Property Investment in Bulgaria
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by Brian Turner
Investing in the Bulgarian Property Market
The Bulgarian property market has been on an increase over the last few years. The prices are expected to continue to rise in 2008, although is will be less than the 30% of 2007. The potential is great in this region, particularly with the commercial and industrial property. The city of Sofia is rapidly growing and shows some of the better potential.
Many people are looking at Bulgaria for vacation investments. The region offers amazing natural amenities, including hiking and bike trails, coastline along the Black Sea, beaches, historical attractions, and skiing. The weather is also temperate.
The economy has also been playing a large roll in the increase of the property market. Tourism continues to rise, and the local, regional and national governments are all working hard to improve conditions to take advantage of the tourism dollar.
Since 2002, the annual growth of property values has been around 50%.
In Bulgaria, the property buyer pays most of the costs associated with the purchase. The transaction fees can run up to 25% of the total purchase price (and sometimes a bit more).
The property rental market tends to be stronger in the ski regions than along the coast, mainly due to the longer skiing season. Rental incomes tend to run around 6% to 12%, with the higher rates being generated by mountain properties.
Properties away from the tourist areas tend to be more rustic and need much more work. They offer little rental income (if any) and are better investments for individuals who want a second home away from the rest of the world. Typically these properties can be found for a very good bargain.
Some other wise investments would be property near one of the many mineral spas or even in some of the nicer, historic cities (like Veliko Tarnovo).
VAT – Value Added Tax is 20% of the value, after discounting fees paid for the transfer.
Municipal Tax – paid to the municipality where the property is located.
Only the purchase of structures is open to non-residents at this present time. The Bulgarian cabinet has ruled that beginning in 2014, foreigners will also be able to buy (and inherit) land.
If you desire to purchase land before 2014, you can do so by setting up a Bulgarian limited company. It will take approximately one to six weeks and can be done by an independent lawyer. It is also important that you hire a qualified accountant to look after company affairs.
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