Bulgaria is a new property market for British investors. Moreover, the country is constantly becoming one of the most popular tourist destinations # for British holiday makers. People in Britain say that Bulgaria at the moment is what Spain used to be for Brits more than ten years ago. The eastern European state is developing rapidly and attracts more and more investors from all over the Old Continent. However, British investors and holiday makers comprise a great part of the so called New Bulgarian Phenomenon. The Balkan country is scheduled to become full member of the European Union by 1 January 2007. That is why property experts in Bulgaria and Britain say: “Now is the time to invest because in few years time the return on investments will be double and even triple”

The market of Black Sea coastal real estate has grown significantly since the beginning of year 2003. The residential property market in the big cities along the Black Sea coast has grown notably too. During the last year demand was higher than supply, due on one hand to the increased supply of mortgage loans and on the other to consistent migration of workforce from inland to sea resorts and big coastal cities like Varna and Bourgas.

According to the National Statistical Institute of Bulgaria, the quarterly real estate prices growth rate is 12.5%. Sofia, the Bulgarian capital city, is the most expensive real estate market, followed by the coastal areas.

Despite of the Bulgarian property boom potential real estate buyers find it difficult to make their own way through the whole process of buying a house, villa, apartment, land, etc. There are few British-based companies which are able to offer such services. Bulgariawise is a British-based company that specialises in property sales and lettings. We would be delighted to help you and give you an accurate advice on how to invest in Bulgaria.

There are some legal issues that you have to be aware of:

• as far as houses, villas, flats and limited ownership rights are concerned, you can directly purchase them as a person
• to buy a real estate with the land you have to set up a commercial company
• setting up a company takes about 2-4 weeks
• foreign investors can open bank accounts denominated in Bulgarian or foreign currency
• there is no limit to the company stake investors possess
• when signing preliminary contract you have to pay 10 per cent of the purchase price
• you need 5000 leva to open a Company bank account (if you have to set up a company); once the company is registered you can withdraw the money from your account;
• you need EUR10-20 to open personal account
• you need to pay to a solicitor (optional) and local Notary to sign relevant paper work
• investors have to pay taxes which vary from person to person due to factors such as your tax domicile, the extent of your business activities in Bulgaria, the nature of the property transaction, etc.
• corporate tax is levied on the transfer of real property
• 2% of the market value is paid to the municipality in which the property is located
• notary fees are paid on the higher of the market price or the book value of the real estate at varying rates
• you will be liable to pay a real property tax (the tax is equal to 0.15% of the book value of the property)
• VAT 20% (transactions with land and lease of property are exempt)