Why Invest In Bulgaria?
Capital appreciation
Official figures show that property prices rose by 24%-100% in 2003. Lower interest rates and the straight-forwarded state foreign policy are considered among the main reasons. Most aspired are small-sized panel apartments, between 60 and 80 sq.m. that have seen a 100% increase in some suburbs of the capital Sofia in 2003.
Mortgage lending potential
Currently, mortgage loans are 5% of the total credit supply within the local banking sector. In developed markets, this rate is usually in the range of 15%.
Foreign investment
Increased foreign direct and indirect investment in real estate - determined by the expected EU membership perspective and constantly expanding tourist industry.
Low prices compared to Europe
Bulgaria is a country with extremely low real estate and land prices compared with Western European and most Eastern European states.
Easy purchase process
The harmonisation of Bulgarian legislation with that of the European Union means that the actual process of a real estate transaction in Bulgaria is not that much different to the procedure that exists in other European countries, although there are still some major differences that need to be more defined if the market is to develop in a meaningful way.
Lower costs
The costs associated with property transactions in Bulgaria are generally much lower than in developed economies, as are the running costs or the costs of refurbishment or improvement. All properties are bought freehold and more than 90% of occupied residential property is owner occupied.
Tourism
Following Bulgaria's transition to a market economy, the development of the retail property market has been difficult, but steady. With the initiatives to increase tourism, a large number of new construction projects have already been commenced along the Black Sea coast. In 2003, the tourism income increased by 21% - over 4 million visitors.
Value for money
Property and land prices are without doubt good value in Bulgaria. This may be due in part to the general historic neglect of its assets and also because the Bulgarian currency (the Lev) is undervalued. In addition, the current restriction on foreigners to own land is further affecting the liquidity of the market.
EU membership
Bulgaria has received an invitation to join the EU in 2007. This combined with the removal of certain remaining constitutional restrictions on foreign investment in land (due to its incompatibility with EU membership) should cause a further upward surge in property prices.
Mortgage finance
The next few years look set to be revolutionary in terms of demand from wealthier Bulgarians as many banks have now started to offer mortgage financing and as a result, the demand for quality houses and apartments will continue to gradually increase. 70% financing is achievable today on most Bulgarian properties, making it a very attractive investment.
Stable and predictable business and political environment
EU membership on January 1, 2007 gives access to markets of over 500 million consumers
The lowest operational costs and tax rates in a European market economy
Industrial goods traded duty free between Bulgaria and the EU
Excellent climate, natural scenery, food and hospitality
Flat corporate income tax rate of 15% (2006 expected rate: 12%)
VAT exemption on equipment imports for investment projects over Eur 5 million
Annual depreciation rate of 30% for machinery & equipment, 50% for new equipment used in entirely new investment or expansion and 50% for software and hardware
Acquisition of land and property through Bulgarian registered company with 100% foreign ownership Bulgarian properties offer great value for money when compared to other European properties. And considering the long-term prospects for the country, they offer a superb investment.
An average seaside house can be purchased for around £25,000, and rural properties cost even less.
Whatever your budget, Bulgaria offers the best value for money.
As a renowned Bulgarian Property agency, we are able to provide plenty of properties from all price ranges including seaside villas, country homes and commercial properties. Whatever you require we are able to locate suitable properties for you.
Buying properties without land
In Bulgaria, foreigners and foreign companies can directly acquire buildings, premises within a building and limited property rights (e.g., a construction right, right of use).
Buying properties with land
According to the Bulgarian Act on Foreign Investment, foreigners can not buy land. Therefore the most common method for foreigners is to set up a company, which then owns the land. This law is expected to change within short a term as Bulgaria is supposed to enter the European Union on January 1st, 2007.
Formation and registration of a company
A company is considered incorporated as from the date of its registration into the commercial register of the relevant district court. The application for registration furnished with certain documents required by the law shall be filed with the court by the elected managing body.
The purchase process is as follows:
A reservation deposit is paid to hold the property. (Usually 500 - 1000 Euros)
If the property is a re-sale or land then a Bulgarian company must be formed to own the land.
An initial private purchase contract is then signed (checked first by your lawyer) and an initial payment is due (usually 10% - 30%, depending upon whether a re-sale or off plan).
The Notary Act is then signed in front of a Bulgarian Notary, either in Bulgaria or in the Bulgarian Embassy. In the case of an off-plan development the Notary Act is signed once the building is complete.
The time each stage takes place depends upon the type of sale. In the case of an off plan development, private contract is usually signed within weeks of reservation.
We source the best and most efficient lawyers to help make your purchase as smooth and risk free as possible.
