Bulgaria has long been seen as a place to buy cheap holiday homes in places like Sunny Beach, but now many overseas property investors are looking to the cities for investment apartments.
Property prices in Bulgaria have been steadily rising for several years, the result of a growing economy and low interest rates. Across the country, prices were up 6 per cent in the third quarter of 2018, compared to the same period a year earlier, according to an index provided by Bulgaria’s National Statistical Institute.
In Sofia – Bulgaria’s capital and largest city, with about 1.2 million residents – prices were up 7 per cent in the third quarter of 2018, compared to a year earlier, and they were 36 per cent higher than during the same period in 2015, according to government data.
Most property investors in Sofia buy apartments, with prices averaging about 1,120 euros a square metre for a two-bedroom. But while Sofia has a large inventory of apartments, there aren’t many new houses, which has put a premium on those in neighbourhoods like Boyana.
Although around 80 per cent of buyers in Sophia are local, the capital has now been on the international radar for around a decade since the global financial crisis.
Most foreign buyers in Sofia are looking for apartments as an investment, with international buyers primarily from European countries like Britain, Ireland, Belgium and France, as well as neighbouring Greece, Serbia and Macedonia.
Buying Property in Bulgaria
Bulgaria, which joined the European Union in 2007, can be a complicated place for foreigners to buy property. Typically, non-citizens are allowed to own buildings, but not land, although there are exceptions for citizens of other European Union countries. Foreign buyers often set up companies to buy property.
The lev remains the official currency of Bulgaria, but its value is tied to that of the euro, as the country prepares to adopt the euro officially, and properties are routinely listed in euros.
Foreign buyers should hire an independent attorney – not connected to the listing agency or the seller – to check the property for debts and ensure that there are no loans on it.
One unusual twist to watch out for is that in Bulgaria outdoor areas like patios are often included in the calculation of the home size. As a result, the interior living area might be 15 to 20 per cent smaller than advertised.
Taxes and Fees
Buyers typically pay closing costs of 8 to 10 per cent of the sale price of a home, including local transfer taxes. Notary fees are typically 4 to 6 per cent of the property’s value. Agent commissions are usually 3 per cent.
Bulgaria seems to be an up and coming place for overseas property investors to invest in, and Sofia its most vibrant city.