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General country information
of the Balkan Peninsular, Bulgaria lies at
the crossroads of Europe and Asia. A small
country, it has a varied and picturesque landscape
that embraces ski resorts and a Black sea coastline
stretching approximately 200 miles between
Romania and Turkey.
Bulgaria has land borders with Greece, the
former Yugoslav Republic of Macedonia, Romania,
Serbia and Montenegro, and Turkey. The climate
is temperate with cold, damp winters and
hot, dry summers. Natural hazards include
the possibility of earthquakes and landslides.
The largest and most developed of the Bulgarian ski resorts is Bansko. It has recently held legs of the European Ski Championships, and the ski facilities are both state of the art and much more expansive than in the smaller resorts of Borovetz and Pamporovo.
Bulgaria now has a free market economy.
Largely agricultural, the country is an
exporter of wine, vegetables, fruits, and
tobacco. It is also known for its yogurt.
After a setback in 1996, the economy has
been growing in recent years. A 2002 EU report
said this was likely to continue, but at
a slower rate the an the near 6 per cent
achieved in 2000.
It identified the main problems for the
Bulgarian economy as high unemployment, low
domestic investment and high public debt.
Nevertheless, the commitment by the Bulgarian
government to tight fiscal control and to
structural reforms would open up opportunities
for a strong growth in future years, it concluded.
early 2007 Bulgaria was granted membership into the EU, since
when the economy received a significant boost.
Property prices are still relatively low
but have been rising fast. The International
Real Estate Federation put the December
2004 average price of residential property
at £6,650 per square metre in London
but only £280 in Bulgaria’s
capital city Sophia. Black Sea resort properties
came in at between £105 and £350
per square metre while the average annual
price rise was put at 23 per cent.
recently it has forecast ‘double
digit’ the price increases this year
with a slow down in 2007, followed by one
year of ‘wait and see’.
In order to own the land as well as the apartment that sits upon it, a foreigner can buy the property through a non-trading shell company. The cost for setting up a shell company is approximately 500 Euros.
property purchase taxes are much more attractive to an investor
than in most other countries. The total property purchase
costs are 2.34% of the property (compared to much higher percentages
in France, Italy, Spain etc.) This 2.34% includes land tax,
notary fees and local tax (stamp duty). Lawyers fees cost
in the region of 1300 euros.
The purchase process
usually involves an initial deposit followed
by exchange of
contract and payment of a further deposit
of between 10 per cent and 30 per cent.
Transfer documents are then signed in front
of a Bulgarian Notary (this can be done
overseas in a Bulgarian Embassy).
fees are paid on a scale based on the higher
of the market
price or the book
value of the property at varying rates. The
maximum is £1,225. In addition, 2 per
cent of the market value of the property
must be paid to the local municipality.
Net rental income, after expenses and municipal
taxes, is subject to a 10 per cent deduction. The net
amount may be repatriated by overseas property
owners, subject to presentation of a certificate
confirming taxes have been paid. Realised
capital gains are treated as income.
annual property taxes 0.15 of the declared
value of the property – the
tax estimation price is that written into
the transfer deed but is often lower than
the actual purchase price.