Frequently Asked Questions

The following Frequently Asked Questions relate to buying property in Bulgaria. Please also view our FAQ sections on SPAIN CYPRUS and TURKEY

We also suggest reading the Legal Guide to Bulgaria as additional reference.

BULGARIA: WHY SHOULD I INVEST IN BULGARIA?

Rental and Investment Opportunity
There has never been a better opportunity to invest in Bulgaria, with recent times having seen record property sales registered. Property selling prices in Bulgaria's Black Sea and Mountain Ski Resorts have increased by up to 20% in the previous 12 months. Forecasters expect prices will continue to increase for a number of years especially now that Bulgaria’s accession into the E.U has been agreed for 2007.

Bulgaria’s tourism sector is well established and has recently become one of the fastest growing tourist destinations in Europe. The number of tourists visiting Bulgaria is expected to reach 4.4m in 2005 and as tourism continues to grow exponentially, rental opportunities for the right property are high.

The country has a number of unique features in its favour-

Macroeconomic stability:

• Political and economic stability
• Sustained GDP growth of 4.7-4.9 % per year
• The currency is stable and linked to the Euro
• NATO membership achieved in 2004
• Rapid economic growth ahead of EU membership
• EU membership set for 1 January 2007
• Very competitive labour cost compared to the rest of Europe
• Very competitive tax regime -  only 10% corporate tax rate from 2007.
• Well educated, highly trained English speaking workforce
• Strategic geographic location
• Full national treatment of foreign investment
  

• Established and fast growing tourist industry
• Bulgaria voted No. 4 tourist destination worldwide by The Washington Post
• Budget airlines expected to start servicing the Black Sea coast from mid-2007 or 2008
• Bulgaria is only  a 2.5 hour direct flight from the UK .
• 22% average annual growth of tourist arrivals for 2002 – 2004
• 43% year-on-year increase in British tourists for 2003
• Well developed and constantly improving summer resorts
• Excellent skiing opportunities with virtually guaranteed winter snowfall
• Really low prices, offering superb value for money holidays
• 1600 thermal mineral water springs
• Rich historical and cultural heritage
• Easy access from Europe

       ONE AND A HALF MILLION TOURISTS IN 2006

• Bulgaria on the agenda of top European real estate investment funds
• All properties we sell have a 10 year building guarantee
• Almost all new properties are freehold
• Rapidly emerging property market
• Bulgarian property prices are rising but are still below other comparable countries, the major boom is yet to happen there
• Bulgaria has yet to see the spiralling property prices that have typified areas such as Spain, France and Greece
• Still lowest real estate prices in Europe
• Dramatic increase in demand for quality accommodation at Bulgarian resorts
• Strong drive for property purchase from Bulgarians living abroad

We have made it possible for foreign investors to take advantage of this extremely lucrative investment

Buying an ‘off plan’ apartment in Bulgaria is essentially the same as buying in the UK and means reserving a property on a new development before the property is completed, often before construction has started. Buying ‘off-plan’ can prove a fantastic investment and prices are extremely competitive at this early stage as potential investors only have floor plans and artist impressions of the finished development to view and developers are keen to sell to minimize risk and to provide the project with some forward momentum.

You then have the option of selling straight away upon completion, or you can hold on to your property for further rental/ capital growth whilst having a great holiday destination to visit. Holding on to the property for a longer-term means you can benefit from Bulgaria’s accession to the EU in 2007 where considerable appreciation is expected throughout the Bulgarian real estate market, with holiday apartments expected to lead the way and appreciate the most in value.

'Off Plan' purchases have provided spectacular returns for hundreds of people over the last couple of years. The real key to why buying 'Off Plan' can prove such a good investment lies in the fact that in many cases you only have to pay, a deposit of  approx. 40% the purchase price and then nothing until various stages of the project are completed.

Bulgaria is a country of immense variety, both geographically and culturally. As a destination, the country has only received widespread recognition within the last couple of years. Many locations have yet to be discovered by international tourism.
The full potential of Bulgaria has yet to be recognised or achieved. With the economy growing at 6% per year and unemployment falling, Bulgaria’s economy is quickly integrating into the EU prior to its 2007 membership. Inward investment continues apace with international organisations predicting continued economic prosperity for the foreseeable future.
International interest in the property market was initially concentrated in the coastal beach resorts of the Black Sea. As the market has developed and matured an ever increasing variety of property has become available catering to the differing interest and needs of international buyers. Prospective buyers can now choose between mountain ski resorts, historic villages, luxury apartments in the capital or coastal villas.
With in depth knowledge of the property market in Bulgaria, we help our clients choose the appropriate property that meets their aspirations. Our clients achieve early access to new developing areas due to our extensive network of offices and contacts within Bulgaria.

Buy to Rent

Once you have completed on your property then our associated Bulgarian agents can advise you with regard to the management and renting of your new Bulgarian home. They can offer a complete furniture pack and cleaning/maintenance service. They can find the tenants - either short or long term - collect the rent and provide monthly statements. As a “rule of thumb” guide an apartment in Sunny Beach rents out for €200 to 300 per week in low season and 400 to 500 in high season.

Guaranteed Rental Income.

Developments with guaranteed rental scheme of up to 6.5% are normally available.
These schemes are applicable to both the mountain and coastal resorts.
The guaranteed rental can come from the developer or a management rental company. It is always a wise precaution to notify your lawyer of details of these rental schemes so that he can advise you with regard to the relevant contracts and their commencement date. The rental income amount is normally based on the net purchase price. 


INVESTMENT ADVICE

Investment Opportunity in Bulgaria - A personal view.

Bulgaria is turning into the hottest property market in Europe. It has been interesting to see the development and recognition of the Bulgarian market over the past eighteen months.

Why should I invest in Bulgaria?

Simple one to answer - currently for capital appreciation and low cost of entry. Also, secondary consideration has to be, the people and the country. We have seen substantial gains over the previous eighteen months .Current average cost per square meter from approx,700-Euros for key developments in Sunny Beach,[ slightly higher in the skiing regions and Sofia] are expected to result in excellent gains over the next 12-24 months.

Where should I invest?

There is no easy answer to this question.
Some investors prefer the skiing regions of Bansko, Borovets, and Pamporovo as they provide a reliable and “upmarket” clientele.
Other investors prefer the popular and expanding regions of the Black Sea Coast i.e. Sunny Beach and Golden Sands.
Another option to consider is Sofia, where you can acquire a new apartment for a very modest amount considering that you are purchasing in a European capital city
It is also possible. of course, to spread the investment by purchasing in each of these regions.

Stage payments

This is normal practice in Bulgaria.It is usually 40% on exchange followed by  three further payments of 20%

Why Stage payments?

Bank loans are not, generally, available to developers so, they use the stage payments to fund the complex. Obviously, the larger developers are not totally dependent on selling all the apartments prior to commencement of development

Why so much emphasis on Sunny Beach & Varna Golden Sands?

They are the best beach resorts in Bulgaria. 7 Km of the best bay and sand you will see. Very well developed infrastructure. Close to Burgas and Varna airports. In general, sympathetic developments provide an excellent opportunity for renting your apartment.

What about ski resorts

Bansko is an ancient town, with cobbled streets, situated on the foothills of the majestic Pirin Mountains. The town originated during the 9th.-10th centuries and became famous for its crafts, trades, artistic and cultural activities. Perhaps not the most highly developed of the ski resorts but, the one where most money is expected to be invested over the next 3 years. Only about 3 hours drive from Sofia and a great annual jazz festival during August.

Buying an apartment –

Do I need to setup company? No, is the short answer. However, buying houses or land and you will need to Set-up Company. Cost for company setup is approx. 600 Euro with annual return every year not to exceed 200 Euro.

Building Guarantees

All new build properties have a 10 year building guarantee.This is a requirement of the national standards,and is written into all preliminary contracts.

Property Tax?

Yes there is property tax and it is paid annually based on 0.15% of the property value.

VAT ?

Some developers include Vat in their prices, whilst some do not, others include it but at “declared prices”.

Legal fees & Taxes.

Allow approx 5% of the purchase price to cover legal fees and other relevant expenses.

What about country areas?

 Probably the most beautiful countryside in Europe with breathtaking landscapes. buy in country areas if you do not intend to rent. Houses can be very cheap but, please oh please, check the area first. We specialise in area between VelikoTarnovo and Sliven in the Balkan Mountains and are fortunate to be in position to offer clients rental income for select houses. We do not advertise these on the website so, please contact us for details.

Are there any villas available?

We are starting to see villa developments for release. Check our portfolio for latest offerings.

Should I wait to invest?

Absolutely not! The market is expected to show substantial show gains in 2007-2009. However, the large gains are likely to be made up to 2007. Remember, we are selling a number of developments which are”off plan”and will not be ready until the summer of 2007.

Why should I purchase from Owners Overseas?

We are independent and impartial. We match the client to the appropriate location and the most suitable development. We keep in regular contact with our clients and remain focussed on the transaction throughout the process

“Why invest in Bulgaria” is for guidance purposes only and information is subject to amendment.