Many UK nationals have purchased in Bulgaria an apartment, a house with land or simply a piece of land in the mountains or near the seaside to build on it or just as an investment. Such properties have been acquired either personally by the investors or through an investor´s owned Bulgarian entity that represented a vehicle to overcome the legal restrictions applicable at that time for the acquisition of land in Bulgaria.
Upon joining the European union (EU) Bulgaria has negotiated transitional periods for the acquisition of land and property by citizens of the other member states of the European Union:
1. The transitional period for the acquisition in Bulgaria of ownership of land for a second home by nationals and legal entities of either the EU or the European Economic Area (EEA) member states in the context of the Chapter on the free movement of capital according to the Accession Treaty of Bulgaria (OJ L 157/278 from 21.06.2005) has expired on 31.12.2011.
2. Furtheron, the transitional period for the acquisition of agricultural and forestry land by EU and EEA nationals and by by EU and EEA companies, that has been determined for 7 years as of the date of accession, has also expired on 31.12.2013.
With the exception of the below stated specific regulations related to agricultural land currently no other limitations apply for the acquisition of property by nationals of either the EU or EEA member states in Bulgaria.
According to Article 3c (Bulgarian "3в") of the Law on the Ownership and Use of Agricultural Land agricultural land can be acquired only by natural and legal persons residing in Bulgaria for more than 5 years or for such persons that have taken up permanent residence in Bulgaria. The legal entities that have a registration under Bulgarian law since less than 5 years cannot acquire ownership of agricultural land unless their shareholders meet the above conditions.
Furthermore, under Article 3 paragraph 7 item 3 of the above mentioned Law corporations that have issued only bearer shares, are legally not entitled to acquire ownership of agricultural land. Another restriction relates to companies with shareholders registered in jurisdictions with preferential tax regimes (Article 3 para7 item 1).
The above restrictions related to agricultural land apply to both EU and EEA nationals and to nationals of third countries. They even apply on Bulgarian nationals.
According to the applicable Bulgarian law the third-country nationals may only acquire ownership on land as legal heirs or under the conditions of an international agreement that is ratified in compliance with Article 22 paragraph 2 of the Bulgarian Constitution, respectively published and entered into force (Article 29 paragraph 1 of the Bulgarian Property Act). As far as no agreement exists between Bulgaria and the respective third country the acquisition by its nationals or companies of any kind of land in Bulgaria is prohibited.
The acquisition of limited property rights, such as easements, building or infrastructure rights, is however freely available for third country nationals. Notwithstanding the above, the special rule of Article 3c of the Law on the Ownership and Use of Agricultural Land will apply for third-country nationals owning agricultural land. And in particular, if a third country national acquires in his capacity of legal heir agricultural land in Bulgaria, he or she is obligated to transfer such land within 3 years of acquisition to a person eligible to own agricultural land in Bulgaria.
Assuming the above, once the Brexit decision is implemented, UK citizens will most probably receive the same legal treatment like the third-country nationals provided that no measures shall be taken to enable a more preferential treatment through the adoption of the respective legal provisions on a national or on an European level. Therefore, the legal consequences for each individual property of British nationals or companies in Bulgaria depend on the property characteristics and on the conditions under which the property has been acquired or developed. The history and the status of such properties have to be analyzed according to the related documentation and pursuant to the applicable Bulgarian law.
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