Buying Bulgarian Property - Emerging Real Estate

In recent years Bulgarian property prices are up by more than 25% in general. Some real estate went up by 50% in 2004, especially in Sofia, the Black Sea beach resorts, Sunny Beach and in the ski resorts of Borovets, Bansko.

The improved economic conditions, political and Bulgarian social stability over the last 3 years brought a real boom in the prices for buying Bulgarian property. Bulgaria has huge tourism potential in the country.

There are great natural attractions - high mountains, the beautiful and clean Black Sea coast, national parks, wide open areas of natural beauty and thousands of years of history and culture that are making thousands of people thinking about buying Bulgarian property. Where the desired location is a quaint ski chalet or a Black Sea coastal development bargain properties can be found for the price of an average family saloon car.

Currently the best buying investment opportunities for buying Bulgarian property include Bansko in the mountains, Sunny Beach, Varna and Bourgas on the Black Sea coast. Beyond the tourist resorts, the capital, Sofia, presents a great Bulgarian buying opportunity. The city is developing rapidly as a commercial centre, with good capital appreciation and rental yields (through year round tenants).

Bulgaria is one of the fastest growing tourist markets in Europe, which is an important factor for Bulgarian buying investors. Together with the rising prices, buying Bulgarian property is attracting a lot of interest from investors.

Aside from the property price increases and boom in the tourist industry there are many other reasons why buying Bulgarian property has become so popular –

• The economy and currency are stable
• Foreign buying investments are growing
• Joined as a member of NATO in 2004 and membership of the EU planned for 2007
• Low cost of living
• Among the lowest costs of doing business in Europe
• Roughly the same size as England but with a population of just 8 million
• Average daily temperatures of 28 degrees centigrade in July and August on the coast.
• Mortgages are available form Piraeus Bank and Conti Financial Services.
• The local population has more employment opportunities.

Restrictions on buying Bulgarian property

Buying Bulgarian property, buildings, the right to build and other land related rights such as the right of use and passage are now sanctioned, but foreigners are still prohibited from buying land. Buying property (except land) is made easier by the new Foreign Investment Act (1997) which lifted the requirement to seek prior approval of the Ministry of Finance to conclude such purchases. The lifting of this investment act contributed to the influx of people buying Bulgarian property

At present, non-Bulgarians cannot own land in the country directly even when buying Bulgarian property. This does not apply when buying ‘off plan’ property. When buying land, a buyer must first set up a limited liability company in whose name the purchase may be made. This can be a pretty daunting prospect at the outset but, provided that you have access to the necessary local expertise, it is actually a surprisingly simple procedure.

Companies can be set up and registered at a total cost of approximately £600 (including registration with the National Tax Registry, the Companies Register and the Social Security Institute), a process which requires the owner of the company to set up a bank account (for a nominal fee) and place a deposit of 5000 Leva, refundable once the company becomes a legal entity.

A limited liability company set up in this way can own more than one property. Furthermore, ownership through a limited liability company entitles the buyer to a substantial degree of legal protection. This is all part of the buying process.

Another possible restriction when buying Bulgarian property is if the desired location is too near to an area deemed to be of importance to national importance when special permission from the Council of Ministers must be sought. This includes buying property close to border areas.

However, in readiness for the influx of foreigners to its shores, the Bulgarian government has put in place proposals to relax non-national property ownership laws, enabling foreigners buying Bulgarian property to do so quickly and easily.

After the restrictions have been settled a key point when buying Bulgarian property in is to never sign anything until it has been checked by a lawyer. In today's "boom" climate there may be no option but to sign some form of reservation contract or risk losing the property. If this situation arises then it is strongly advisable to seek legal advice when buying Bulgarian property.

Whilst buying Bulgarian property can seem like a legal minefield of red tape, after cutting through this the end result should be a financially sound overseas investment and a dream home in the beautiful up and coming country of Bulgaria.