Botanical Gardens in Sofia Bulgaria

C

cd31

Guest
I was wondering if anyone has bought in the Botanical Gardens Development in Sofia.

I have received a pre-contract for an apt in the above development, and it indicates that payments are to be made to a company registered in Hong Kong the intent being in order to avoid Bulgarian vat @ 20%. Has anyone else had experience of this kind of thing in Bulgaria, it seems very dodgy to me
 
I've no experience of this, but it sounds very dodgy. I'd stay well clear of it. Why don't you post more details? Who's the agent in Ireland?

I assume you're aware of the development last year in Bulgaria involving the Dutch company?
 
If this is a tax evasion ploy (and I am not in any way saying or implying that it is), and if you actively collude in it in the manner you describe, you will not have a leg to stand on legally if the deal later goes sour for whatever reason. In contract law, a contract involving any element of illegality is generally unenforceable.
 
Hi ;
I am also buying in Botanical Gardens & have received the same pre contract. I intend to call th eagent ask him about this !
 
Unregistered said:
Hi ;
I am also buying in Botanical Gardens & have received the same pre contract. I intend to call th eagent ask him about this !
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Believe nothing the agent tells you. His only interest is his commission. Get independent advice.
 
All, to update on the status of this, upon investigation this payment is indeed designed to reduce the developer's VAT and corporate tax liability, the comment from the lawyer I spoke to was: 'the scheme is legal so long as it does not come to the attention of the bulgarian tax authorities'. Which I take to mean it is not 100% legal. Having spoken to a couple of agents at Sunday Business Post Expo yesterday, this practice is common in Bulgaria, also the practice of understating the actual value of the property on the deeds is commonplace, however just because they are commonplace does not necessarily make them legal

I asked the sales agent to change the contract to eliminate the vat avoidance and to note the true value on the deeds. He has refused and is now also refusing to refund my booking deposit, since he claims everything is above board and the contract does not need to be changed.

Any advice on how I can force the sales agent to return my deposit ?
 
In terms of independent advice I also spoke to tax consultant with KPMG Bulgaria who also confirmed that the legallity of the scheme hinges on the tax authorities remaining unaware of it
 
Guest, If you could let me know what response you get from the agent, I would be very interested. I have also posted about this on another forum, and there is at least one other person in the same situation:

[broken link removed]

The sales agent has told me he has sold 300 properties this way, I'm sure a few of these customers read these forums, please let me know your views if you have
 
cd31 said:
I asked the sales agent to change the contract to eliminate the vat avoidance and to note the true value on the deeds. He has refused and is now also refusing to refund my booking deposit, since he claims everything is above board and the contract does not need to be changed.

Any advice on how I can force the sales agent to return my deposit ?
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Is the agent based in Ireland? Is he/she a member of any professional association?
 
he is based in Ireland, I am not aware of any professional memberships he or his company may hold, I have never seen any reference to any on their documentation or website
 
Is he an accountant? Or a solicitor? Does he have an estate agency that sells Irish property?
 
he is a solictor actually, or at least he has LLB after his name on his bio, this is some kind of solicitor qualification isn't it ?
 
LLB denotes a Bachelor of Laws degree, usually from a university or college. It does not denote a professional qualification.

No professional body in this country would tolerate a member openly promoting a tax dodge of this nature.
 
I am also buying in this development & posted the note about contacting the agent in cork earlier. I have had difficulty speaking to anyone in authority in that company, was just on to the secretary who offered to answer all my questions. My other concerns are
1. Is the solicitor reccomended by the agent entirely independant of the other parties, ie can he offer independent impartial advice to me.
2. Prelim contract states that the builders liability is limited to 2%, in my case the purchase price is 90K so 2% wouldnt even cover my cost if I had to make a trip to deal with any problems. I would need to have this clause removed.
3. The 1st stage payment is subject to contract, a contract I haven't seen. I also asked was this refundable but somehow dont think it is.
4. Did not get a quote for fees from reccomended solicitor.
5. Issue of payment to Hongkong company
6. Issue of vat.

These are some thoughts as I think outloud & wanted to share them with you. I would to still go ahead with the purchase providing eerything is ok. I intend to call the solicitor in bulgaria later today & ask him some of these questions. Have you spoken to the solicitor or do you have anything further to add ?
 
p.s.
I contacted the Law society to see if they have any Irish registered solicitors practising in Bulgaria but they didnt have any registered, If anyone knows or could reccomend one let me know !
 
Hi Ubiqoutous, to be clear I've never said this was a tax dodge, my gripe was that I was not informed about the payment scheme prior to paying my deposit.

The agent has agreed to refund my deposit, to anybody else out there looking at this development, make sure to get a independent opinion, from talking to the various developers I spoke with @ the SBP Expo there's a broad spectrum of opinion about what is or is not ok to do in Bulgaria, and the one thing I've realised is I'm not qualified or have the experince of property investement to give a definitive opinion on this, so I'm just going to err on the side of caution and stay away from schemes like this.

Maybe I'll be kicking myself years down the road, who knows. Thanks to everyone here for the information and feedback provided.
 
CD31
Can you let us all know what steps / what line you took with agent in cork to get the deposit back, just in case I need to do the same !
 
I outlined why I felt I had not been fully informed about the nature of the transaction, and initially agent refused to return deposit even when I did this, but I kept ringing and e-mailing, until the point where agent refused to take my calls, then today I received an e-mail from agent saying that they were refunding the deposit, don't know what exactly changed their minds.
 
Hi there --I noticed with interest the discussion on the Boyana property in BG.
While I have no wish to speak about the Boyana development, as I know nothing about it, I would like just to say to people about the practices in Bulgaria ( and other countries) in relation to ''taxable price'' - Notary price and the price on the contract.
First of all, this should have been explained to you at the start so you could make a valued decision. I would be very surprised if the agent did not do this.
You should have full trace of your funds -- you have contract that is signed and stamped by developer and signed by you; you have bank transfer receipts and you should have receipts for each payment from developer along the way. The question of lowballing the value on the Notary only really comes when you sell and you have to pay higher CGT. This is not a problem in BG as GCT is not applicable if you keep the property for longer than 5 years.
Don't be too hard on the agent in terms of not being a member of an Association. There are very few associations an independent agent can join if he is not a MIAVI ( in Ireland) member. All agents can do is try to be as careful as possible in the developers we pick and do full due dilligance on the developer.
I can understand the agent refusing ( it is not him,it is the developer) to allow clients pay the VAT and get the fullprice noted. Basically, if you do that for 1 client then you must get all clients to agree to do it.
DOn't mean to protect the particular agent but we come across this every day of the week and as long as you are well informed then that is the main thing.
We have 3 independent lawyers in BG working for our clients. I have no problem in recommending anyone of the three of them.
Feel free to write me directly -- I get nothing out of this- just hate to see BG potentially damaged again -.
Actually, if anyone wants a bit of free advice feel free to come along early in *** at the weekend to the ***and I'll give u the benefit of my experience in the market. If people think this is a plug then you don't know our company
*** **** -- stand *** ( upstairs) in *** come along early --10.00AM as otherwise I'll probably be too busy to chat to u.




-----blatant advert deleted----
 
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cd31 said:
The agent has agreed to refund my deposit, to anybody else out there looking at this development, make sure to get a independent opinion, from talking to the various developers I spoke with @ the SBP Expo .
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Don't expect to get 'independent opinion' regardless of how many people you talk to at a property expo. They are ALL trying to sell you property, not give you independent advice.
 
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