---
title: "Negotiating a Discount When Buying Property – Pitfalls to Avoid"
description: "Buying property at a discount in Bulgaria in 2026? The legal risks of negotiating a lower price and how to protect your transaction."
url: "https://www.da-law.eu/en/insights/negotiating-a-discount-when-buying-property"
lang: en
author: "Desislava Arsenova"
published: 2026-08-02
category: "Real Estate"
---

# Negotiating a Discount When Buying Property – Pitfalls to Avoid

Author: Desislava Arsenova · Published: 2 August 2026

*Buying property at a discount in 2026? The legal risks of negotiating a lower price and how to protect your transaction.*

## Key points

- The local tax and the notary fee are calculated on the higher of the agreed price and the tax assessment, so a discount does not automatically reduce costs.
- The final agreed price must be recorded in the preliminary contract. Oral agreements and emails are not sufficient protection.
- An amount paid operates as earnest money under Art. 93 of the Obligations and Contracts Act only if it has been expressly agreed as such. Otherwise it is an ordinary advance.
- An unusually large discount is a reason to check the Property Register for encumbrances on the property.

Negotiating a price below the asking price does not automatically reduce your transaction costs, because the local tax and the notary fee are calculated on the higher of the agreed price and the tax assessment of the property. To be protected, the discount must be expressly recorded in the preliminary contract with an exact final price, any deposit paid must be clearly agreed as an earnest money deposit, and an unusually large discount merits an additional check for encumbrances on the property.

The Bulgarian property market is entering a new, more nuanced phase. According to the [National Statistical Institute](https://www.nsi.bg/statistical-data/99), house prices continued to rise by 6.2% quarter on quarter and by nearly 14.8% year on year in the first quarter of 2026, but the number of completed transactions has fallen noticeably compared with the previous year. Industry representatives point out that the price expectations of a considerable number of sellers lag about six months behind market reality, and many asking prices still include a negotiating buffer of around 10–15%, inherited from the hotter phase of the market. The resulting gap between asking and realistic value is leading more and more buyers to negotiate actively, and a considerable share of this year's transactions are concluded at a discount to the original asking price.

At the same time, the share of transactions financed by mortgage is growing, with more than seven in ten transactions in Sofia now going through a bank, compared with a considerably lower share a year ago. The combination of more active price negotiation and greater reliance on bank financing means more steps in the transaction process and, accordingly, more points at which details may be left unclear.

For the buyer, a discount in itself sounds entirely positive. In practice, however, negotiating a lower price involves several legal details that are rarely discussed during viewings and conversations with the estate agent, yet can have a significant bearing on the final outcome of the transaction.

## The Tax Base Does Not Automatically Follow the Agreed Price

Many buyers expect a lower agreed price to reduce all transaction costs proportionally. This does not hold, however, for the local tax and the notary fee, two of the main items in the transaction budget.

Under the [Local Taxes and Fees Act](https://lex.bg/laws/ldoc/2134174720), the tax base for the tax on the acquisition of real property for consideration is **the higher of the price agreed in the notarial deed and the tax assessment of the property** (Art. 46). The rate is set independently by each municipal council within a range of **0.1% to 3%**, and in Sofia, Varna, Plovdiv and Burgas it is currently 3%.

The same principle applies to the notary fee. It is calculated on the so-called material interest of the transaction, which under the [Notaries and Notarial Activity Act](https://lex.bg/bg/laws/ldoc/2133897733) (Art. 96(1)(1) and § 2 of the Additional Provisions) is again the higher of the agreed price and the tax assessment of the property.

For example, if you negotiate a EUR 15,000 discount from the seller, say from EUR 220,000 to EUR 205,000, but the tax assessment of the property is EUR 215,000, the local tax and the notary fee will still be calculated on EUR 215,000, not on the agreed EUR 205,000. At a rate of 3%, this makes a difference of EUR 300 in the local tax alone, and the notary fee and the registration fee (0.1% of the same base) also increase. In practice, these amounts eat into the discount achieved, without the buyer having budgeted for them.

The tax assessment is issued by the municipality in which the property is located, upon application and payment of a small administrative fee, and notaries usually require it to be current at the date of the transaction. It is therefore good practice to obtain it early in the negotiations rather than at the last moment before the notary, so that the real final cost is known before the agreed price is finalised.

## The Discount Must Be Set Out in Writing in the Preliminary Contract

An oral agreement on a lower price, an exchange of messages with the seller or the agent, or even an email confirming the discount, do not in themselves carry sufficient legal weight to bind the final transaction.

Under Art. 19 of the [Obligations and Contracts Act](https://lex.bg/laws/ldoc/2121934337), a preliminary contract for the sale of real property must contain the parties, the subject matter and the **price**, as these are the three essential elements of the future transaction. If these elements are missing or unclearly worded, the preliminary contract is void and gives no right to demand completion of the final transaction at the agreed, lower price.

In practice, this means that any discount agreed during negotiations, whether it results from the condition of the property, the seller's urgency or simply the gap between asking and realistic market value, must be expressly recorded in the preliminary contract with an exact final amount. Wording such as “at the price agreed by email”, or reliance on an oral agreement, is not sufficient protection. If the seller later demands completion at the original, higher asking price, the buyer will have to prove the discount by other means, which is considerably more difficult and uncertain than simply having it recorded correctly from the outset.

A well-drafted preliminary contract also provides a guarantee in the other direction. If one party refuses to appear before the notary to complete the final transaction at the price already agreed, the other party may bring a claim under Art. 19(3) of the Obligations and Contracts Act for the preliminary contract to be declared final. If the claim succeeds, the transaction is deemed concluded when the judgment becomes final, but only if the preliminary contract is clear and complete as to its essential elements, including the agreed price rather than the original asking price. The accuracy of the amount recorded therefore matters not only when all goes well but also as protection in the event of a dispute.

## Earnest Money and Deposits in Price Negotiations

This is one of the less well-known subtleties of discounted transactions. In everyday language, “deposit” is used for any amount paid before the final transaction is concluded, but the law uses the term **earnest money** (Art. 93 of the Obligations and Contracts Act), which has a specific legal function.

- If the **buyer** (who gave the earnest money) withdraws from the transaction, the seller may keep the amount paid.
- If the **seller** (who received the earnest money) withdraws, the buyer may claim **double** the earnest money.

The problem is that this strict consequence applies only if the amount paid has actually been agreed as earnest money, with an express clause giving it a security and compensatory function. If the preliminary contract merely mentions an amount paid without such a clause, case law treats it as an ordinary advance on the price rather than as earnest money. An ordinary advance must be returned if the transaction falls through (otherwise it would amount to unjust enrichment), but without the penalty consequences of Art. 93 for either party.

This has a direct bearing on transactions involving lengthy price negotiations. If you have paid an amount before the final, negotiated price has been settled, it is important to clarify expressly and in writing whether that amount serves as earnest money, and in relation to the price already agreed rather than the original asking price. Otherwise, in a dispute, it is unclear what protection you actually have.

## A Large Discount as a Signal for Closer Scrutiny

A discount in itself is no cause for concern. Most of the reductions negotiated this year remain within reasonable limits and usually reflect normal negotiation rather than a problem with the property. A significantly larger discount than usual does, however, merit additional attention, because it sometimes signals a reason other than the general cooling of the market, such as financial pressure on the seller, the need for a quick sale, a pending dispute between co-owners or an encumbrance on the property of which the buyer has not yet been informed.

Before signing the preliminary contract, it is advisable to check the Property Register at the Registry Agency for registered encumbrances, such as mortgages, attachments or statements of claim, in the file of the property and of the seller. The search can be made by address, property identifier or owner, and reveals whether the property is subject to security in favour of a bank or other creditor, whether there is a pending court dispute, whether a long-term lease has been registered, or whether there are other circumstances not visible at an ordinary viewing. Many buyers underestimate this step precisely because they are focused on the lower price achieved rather than on the legal status of the property, yet it is often exactly what reveals why the seller is willing to grant a substantial discount.

In transactions financed by a mortgage, it is also worth knowing that the bank carries out its own independent valuation of the property, which does not always match either the asking price or the discounted price. A discrepancy between the bank's valuation and the agreed price is not a legal problem in itself, but it may affect the approved loan amount and the buyer's own contribution. The figures in the transaction should therefore be clarified in detail before any deposit or earnest money is committed.

## Practical Conclusions

When negotiating a discount on a property purchase, bear the following in mind.

- Check the current tax assessment of the property before assuming that a lower price automatically reduces all transaction costs.
- Insist that the final, negotiated price be expressly recorded in the preliminary contract instead of relying on oral agreements, messages or email correspondence.
- Clarify in writing whether any amount paid serves as earnest money under Art. 93 of the Obligations and Contracts Act, especially if payment precedes the finalisation of the discount.
- In the case of an unusually large discount, check the Property Register for encumbrances on the property before committing funds.

Every [real estate](https://www.da-law.eu/en/services/real-estate) transaction is individual, and the consequences of a single overlooked detail in the preliminary contract can in practice cost more than the discount itself.

## Legal basis

- [Local Taxes and Fees Act (Закон за местните данъци и такси): Art. 46](https://lex.bg/laws/ldoc/2134174720)
- [Notaries and Notarial Activity Act (Закон за нотариусите и нотариалната дейност): Art. 96(1)(1) and § 2 of the Additional Provisions](https://lex.bg/bg/laws/ldoc/2133897733)
- [Obligations and Contracts Act (Закон за задълженията и договорите): Art. 19 and 93](https://lex.bg/laws/ldoc/2121934337)

## Frequently asked questions

### Does a discount reduce the local tax on a property purchase?

Not always. The tax is calculated on the higher of the agreed price and the tax assessment of the property (Art. 46 of the Local Taxes and Fees Act). If the assessment is higher than the agreed price, the tax and the notary fee are calculated on the assessment.

### What must a preliminary contract contain?

The parties, the subject matter and the price (Art. 19 of the Obligations and Contracts Act). The price agreed after negotiation must be recorded as an exact amount. Otherwise, in a dispute it is difficult to prove the discount, and if the essential elements are unclear the contract may be void.

### What is the difference between a deposit and earnest money?

Earnest money under Art. 93 of the Obligations and Contracts Act is kept by the seller if the buyer withdraws and returned in double if the seller withdraws. This applies only if the amount has been expressly agreed as earnest money. Otherwise, case law treats it as an advance, which is returned without penalties if the transaction falls through.

### What should I check if the discount is unusually large?

Search the Property Register for mortgages, attachments, statements of claim or long-term leases registered in the file of the property or the seller before paying any earnest money.

---

*The information on this website is not legal advice and does not create an attorney–client relationship. Every case has its specifics and requires an individual approach. For a professional opinion and a tailored strategy, please contact us.*

Source: https://www.da-law.eu/en/insights/negotiating-a-discount-when-buying-property