Bulgaria property news and articles

There are two broad definitions of land in Bulgaria: unregulated and regulated. Unregulated land is land that has strict control over its use and what can be built on it. In most cases unregulated land is used for agricultural purposes, and only buildings associated with this sector are permitted to be built. It is possible to change the status of unregulated land, but the process is complex and takes up to ю months to complete. An EU citizen or company is now permitted to own agricultural land as long as they are agricultural producers and are carrying out agricultural activities.

You may be considering adding your children as co-owners of your property in Bulgaria at the time of purchase, to save inheritance tax when you die. On your death you would only own, say, one-fifth of the property rather than one half, and only that part will be taxable. This only works sensibly if they are over 18. Of course there are drawbacks.

At present time, most people currently buying a property with land in Bulgaria still do so via a company-irrespective of the new rights of EU citizens.

The company is owned by the shareholders (you) and the company owns the property. It is a perfectly legal procedure and costs a bout €300-750 (£200-500) to register the company (including all the state taxes and legal fees).There can be more than one shareholder. You will have to decide on a name for the company, deposit in a bank at least 3,500 leva (€1,800) as initial start-up capital (the bank account is called a capital-raising account), sign many documents and wait about two weeks for the process to be completed. Your lawyer or estate agent would be able to arrange this on your behalf in your absence by using power of attorney.

Until recently, Bulgarian banks would only lend to Bulgarian citizens, but recently these restrictions have been relaxed. Not all Bulgarian banks will lend to foreign citizens, however, so you will have to shop around. Bulgarian Mortgages are not generally available if you are buying land alone. You might decide to use the services of a local mortgage broker, who can assist with the process of applying for and finalizing of the mortgage.

In these days of low interest rates, many more people take out a mortgage in order to buy a property abroad. If the property is viewed simply as an investment, a mortgage allows you to increase your benefit from the capital growth of property by leveraging the property investment. If you buy a house for €200,000 and it increases in value by €50,000, it has yielded a 25 per cent return on your investment. If you had only put in €50,000 of your own money and borrowed the other €150,000, then the increase in value represents a return of 100 percent on your investment. As long as the rate of increase in the value of the property is more than the mortgage rate or costs, you have gained.

Building Swimming Pool in your Bulgarian property

Swimming pools are popular in Bulgaria, providing relief from the long, hot summers and increasing the desirability of a property for letting. Before you decide to invest in one, however, it might be worth checking out if there is one nearby that you can use instead. Many restaurant complexes have a pool and the admission price is often very low (and in some instances free).

As mentioned previously, the cost of building works in Bulgaria is higher than people initially expect, and prices are set to increase further. What follows is a breakdown of some of the current costs to carry out works in the VelikoTurnovo region. You will find that in other regions, such as Sofia and along the coast, prices will be higher. These prices have been provided by Best Bulgarian Properties Ltd.

Perhaps you have bought a plot of land in Bulgaria without a dwelling on it or the property requires so much work as to make Bulgarian property renovation impracticable. In this instance a new build property will often be a better solution than messing with an existing building – and sometimes cheaper. If this scenario might apply, try to take the decision early – possibly by inviting a qualified Bulgarian surveyor, or at least some experienced Bulgarian builders, to assess the structure – rather than after a month of hacking out rotten supporting beams!

Types of land in Bulgaria

There are a few types of plots that you can buy in Bulgaria :

1. Regulated land in Bulgaria – this is a plot of land located within the boundaries of a village or a town. Such plots could be allocated for building a residential building, sport and recreation buildings, industrial buildings or green areas. In order to draw architect plans and start building on such plot all you need to have is a visa from the municipality. In the visa the architect will see the limitations for the specific plot which were given by the municipality.

Whether you decide to use a Bulgarian project management company to act as your representative or approach building contractors in Bulgaria directly, you will have to sign a contract with a Bulgarian builder. The contract should describe the obligations of both parties and the payment scheme. There should also be penalty clauses for delays in construction (although it should be pointed out that the normal penalties are not much of a deterrent for delayed work).