About
Bulgaria
Bulgaria is a beautiful country with panoramic
scenery and clean, sandy beaches. It is a country
of contrasts with ski resorts and spa centres,
next to medieval towns and villages with cobble
stone streets. Scattered across the country,
are numerous monasteries dating back to Byzantine
times.
Over a quarter of the country is covered by
natural forests and there are several National
Parks providing habitat for wildlife. The Black
Sea coast, 354 km of coastline, includes several
beaches awarded Blue Flag status.
Bulgaria enjoys a temperate climate with distinct
seasons. Summers are mostly hot and dry while
winters are cold with snow in mountainous areas.
The Black Sea moderates temperatures in the
east of the country, with more than 300 hours
of sunshine per year.
Bulgarian tourism has enjoyed a healthy increase
over the last few years, encouraged by the low
cost of living and improvements in the country’s
infrastructure.
After years under communist rule, Bulgaria now
enjoys a democratic government with political
and economic stability. Bulgaria is expected
to join the European Union in 2007.
Several international airlines fly to Sofia.
Bulgaria Airlines operate domestic services
connecting Sofia to Varna, Bourgas and other
cities. Scheduled, as well as charter, flights
arrive directly to Varna, Bourgas and to Plovdiv
(near Pamporovo), throughout the summer season.
Living in Bulgaria
The Bulgarian currency is called Lev. One Lev
divides into 100 stotinki (cents). The Euro
is extensively used in pricing, alongside the
Lev, and the Lev value is set against the euro.
Foreign currency can be exchanged at airports,
banks, exchange bureaux and some hotels.
The official language is Bulgarian which is
written in Cyrillic. English are spoken in most
tourist areas.
Banks are usually open Monday to Friday, from
9am to 4pm. Foreigners need to have their passport
when exchanging currency or cashing cheques.
There are also ATM machines in most hotels and
in other public places. The main international
credit cards are accepted in most places in
towns and resorts.
Travel within Bulgaria is covered by a good
network of buses and rail. Roads linking major
towns are quite good, elsewhere they very. In
Bulgaria traffic travels on the right. In urban
areas, except buses, one can travel by taxi
(inexpensive for western standards). In Sofia,
there is also a metro network and trolley-buses.
The cost of living in Bulgaria is quite low,
as is the labour cost, compared to other European
countries. This is one of the reasons that the
country is attracting a large number of investors
and retirees as income earned abroad goes a
long way in Bulgaria.
Real estate in Bulgaria
Bulgaria has seen an unprecedented growth in
the property market, during the last few years
and expectation is that it will continue to
do so, as the country prepares to join the EU.
The possibility that Bulgaria will host the
2014 winter Olympics, and the country’s increasing
popularity as a holiday destination – both for
its coastal and skiing resorts - are also factors
that underline Bulgaria’ s popularity with investors.
The most popular areas are:
• The Black Sea coast (Varna, Burgas, Sunny
Beach, Nessebar, Pomerie, Golden Sands, Albena,
Elenite, St Konstantin, Primorsko).
• The areas around established ski resorts (Bansko,
Borovets, Pamporovo)
• The capital of the country, Sofia which is
increasingly becoming a sound proposition, for
investors seeking rental income as well as capital
growth, as it can support long term rentals.
In contrast, properties in the coastal resorts
rely on the seasonal tourist trade.
Property Ownership by foreign buyers
Non-Bulgarian citizens are not (yet) allowed
to purchase land. However, they can form a Bulgarian
company, which is legally allowed to own land,
and buy through the company.
Apart from the above difference, procedures
of real estate transactions in Bulgaria are
similar to those in other continental European
countries. The costs associated with property
transactions are, however, lower.
Property transfers are overseen by a Notary
Public, who is representing the government and
is independent form both buyer and seller.
Mortgages
Finance on property purchases in Bulgaria is
available. Small investors are better off raising
the money in their own country and buying the
property as cash buyers. Large scale investors
can borrow from local financial institutions
to develop on land they have already bought.
Guarantees for foreign investment
The Bulgarian Constitution ensures that foreign
investors are entitled to perform economic activity
in the country under the same provisions applicable
to Bulgarian investors, except where otherwise
is provided by law.
Repatriation of capital and/or profits
Foreign investors can freely purchase foreign
currency and transfer it abroad upon presentation
of receipt for paid taxes if income was generated
through an investment.
This right may also be exercised by foreign
nationals working in the country, in respect
to remuneration received by them, and by foreign
nationals who have obtained a permit for permanent
residence and are registered as sole traders
or partners in a partnership.
Taxes & costs
Costs paid by the buyer when buying property
in Bulgaria, are as follows:
Notary fee
This is based on the purchase price or on the
tax evaluation (tax evaluation is usually much
lower). It follows a sliding scale but in all
cases is not more than 3,000 Lev.
Solicitor fee (for drafting contracts
and for conveyance)
Allow a total of 1-3% of the purchase price,
based on a sliding scale. The minimum lawyer’s
fee in all cases is 100 euro. In case business
trips/overnight stays are necessary for the
conclusion of the notary contract, the solicitor’s
transport and accommodation costs have to be
incurred by the buyer.
State fees (for property check)
Payable to the solicitor, they vary between
20 and 80 euro depending on documents which
have to be found and requested from the authorities.
Local municipality tax
Paid by the buyer on the date of the sale-purchase,
is 2% of the purchase price or of the tax evaluation
(as the tax evaluation is lower, it is this
that is usually entered in the notary contract).
Property register fee
For entering the new owner at the property register:
0.1% of the purchase price or of the tax evaluation.
Estate agent fees (if applicable)
It is customary in Bulgaria that both buyer
and seller pay a commission to the introducing
agent. This amount varies between 2-5% of the
agreed buying price (not the declared price
on the contract, which can sometimes be lower).
The fee is paid only if property searches have
proved satisfactory and the preliminary agreement
is concluded.
Setting up company fees/costs (if applicable)
State and notary fees – approx. 230 euro The
company capital of 5000 Lev, which can be withdrawn
after registration of the company is complete.
Solicitor’s fee (for the company) – 600 to 1,000
euro depending on the number of shareholders,
the subject of activities, etc. This covers
the whole registration procedure. The incorporation
procedure of the company takes usually three
weeks after all documents are signed.
Other potential costs
Solicitor fees for arranging visa and Bulgarian
ID card to legalise your stay in Bulgaria. Giving
Power of attorney to the solicitor, in order
to register a company, open bank account, etc,
thus saving time and money for the buyer.
Solicitor fees for opening personal bank account
(separately from the deposit account at company
registration) – 60 euro.
Use of translator / interpreter (if applicable)
– allow 60-80 euro per day.
Cost of local accountant for company’s accounts
and annual tax returns.
Annual property costs
Properties in Bulgaria have much lower running
costs, compared to other European countries.
Property owners have to pay an annual property
tax, equal to 0.15% of the declared value of
the property, to the local municipality. This
is usually around 30-100 euro per year.
A very small additional amount has to be paid
for waste-collection. If a property is part
of a residential complex, the owner normally
pays a contribution to the residents association
to cover common expenses and maintenance.
Please contact us for full details on
procedures and information needed to establish
a Bulgarian company. We can assist you in all
aspects of the purchase procedure.
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