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The property market in Bulgaria
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Bulgarian real estate sector is currently very buoyant – there is no shortage of eager investors, and those keen to act as sales agents The market reached incredible heights in 2004, boosted by foreigner interest and by the increased purchasing power of Bulgarians thanks to the increased availability of mortgage loans. Hundreds of sales agencies have sprung up, not just in the big cities but in the resorts too. Many are being run on a shoestring - they just have a website and exclusively target foreign buyers (mostly British and Irish) who are keen to invest in cheap Bulgarian property. These buyers generally intend to use the property themselves as a holiday home but are also confident that their money will appreciate faster than if it were sitting in a bank at home. The expectation that Bulgarian real estate will continue to rise up to the country’s EU entry in January 2007 keeps the market buoyant
Despite an average rise of 35% last year (this figures changes depending which survey you read!), prices are still relatively low by EU standards, though Sofia is looking less of an investment these days, with so much new construction going on and rental demand fairly low. Its not just foreign interest that has bumped up real estate prices – as the Bulgarian economy becomes stronger so people have the disposable income to buy property and the mortgage boom over last couple of years has meant that even those without savings can buy a first or second home.
Other boom areas are the Black Sea, especially the southern stretch (which has begun to resemble the Costa Del Sol with its concrete developments) and the ski town of Bansko.
There are of course many other opportunities outside of these hotspots – there are other large ski resorts, and quite a potential for the development of new ski resorts in those places where there are currently only one or two pistes.
Bulgaria is fortunate – virtually the whole country is picturesque and unspoilt. However, location and proximity to cities, airports, etc. is of importance if you are looking for regular rental income.
Peculiarities you need to be aware of
Foreign individuals cannot own land in Bulgaria and despite the country’s imminent EU membership in 2007, will not be able to do so until 2014. A legal loophole currently allows foreigners to set up a Bulgarian company, which can then buy the land. This bureaucratic loophole means that you need to use a local lawyer to set up the company and buy the land. You will also have to retain their services on a permanent basis to maintain the company for you. In addition ou will also need to use an accountant to submit annual tax returns, since the land is considered an investment. The good news is that although you have to pay the initial capital (5,000 levs or 75% thereof) into a bank account, you can subsequently withdraw it once the registration process is over. If you are buying an apartment and there is no land included in the deal then you can buy it outright as an individual.
The legal fees are usually quoted as a total for the court fees and the lawyer’s fee for handling you. They can range from 400 – 1000 euro.
Another factor is getting permission to stay in Bulgaria. Cases are decided individually at present but citizens of EU countries have the right to stay in Bulgaria for 3 months out of every 6, while those of Great Britain and Ireland can only stay for 1 month out of 6. This is a tit-for-tat regulation and will fall by the wayside when Bulgaria joins the EU on January 1st 2007. In the meantime, if you are retiring to your property in Bulgaria you will probably get residency as long as you can provide the documents to prove you are genuinely retired, that you receive an income outside the country. If you are a freelancer of any kind you will probably not get residency. In many cases, however, depending on the value of your investment (in property) you may be granted residence - choose a lawyer with a proven track record in this area.
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Investment Opportunity
There has never been a better time to invest in Bulgaria. The economi... more
Why Bulgaria?
Bulgaria is the fastest growing holiday and property investment destin... more
About Bulgaria
For tourists and property investors alike, Bulgaria truly has it all. ... more
General information
The Republic of Bulgaria covers 110,910sq km and has a population of 7... more
Airports
Sofia Airport
Sofia airport is just 5km east of the ... more
Climate
Bulgaria is blessed with an almost perfect climate. Summers are typica... more
Culture and Traditions
As you’d expect of a country with such a long a chequered history Bulg... more
History
Bulgaria has a long, turbulent and fascinating history. It has been i... more
Bulgaria’s entry into the EU
On the 25th of April 2005 Bulgaria signed the accession treaty that wi... more
Economy
How favourable is it for foreign investors?
The Bulg... more
Government
Bulgaria is a stable Parliamentary Republic. The constitution was rat... more
Useful Tips
Body language
It’s confusing - you need to understand that... more
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