and the land thereto, where the latter falls within an urban area.
Despite the general prohibition on the acquisition of agricultural land, the Bulgarian legislation provides for certain exceptions where agricultural land may be acquired by foreign natural persons and legal entities:
for natural and legal entities, provided that they have resided or have been settled in Bulgaria for more than 5 years;
for legal entities registered under the Bulgarian legislation, provided that their founders, partners, respectively their members, have resided or have been settled in Bulgaria for more than 5 years.
With regard to British nationals who already own real estate – property or land in Bulgaria, nothing will change, and they will retain ownership.
You can contact our experts in real estate Boyana Milcheva and Alexander Todorov for more details regarding acquisition of property in Bulgaria.