Channel
4
A former Communist
state, Bulgaria suffered greatly under Soviet
rule, enduring decades of neglect and under-investment
in basic infrastructure. The result is a country
playing catch up, but one that has a proud history
(the Roman amphitheater at Varna is among the
best preserved in Europe) and a beautiful Black
Sea sandy coastline where a house can be bought
for the price of an average family saloon car
in the UK.
By Gordon Miller
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The Market
"Depending on
the area, you can pick up a habitable property
at a bargain price of £20,000," says Xavier
Wiggins, managing director of newskys.com. "There
are many hot spots where Britons can look into
such as the popular Black Sea coast in towns
such as Varna and Sunny Beach, or for keen skiers
mountain towns such as Bansko and Borovets have
a lot of potential, offering quaint ski chalets."
A little over
three hours' flying time from UK airports, Bulgaria's
mountain and beach resorts have become increasingly
popular in the last few years and look set to
become ever more so when, as expected, Bulgaria
joins the European Union in 2007.
"The Bulgarian
market has been performing very well recently
and I thoroughly expect this to continue," says
David Cox of Property Frontiers. "I believe
that the stable political environment, imminent
EU membership and broad popularity of the region
make it a very safe bet and one of the more
secure investment opportunities in Eastern Europe."
In line with the
probable EU accession, house prices have risen
dramatically since the turn of the millennium,
as much as 100 per cent in many areas, and the
national average price increase in 2004 was
35 per cent. In readiness for the influx of
foreigners to its shores, the Bulgarian government
has put in place proposals to relax non-national
property ownership laws, enabling foreigners
to buy land and property quickly and easily.
"At present, to
buy a property in this Balkan country you need
to set up a company at the cost of approx £600," says
Wiggins. "It should only take a few weeks to
do and a Bulgarian estate agent can undertake
the process on your behalf, enabling you to
buy and sell in the Bulgarian property market."
However, while
ownership laws are changing, be aware that bureaucracy
is notoriously slow, meaning deeds and so on
can take a seeming eternity to arrive, and there
is an unofficial two-tier buying system: one
price for locals and one for foreigners. Even
so, with 'foreigner's prices' starting around £5,000
for a two-bedroom apartment in some parts of
the country, Bulgaria offers great opportunities
and investment potential.
"The best investment
opportunities in the country at the moment include
Bansko in the mountains, Sunny Beach, Varna
and Bourgas on the Black Sea coast," says Cox. "Beyond
the tourist resorts, I am confident that the
capital, Sofia, presents a great opportunity.
Properties are very undervalued and the city
is developing rapidly as a commercial centre,
meaning both capital appreciation and rental
yields (through year round tenants) should be
very strong in future."
Picture -Huge
house or hotel £42,000 It has 2 storeys
plus penthouse, 13 rooms and one big dining
room. - 8 km from Tryavna , central Bulgaria
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Bulgaria has changed
swiftly over the last decade, though in the
villages you can still find people who rode
their donkey to work! Urban Bulgaria, especially
Sofia is much changed, and there is plenty to
offer to tourists. The ski and beach resorts
are incredibly cheap, and there is plenty of
the country's picturesque landscape to see.
With its dramatic mountains, haven-like monasteries,
churches, mosques, Roman and Byzantine ruins
there is lots to take in. The culture and history
is apparent throughout the country, but it also
has a distinct modern feel with plenty of restaurants,
cafes and bars.
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Bourgas
Bourgas is the
fourth largest city in Bulgaria, situated in
the south-eastern part of the country. It is
not only an important industrial centre in the
country, but also has considerable resources
for tourism. What attracts people here is the
crystal-clear sea. The city is a starting point
for visiting the seaside resorts in the area.
Art and culture, together with propagation of
cultural values is fostered by 7 state-owned
and 11 municipal institutes. There are many
bars, cafes and restaurants to keep you entertained,
while many of the hotels offer watersports.
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Plovdiv
Plovdiv is the
second largest city in Bulgaria, situated on
the Maritsa River. Its unique location on these
ancient crossroads has stimulated strong cultural
and political influences from East and West
civilisations, and yet maintained its unique
cultural identity. A picturesque town, Plovdiv
has many parks and gardens, museums and monuments.
Its Old Town has an imposing open-air museum
situated in the three hills of the ancient Trimontium.
One of the most remarkable parts of the town,
the ancient theatre is located there and is
still used for performances. There is no denying
that Plovdiv is a cultural hot spot!
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Sofia
Downtown Sofia
is one of the most amazing surprises you will
find in Europe today! Full of bars, shops, nightclubs,
beer pubs and discos, this is the place to party!
However, wherever you go to in Sofia you are
sure to find a wide array of bars, cafes and
restaurants. The prices for food and drink is
very low, so it is a great place if you're on
a budget or looking for value for money. Bulgarian
cuisine must be sampled: a variation of the
Mediterranean culinary establishment. When it
comes to shopping remember the name 'Vitosha'
street, since this is the busiest avenue and
a main vessel for the retail business in Sofia.
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Varna
The gem of the
Bulgarian Black Sea is situated at the end of
the big Varna Bay, with a convenient and well
conserved water area. The city's peculiar sea
charm is sublime and moving. Ancient, medieval,
renaissance and modern cultures mingle and coexist
throughout the city. During the holiday season,
July and August, the sunshine allows 10-11 hours
of sunbathing. There is nothing of the cold
Baltic wind or the summer Riviera heat. The
sea is amazingly calm and free of dangerous
tides. Apart from the beach resort, Varna rivals
the great cities of Sofia and Plovdiv in its
offering of cultural attractions and historical
buildings, museums and art galleries.
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Buyer's Guide
At present, although
the law is set to change by the end of March
2005, a non-Bulgarian national is not permitted
to own land in Bulgaria. Therefore, for almost
all property purchases it is necessary to form
a limited company that can own land and register
yourself as a company director. Forming a limited
company, through a solicitor is straightforward,
taking around four weeks and costing £700.
On purchasing
a property in Bulgaria it is common practice
for the buyer and seller to split the estate
agent's fees 50/50. A typical total percentage
will be approximately 6% of the purchase price.
On occasion, the buyer may be expected to pay
the whole fee - so be sure to clarify who pays
what before making an offer.
On agreement to
buy a property the purchaser should instruct
an English-speaking local lawyer - the estate
agent will usually recommend one to you if you
do not have one appointed or contact the UK
law society www.lawsociety.org.uk - who will
draw up a preliminary contract of sale at which
stage the buyer will be expected to lodge a
10% deposit. The lawyer will then check the
property's title and assuming everything is
in order, the balance of the purchase price,
land tax and notary fees, amounting to approx
5% of the purchase price, fall due for payment.
Once paid, the property is legally yours.
| One of
Bulgaria's beautiful baches |
VAT is generally
exempt in transactions involving land and lease
of property for residential purposes. However,
levied at 20%, it pays to ask the agent if the
property is exempt or if VAT is chargeable if
it is included in the purchase price.
Should you rent
out the property, tax on the income is payable
at 15%, and if at later date you decide to sell
the property Capital Gains Tax on any profit
between the purchase and sale price is charged
at 15%.
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