Buying real estate in Bulgaria

Population: 7.6m

Currency: Lev

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• Economic Growth   - 4.9% real economic growth (2002est.)
• Political Stability  - A Parliamentary democracy
• A European Future   - A full member of NATO, Bulgaria joined the European Union in 2007.

  Legal and International Guarantees for Foreign Investment
The Bulgarian Constitution and the Law on Foreign Investments provide national treatment to foreign investors which means 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. In particular this principle covers the whole range of economic and legal forms of activities for accomplishing entrepreneurial businesses. The national treatment to foreign investors includes the participation in the process of Privatization and acquisition of shares, debentures, treasury bonds and other kinds of securities.

  Legal Guarantees Against Adverse Changes in the Law
The Law on Foreign Investments stipulates the principle that foreign investment made prior to the adoption of amendments in law imposing statutory restrictions only with regards to foreign investments, shall not be affected by these restrictions. The sense of the law provides for that foreign investments shall be guaranteed against subsequent legislative changes.

  Protection against Expropriation
The Bulgarian Constitution allows forcible expropriation of property in the name of the state or for municipal needs only if effected by virtue of a law provided that these needs cannot otherwise be met, and after a fair compensation has been ensured in advance. Expropriation under Bulgarian Law is governed by the Law on State Property and Law on Municipal Property.
The Law on Foreign Investments provides additional protection to foreign investors. The first added protection granted to foreign investors is that the expropriation may only occur for exceptionally important state needs, which cannot be otherwise met. Immovable property owned by foreign persons may not be expropriated for municipal needs.
As another protection for foreign investors the Law requires compensation in the form of another immovable property in the same location, and only given the foreign investor's consent, in another location, or by cash if the foreign investor prefers so. Compensation equals the immovable property's market price on the day of expropriation.

"Low property prices, beautiful countryside, historic towns and unchanged rural traditions. The cost of living is also surprisingly low. The food is good and a meal out costs £5, a beer 50p, and an espresso 15p." (The Times 26 Feb 2005) For more information: www.bulgarianembassy.org.uk

BUYERS GUIDE

Following the country's transition to a European style economy, the growth of the property market has been significant if not impressive. During the course of the last five years Bulgaria has seen a very welcome and positive change in its rapidly emerging property sector, most notably in the larger towns, beautiful mountain villages and of course on the 380 km Black Sea Coastline. These areas particularly are seeing the construction of modern state of the art buildings alongside a rapidly improving infrastructure and transport links. Anyone familiar with the “old” Bulgaria cannot fail to be impressed by the massive improvement in standards and the quality of the many new developments.
 
  Taking the first step to acquiring your property in Bulgaria may seem a daunting task, but the harmonization of Bulgarian legislation with that of the European Union makes the procedure of a real estate transaction in Bulgaria not much different than the procedures in other European countries.
 
  The most significant difference is that non Bulgarian Nationals are not allowed to purchase the actual land itself. They may however form a Bulgarian Limited Company through which the shareholders will acquire the land, and thus purchase and own their property this way. The process is relatively straight forward, but involves navigating through a whole raft of Bulgarian legislative issues that involves very considerable paperwork. An essential part of the service offered by our company is to guide you through this process using our own in house legal and financial team. This rule does not apply to foreign nationals who wish to purchase leasehold apartments or parts of larger developments.
 
  The costs associated with real estate transactions are however, pleasingly lower. As elsewhere in Europe, the transfer is the subject of Notary and Municipal (Local Authority/Stamp Duty) fees. These fees total approximately 3 % of the value of the transaction and are paid to the municipality in which the property is located.
 
  In addition to these statutory government fees clients will incur solicitor's costs of between 1% and 3% of the declared price of any real estate transaction. As with most other EU countries these charges fall outside of our published tariff of agency charges. However our clients can benefit from our low solicitor fees of between 0.25 - 0.5%.
 
  Typically, owning property in Bulgaria has the added benefit of significantly lower running costs, compared to those in other European countries. The owner of a property is obliged to pay an annual property tax of 0.15% of the declared value of the property (compare that to your UK council tax!!). Amazingly, this property tax also covers all waste-collection fees for your property!
 
  If your property is a part of a residential complex the owner will normally pay a contribution to the Housing Association of about 350 Euro per year – this provides for 24 hour security, cleaning, swimming pool, lighting and maintenance, etc.
 
  All foreign buyers purchasing real estate property must be aware that in Bulgaria there are such terms as "Government Tax Estimation Price" and "Purchase Price". The "tax estimation price" is for the purposes of real estate taxation and is often calculated by the municipality lower than the actual selling (purchase) price. Bulgarian property vendors will wish for the "Tax Estimation Price" be written into the title deed, and not the actual price which the buyer has agreed to pay. As a result of this common practice there may well appear to be discrepancies between the price written in the title deed and the actual cash consideration paid by our Clients. If our Clients wish that the purchase price to be written in the property title deed they must notify us in advance and we will attempt to negotiate with the vendor of the property on your behalf.

BULGARIAN MORTGAGE / FINANCIAL ADVICE

Based on the valutation or purchase price, whichever is the lower, of the Bulgarian residential property, UK & Irish Nationals (and non-UK Nationals on a case by case basis) can borrow up to 70% for purchases and re-mortgages for Home Improvements. Mortgages for other purposes may be considered - to discuss this call in the UK FREEPHONE 0800 092 0800 elsewhere call 0044 7699 742074.

Please note, that if the property is an apartment being built, funds are not available until the completion and the apartment has been legally registered in your name. The same will also apply for a new house/villa, but in this case, if the land is already purchased and registered in the name of a Bulgarian Company (with you as legal owner of that Bulgarian Company), stage payments may then be available on a drawdown basis to construct the property - full details on request.

For all schemes there is a minimum loan of 25 000 EUR, no maximum, available mainly in Euros. The maximum term of the loan is usually 25 years - available up to age normally 70. Interest rate information can be found here.

FREQUENTLY ASKED QUESTIONS / FAQ?

GENERAL QUESTIONS

Where is Bulgaria?

Bulgaria is situated in Eastern Europe. It’s about half the size of England and in oblong shape. The River Danube runs along the top of the country, from west to east. This is also the border with Romania. The right hand side of the country is bordered by the beautiful Black sea. To the south are borders with Greece and Turkey. To the west are borders with Macedonia and the former republic of Yugoslavia. The landscape ranges from impressive mountains with established National Parks and Ski resorts, to lat plains, dense forests, meandering rivers and lakes.

What is the currency there?

We use the Euro. Exchange rate Details. The Bulgarian Lev was the previous currency which was pegged to the Euro in 1997 when Bulgaria entered a currency board and then finally entered the Euro in 2007.

Can we use our credit and debit cards when we come?

In the bigger towns, you can use your cards, but still only in the larger shops. All the hotels will accept cards, and all the major petrol stations, but in general most other transactions are carried out in cash.

What about cash points?

They are in all the towns, and will accept the majority of UK cards.

Are there supermarkets in Bulgaria?

Yes, all the large towns have supermarkets, about the same as UK. There are also chains of “convenience” similar to SPAR stores everywhere. The smaller towns and villages will all have well stocked local shops for all the essentials.

Anything else?

Bulgaria has large DIY warehouse stores here ( similar to B&Q ) , large electrical warehouse stores, selling everything from vacuum cleaner bags to huge, American style refrigerators. “ Cash and Carry “ warehouses are also popular here.

Can we use our UK appliances here?

Yes, Bulgaria uses 220 volt power so no problems there. We use continental style 2 pin plugs, so bring an adapter.

What about telephones?

It’s not worth bringing over a UK stationary phone for your new property as they will not work in Bulgaria. Mobiles will work, either with a Bulgarian SIM card or using your UK card if it is suitable.

What is the weather like there?

Unlike the UK, Bulgaria has four distinct seasons, with temperatures ranging from about -10?C in the winter, to +35?C in the summer.

Is there much to see and do there?

Absolutely, with the Black sea coast, ski resorts in the mountains, original towns and historical villages, ancient burial sites and ruins, lakes and reservoirs, there should be something for everyone.

Can I bring my golf clubs?

Yes, Bulgaria has some courses, but it still has something of a fledgling golf industry. More and more courses are being developed all the time though.

What about the cost of living there?

Compared with UK prices, this is extremely cheap. A loaf of bread should be about 20 pence, a pint of lager about 55 pence, a packet of cigarettes about 70 pence. A liter of petrol is about 60 pence.

GENERAL INFORMATION ABOUT BULGARIA

Bulgaria is situated in Southeast Europe and occupies the eastern part of the Balkan Peninsula. Bulgaria borders the Republic of Macedonia and the Republic of Serbia to the west, Greece and Turkey to the South The River Danube separates it from Romania to the North. Its natural eastern border is the Black Sea. Bulgaria ranks fifteenth in size among the European countries.

  Area

  111.000 sq. km.

  Climate

  Bulgaria’s favourable climate is one of the country’s best features. The temperate continental climate is characterized by four distinct seasons. Summers are typically hot and dry, with average daytime temperature of 26 C°. Winters are cold with average daytime temperature of 0 C°. Springs and autumns are mild. The wettest months are April-May and November. In the south and Black Sea coastal region the continental climate is modified by Mediterranean influence. In mid-summer, the coast enjoys prodigious sunshine with daytime air temperatures averaging 28 C° and water temperatures around 23-25 C°. The wettest months along the coast are June, October and December.

Average air temperature in the summer is about 28°C, water temperature - 25°C. There are more than 240 hours of sunshine in May and September and more than 300 hours in July and August.

  Landscape

  Extremely varied: A unique combination of high mountains and sandy beaches, large plains and lowlands, beautiful valleys and picturesque alpine lakes. It will fascinate you with its fantastic creativity, squeezing so much beauty onto such a tiny land - curious rock formations and mysterious caves; sunny seashores with golden sands, quiet coves and romantic capes; majestic mountains with fiery peaks, mirror lakes and shady woods full of scent.

  Population

  7 761 049 / December 2004/; The population consists chiefly of Bulgarians - 83.9%. There is a substantial minority of Turks (9.4%), and smaller groups of Roma (4.7%).

  Official language

  Bulgarian; Alphabet - Cyrillic
  Signs along international motorways, in airports and resorts are also spelled in Roman letters. Foreigners visiting Bulgaria will experience limited problems navigating and interpreting signs. In the country’s resorts, hotels and restaurants Eng- Black Sea Coast Climate Mountain Climate Average Temperature lish, German, French and Russian is spoken.

  Capital

  Sofia (pop. about 1,200,000)

  Large Cities

  Plovdiv, Varna, Bourgas, Rousse, Stara Zagora

  Government

  Bulgaria is a parliamentary republic. The Constitution of the Republic of Bulgaria is the supreme law of the country and no other law may contravene it. All international treaties, which are ratified pursuant to the constitutional procedure, are considered part of the domestic legislation.

  Administrative Territorial Division

  The territory of the Republic of Bulgaria is divided into 278 municipalities and 28 regions.

  Electricity

  Mains voltage 220 V/50 Hz, round two-pin plugs. Western-style appliances need adapters for the country’s twin-prong plugs, as well as voltage converters.

  Time Zone

  GMT+2 hrs; CET+1 hr

  Health

  No particular risks, but visitors often advised to stick to private clinics when requiring medical treatment in Bulgaria.

  Telecommunications

International direct-dialling code for Bulgaria is 359, for Sofia: 359 2.
Local and international telephone services are covered through automatic street telephones operating with tokens and calling cards. Mobikom and BulFon card phones require different phone cards. Tokens for local calls (0.20 leva) and calling cards are available for purchase from most newspaper kiosks and any post office. Inland and international phone and fax services are available at the Sofia Central Post Office and at local post offices in the capital and in the country.

Currently there are 3 mobile operators. Internet services are offered in Internet clubs and cafes in almost every town.

Essential phone numbers:

123 - Operator service for international calls (where no direct dialling is available);
121 - Operator service for inland long-distance calls
120 - Wake-up service;
144 - Directory for office phone numbers in Sofia;
145 - Directory for home phone numbers in Sofia;
1286 - Emergency road service (Sofia), 146 (rest of country);
150 - Ambulance;
160 - Fire;
166 - Police;
175 - Weather forecast;
180 - Speaking clock.

Except for the international calls operator, others are Bulgarian-speaking.

  Official holidays

January 1 - New Year
March 3 - Bulgaria’s Liberation from Ottoman rule - the National Day
Easter - one week after the Catholic Easter
May 1 - Labor Day
May 6 - Bulgarian Army Day
May 24 - Day of Bulgarian Enlightenment and Culture and the Slav Script
September 6 - Bulgaria’s Unification
September 22 - Independence Day
December 25 – Christmas

  Food and Drink

Bulgarian food is close to traditional European cuisine. Typical food specialities include:

• Shopska salad - prepared from diced tomatoes, fresh cucumbers, green peppers, topped with feta cheese and seasoned with olive oil and parsley
• Tarator - cold served soup from yogurt, fresh cucumbers, seasoned with garlic and dill
• Sirene po Shopski - feta cheese, diced tomatoes and onion topped with egg and cooked in pottery
• Kebapche - minced meat rolls seasoned with traditional spices and barbecued
• Kuyfte - minced meat balls seasoned with traditional spices and barbecued
• Shish Kebab - grilled skewered meat, onion and paprika
• Byurek peppers - peppers stuffed with cheese and herbs and then rolled in flour and fried.
• Banitsa - baked pastry filled with cheese (and sometimes leeks or spinach).

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