Why Invest In Bulgaria?

• Property prices are amongst the lowest in Europe; • Fast developing real estate market; • Liberal foreign investment laws; • Improving bank mortgage system; • Stable political and economic environment; • Excellent return on investment (ROI); • Limited currency risk (BGN is fixed to the EURO under a stable currency board); • Significant foreign investment in real estate; • Foreigners can legally own property through appropriate legislative schemes; • Cost of living is the lowest in Europe; • Beautiful beach and ski resort areas set to expand rapidly in the short term; • Historical old towns; • Healthy and growing open market economy; • Stable democracy; • EU membership since January 2007; • Highly-skilled, English-speaking work force at competitive cost; • The most stable and predictable business and political environment in South-East Europe; • The lowest operating cost in a European market economy;

• With warm weather and stunning blue flag beaches as well as beautiful countryside and a rich cultural experience, Bulgaria has something to offer everyone. • Bulgaria is an exciting emerging market and currently offers property at prices simply un-obtainable in other areas of the world. With prices steadily rising and set to continue to do so for some time, wise property investment Bulgaria promises excellent returns on investment. Purchasers are snapping up bargains now, with a view to enjoying some excellent returns on investment in the near future. • With an increase in tourism of 50% between 2000 and 2004, Bulgaria has established itself with the fastest growing tourist trade in Europe and this, in turn, is steadily driving property prices upwards. Tourism concentrates mainly on the popular Black Sea resorts and increasingly popular ski locations and it is creating a very stable buy-to-let environment for investors. • Traditionally new EU countries experience steep increases in property values and tourism from other EU nations, whilst having brought their infrastructures and economic standards up to EU standards. • Close proximity to Europe and increased low cost airlines offering direct routes to Bulgaria from many UK and other European airports, make Bulgaria easily accessible and a viable property location for investors and property purchasers alike.

Can foreign nationals own property in Bulgaria?

Yes, foreign nationals are free to own as much property in Bulgaria as they wish, without restrictions. However, if you purchase land, you are currently required to incorporate a business in Bulgaria and own the land as an asset of the company.

Why should I choose Bulgaria?

Bulgaria is ideally situated in South-eastern Europe and is easily accessed by direct flights from most European airports. Bulgaria has something for everyone. A warm climate entices year-round tourism, along with a wide range of cultural and historical interests for sightseeing. Bulgaria also boasts a rich variety of natural beauty, from stunning blue flag Black Sea beaches, to beautiful mountains with ski resorts. It is small wonder that Bulgaria is the fastest growing holiday destination in the world. Major tour operators such as Thompson and First Choice now include Bulgaria in their brochures and cite it as one of their top sellers. Investment wise, high growth figures are very achievable while land and property prices are on the increase. Over the past two years, prices have risen by over 50% in some areas and with the enormous boost to tourism currently underway, buy-to-let purchases are also proving highly lucrative.

How do we travel to Bulgaria?

Budget airlines have been running peak season flights to the Black Sea hubs of Burgas and Varna for a few years already and British Airways has just jointed them and begun direct flights to Varna. Flights arrive at one of four international airports: Sofia (SOF), the largest of the airports, Varna (VAR), Ploudiv (PDV) for charter flights to the ski resort of Pomparovo, and Burgas (BOJ) for domestic flights and for summer charter flights to the Black Sea resorts.

What is the direct flying time from UK to Bulgaria?

Bulgaria is only a short flight from the UK (2 ½ to 3 hours) and has connections from many UK airports.

Is a visa required to enter Bulgaria?

To travel to Bulgaria for a holiday or a brief stay you do not need to have any particular visa type. Depending on your home country you can remain for either 30 or 90 days in a six month period - we advise you to consult your country’s Bulgarian Embassy for specific details.

Which are the most popular beach and ski resorts and towns in Bulgaria?

Bulgaria offers excellent opportunities for investment in holiday property. If you prefer the sea, we recommend investing in Varna and Bourgas - the sea capitals of Bulgaria, Sozopol and Nessebar - sea towns famous for the preserved authentic architecture, Sunny Beach and Golden Sands - the largest and the most popular beach resorts on the Black Sea coast. Not to be underestimated is Albena - the oldest sea resort located at the northern seaside where three new golf courses are under construction. Rich in high mountain ranges, Bulgaria has many ski resorts with first-class ski facilities and tracks. Bulgaria's ski resort No.1 is of course Bansko , located at the northern foot of Pirin Mountain. The other ski hotspots are Borovets in Rila and Pamporovo in Rhodope.


Off Plan - buying a Bulgarian property off-plan means reserving a property on a new development before tits completion and often before construction has started. The developer is keen to sell as many properties as early as possible in order to raise capital for construction and minimize the risk to themselves and the borrowed funds from banks and that is why properties that are marketed by estate agents at this early stage are usually discounted by around 10 to 15% below market value. Another reason for buying off-plan in Bulgaria to be more attractive is that the new apartments and residential complexes are built to higher standards with more facilities appealing to foreign buyers and holiday makers, and this option is more convenient if you require additional extras for the interior or the room disposition of your apartment.

Buy to let

Bulgaria is a much less mature market than other European property markets such as Spain. However Bulgaria has enjoyed much press recently and its tourism industry is growing at the fastest rate in Europe. Bulgaria is expected to enjoy 20 million annual tourists by 2010. This is of course excellent news for the Bulgarian property investor who is perfectly positioned to offer rental accommodation to this influx of tourists. Obviously during the summer months the areas around the Black sea beaches attract the most tourists and so investors with quality property in these areas can expect good occupancy and rental yields both appreciating with the demand for accommodation in the area. In the winter months Bulgaria’s Ski locations such as Bansko, Pamporovo see the majority of tourist activity and so investors in these locations enjoy the rewards of owning a property in a location with increasing demand. Over the next few years Bulgaria is expected to see a huge increase in tourism and so investors in popular areas are looking forward to seeing good return on investment from rental yields. The Buy to Let model is becoming more and more popular with holidaymakers (and so in turn property investors) as low cost airlines offer excellent value flights into an increasing number of destinations via the internet allowing tourists to effectively create their own holiday by searching for private rental accommodation and avoiding the travel agent and package holidays all together.

Expenses for Property Purchase in Bulgaria

• 2% State Tax - similar to a stamp duty and calculated on the purchase price. • Notary Fee - calculated in accordance with the price stated in the Title Deed. Expect to pay approx. €350.00 on a typical 2 bed apartment. • Land Registry - 0.1% of the value. • Legal fees - expect to pay 1% of property value in most cases

Property taxes in Bulgaria

A foreign investor can invest in properties in Bulgaria either directly or through a local legal entity. Only Bulgarian-resident individuals and entities can acquire title to land, while non-residents may acquire only buildings and limited rights (e.g., leasehold and construction rights) to land. If you are investing in Bulgaria, as a non-resident property owner, you could be liable for the following taxes: • Annual property tax. All property owners in Bulgaria pay an annual property tax. The current annual tax rate for a house is 0.15% of the capital value of the property. In addition to this tax, owners also pay a waste-collection tax.. • Tax on rental income. This is subject to a 15% withholding tax after deducting allowable expenses such as mortgage interest etc. • Capital Gains Tax(CGT) This is levied at 15% on any increase in the value of the property. • Value Added Tax. Transactions with land and lease of property for residential purposes are exempt from value added tax. All other real estate transactions are subject to VAT at the uniform rate of 20% (will be changed after Bulgaria joins to EU). The buyer/lessee is entitled to a VAT refund, provided it is registered for VAT purposes. • Corporation Tax. As some property interests in Bulgaria cannot be held directly by foreigners, buying through a local Bulgarian company is recommended. If you own a company in Bulgaria, note that in January 2005 the rate of income tax for a corporation in Bulgaria was reduced from 19.5% to 15%. The tax year in Bulgaria ends on the 31 December. A limited company must file an annual report by the 31 March. If you incorporated a limited company to purchase a house or land, then there will be no tax liability, as the company was not trading. However, you still must submit company accounts to the Companies' House Register in Bulgaria every year to satisfy the authorities that the company was not trading. This is a legal requirement.

Factors to be Aware of

In order to avoid paying excessive amounts of Capital Gains Tax (which can amount to as much as 30% of the real purchase price), it is likely that the current owner of the property will not want to declare the real price of the property on the Deed of Transfer. The Title Deeds will therefore display a lower figure than the actual price you paid for the property. This situation will have its financial consequences, such as not having official documents for the real money you spent plus liability for higher taxes if you decide to sell the property afterwards and declare its real value. You will need to consult your broker/lawyer on this and all aspects of the deal to avoid any eventual misinterpretations or oversights.

How your loan is calculated

Your loan is based on your joint net income and is calculated on an affordability basis. All your existing liabilities, including any mortgage/rent payments, personal and bank loans, credit card payments (if the balance is not cleared on a monthly basis) and any maintenance payments together with your proposed Bulgarian mortgage payments must not exceed 40% of your net monthly income (Example: Net joint monthly income £2,500 x 40% of that figure is £1,000 minus existing monthly mortgage payment £300 - No other liabilities. This leaves a balance of £700 for a proposed Bulgarian mortgage payment).

Company Ownership of Land

In Bulgaria, although a foreign legal entity (Ltd, joint stock company etc) is entitled to own titles of land, a foreign person is not. However, a foreign person may have full rights on a building, as he/she may own title of a building without owning the underlying land. If applying for a loan to a Bulgarian Company of which you are the beneficial owner, you will be required to guarantee the loan. The Lender will expect you to receive independent legal advice from a solicitor in the UK concerning the guarantee and confirmation from the solicitors that they have indeed advised you independently (both documents included within the Guarantee). Be aware that the Lawyer/Notary may be incorporating, within his charges, costs for assigning the mortgage and you should establish with the Lawyer and/or Notary the actual cost before proceeding with the loan application. If you intend to be present at the completion to sign all the relevant documents and you do not understand the Bulgarian language, a translator will be required to respond to the Notary. The translator will also be required to sign the notary deed.


The Facts about Financing a Bulgarian Purchase Currency EURO Current Interest Rate 7.5%, variable Loan to Value Up to 70% of the valuation price Term 5-15 years Minimum Amount EUR 40,000 - No maximum (Generally) Status Full status only

Talk to us today

If you would like to find out more about buying property abroad through Volcano Estates, simply contact us today on (0034) 928-51.87.52, or by e-mail, for an immediate response.