About Bulgaria

Living There 

One of the strongest attractions of Bulgaria, aside from its stunning scenery, is the fact that the cost of living and property in Bulgaria is very affordable. With the economy diversifying into more sectors, job opportunities are also increasing which is attracting more people to settle down in the country. With the state healthcare system gradually improving, living in Bulgaria is en route to becoming an irresistible option for many. The weather in Bulgaria is temperate with cool, damp winters and very hot, dry summers. 

Economy 

Industry is key to the Bulgarian economy. The country is a major producer of electricity and the most important exporter in the region. Electronics and electrical equipment production have shown considerable development and agricultural production has also increased over the last year, giving a powerful boost to the economy. 

Politics 

The Republic of Bulgaria operates as a parliamentary representative democratic republic. The Council of Ministers (the principal body of the executive branch) is chaired by the Prime Minister who receives the mandate of the President to form a cabinet. Executive power is exercised by the government. Legislative power is vested in both the government and the National Assembly. Bulgaria has 28 provinces, each headed by a provincial governor appointed by the government. Within this there are 263 municipalities.

Buying Guide and Process
 
Owing to Bulgaria’s ever-increasing popularity with property investors and its relatively recent accession into the EU, the buying process there is becoming easier and easier. The changes that EU membership has brought for property buyers, however, won’t take effect until 7 years into Bulgaria’s membership (i.e. 2014) meaning that foreign nationals cannot currently acquire freehold land directly (they may, however, own apartments, condominiums, etc). This means that foreigners wishing to purchase property in Bulgaria must still do so though the formation of a limited company which is a straightforward process and doesn’t really provide any bar to the buying process.

Investment Facts and Guide 

Real estate prices in Bulgaria are far lower than other destinations in Europe. The acceptance of Bulgaria into the European Union will certainly boost property prices in the near future. The Bulgarian market is still relatively unexplored which makes it a lucrative prospect for investors. Sofia’s Ivan Vazov district now leads property prices followed by Lozenets. 

Price per Square Metre 

Due to the seaside real estate boom, the port city of Varna has the highest prices at BGN 1,710 (US $1,198) per square metre. Sofia ranks second with an average price of BGN 1,648 (US $1,154) per square metre. Bulgaria's Black Sea port of Burgas, Plovdiv (the country's second biggest city), the Danube town of Russe, and Stara Zagora are the cities where residential real estate sells for more than BGN 1,000 (US $700) per square metre. 

Rental Yields 

Rental properties in central Sofia can cost you around €57,500 (US $40,290) to €240,000 (US $168,000), depending on the size of the property. Gross rental yields in central Sofia range from 10 to 10.8%, while similar properties in the suburbs have slightly lower yields at 7.7 to 9.4%.

Rental Income Tax 

Rental income is subject to a 15% withholding tax after deducting allowable expenses such as mortgage interest etc. However, if the purchaser wishes to make a donation to a charity such as a hospital, education establishment, culture, or sports institution, the purchaser is subject to only 10% taxation. 

Capital Gains Tax 

Non-residents in Bulgaria are subject to 15% withholding tax on the net gains received from the sale of real estate. Properties owned for more than five years are not taxable.
Properties which have served as primary residence for at least three years are exempt from Capital Gains Tax. Properties owned for more than five years are also not taxable.