Buying Property
The real estate market of Bulgaria has achieved an incredible rate of growth over the past few years, strengthened by a fast-growing economy and its admission into the EU in January 2007. Property prices in some regions have risen by over 50% in the last two years alone, and are predicted to grow at the rate witnessed during the Spanish market boom, and the figures all point towards a fantastic opportunity for property investment.
The Knight Frank Global House Price Index, which analyses house price growth worldwide, ranked Bulgaria as having the second highest annual house price growth up to the third quarter of 2006 with an incredible growth of 32.1% up to the third quarter of 2005, and with a 19% increase up to the third quarter of 2006. Knight Frank’s head of residential research Liam Bailey has described Bulgaria as "one of the big winners" in capital growth since 2000. In addition to this, Bulgaria was found to have the second highest level of house price growth throughout Central and South Eastern Europe in 2006, according to the Royal Institute of Chartered Surveyors' ‘European Housing Review 2007’, figures that have been welcomed by investors in Bulgarian property and that bode extremely well for capital growth over the coming years.
Property Buying Guide
A non-Bulgarian national is currently not permitted to own land in Bulgaria, therefore it is still necessary to form a Bulgarian limited company that can own land.
When you have decided on a property in Bulgaria you will need to make a verbal offer through your agent for acceptance by the vendor. Once this is done, negotiations will proceed. At this stage a lawyer should be appointed by you to formalise the agreement.
The preliminary contract of sale will be drawn up by your lawyer, at which stage the purchaser will be expected to pay a 10% deposit.
The lawyer will conduct the necessary checks on title documents, licenses and permissions, debts on title, and terms of contract.
The buyer must pay the balance of the purchase price as well as land tax and the relevant fees, amounting to around 5% of the purchase price. On payment of these costs, the property will legally belong to the buyer.
Costs of a standard property purchase in Bulgaria include the following:
State tax is 2%.
The notary fee is calculated using the price in the title deed.
Land registry costs 0.1% of the value.
Legal fees are likely to amount to 1% of property value in most cases.
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