Buying real estate in Bulgaria as a foreigner?

We've created a guide to help you avoid pitfalls, save time, and make the best long-term investment possible.

Buying property in Bulgaria as a foreigner: a full guide

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buying property foreigner Bulgaria

Everything you need to know is included in our Bulgaria Property Pack

Bulgaria is a popular destination for foreigners who want to invest in real estate.

It has stunning landscapes, a strong cultural identity, and welcoming people. But purchasing property in a foreign country can be complicated, especially when it comes to the laws and regulations.

This guide is here to help foreign buyers understand how the property market works in Bulgaria. It covers everything you need to know in a straightforward and comprehensible way.

Also, for a more in-depth analysis, you can check our property pack for Bulgaria.

Can you purchase and own a property in Bulgaria as a foreigner?

If you are American, we have a dedicated blog post regarding the property buying and owning process in Bulgaria for US citizens.

Foreigners interested in buying real estate in Bulgaria should be aware of several key points that define their rights and limitations compared to local citizens.

Firstly, as a foreigner, you can indeed purchase property in Bulgaria, such as apartments, houses, and commercial spaces. However, when it comes to owning land, there are restrictions.

Generally, non-Bulgarian citizens are not allowed to own land directly. But there's a common workaround, setting up a Bulgarian company, which can then own the land. This is a legal and widely used method.

The rights of foreign property owners in Bulgaria are largely similar to those of local citizens once the property is acquired. You have the right to sell, rent, or renovate the property within the bounds of Bulgarian law.

There are no specific rules that differentiate based on your country of origin within the European Union (EU).

However, for non-EU citizens, the process might involve more scrutiny, and the rules can be slightly different, particularly concerning residential status and long-term stays.

Residency in Bulgaria is not a prerequisite for buying property. You don’t need to live in Bulgaria to own property there. This makes it an attractive option for investors or those looking for holiday homes.

Regarding visas and permits, buying property in Bulgaria doesn’t automatically grant you a right to reside in the country. If you're planning to stay longer, you’ll need to apply for the appropriate visa or residency permit according to your circumstances and intentions.

Governmental authorization is not typically required for the purchase of most properties.

However, certain types of property, such as historical buildings or land in protected areas, might require additional approvals.

As for the minimum investment, there isn’t a universally set figure. The investment depends largely on the location and type of property you’re interested in. Urban areas like Sofia, Varna, and Burgas might have higher property prices compared to rural areas.

Can you become a resident in Bulgaria by owning a property?

Gaining residency in Bulgaria through real estate investment is a topic of interest for many foreigners.

While Bulgaria does offer residency options linked to investment, it's important to understand the specifics and requirements of these schemes.

Firstly, there is a residency-by-investment program in Bulgaria, but it's not as straightforward as merely purchasing a property.

This program typically involves a more substantial investment in the country's economy, which can include real estate investment but usually requires additional forms of investment as well.

To qualify for residency under this program, you generally need to make a significant investment. The exact amount can vary, but it's usually a substantial figure, often exceeding several hundred thousand euros.

This investment might need to be in specific sectors or meet certain criteria set by the Bulgarian government.

Once you make this qualifying investment, you can apply for a special type of visa, leading to a residency permit. This process involves submitting various documents, including proof of investment, a clean criminal record, and financial self-sufficiency.

The exact requirements can vary and might be subject to change, so it's crucial to consult current regulations or a legal expert.

Regarding the number of people who have used this scheme, detailed statistics are not readily available without web browsing.

However, it's worth noting that these programs are generally used by a relatively small number of individuals due to the high investment threshold.

The initial residency granted through this scheme is usually temporary, often for a period of one year, which can then be renewed.

After a certain period, which typically spans several years, you may be eligible to apply for permanent residency. This usually requires continuous residency in Bulgaria and maintaining your investment.

As for citizenship, having residency does open a pathway to eventually apply for Bulgarian citizenship, but this is a separate process with its own set of requirements.

It typically involves a longer period of continuous residence, a demonstration of integration into Bulgarian society, language proficiency, and a clean legal record.

Thinking of buying real estate in Bulgaria?

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Market indicators

You can find fresh and updated data in our pack of documents related to the real estate market in Bulgaria.

By examining the the the GDP per capita indicator, we can deduct that Bulgarian people have become 20.8% richer over the course of last 5 years.

If you're a real estate investor, it's (very) good news. The growth in population wealth can potentially generate higher demand for real estate, thereby driving up prices in the foreseeable future.

The platform Numbeo indicates us that rental properties in Bulgaria offer rental yields between 3.2% and 5.9%.

While they may not provide significant profitability, these moderate yields offer stability and a steady income stream over time.

To know more, you can also read our dedicated article: is it a good time to buy a property in Bulgaria?

The life as an expat

Life as an expat in Bulgaria can be very rewarding.

The country is known for its welcoming and hospitable culture, which makes it a great place to live and settle down. The cost of living is also quite low, which makes it an attractive destination for those looking to save money while living abroad.

The country also offers a wide range of activities and attractions, from museums and galleries to outdoor activities like hiking and skiing.

Additionally, Bulgaria is known for its rich culture and history, which makes it an ideal place to explore and learn more about the region.

All in all, life as an expat in Bulgaria can be a great experience.

What are the best places to buy real estate in Bulgaria?

This table summarizes some of the best places to buy a property in Bulgaria.

City / Region Population Average Price per sqm (BGN) Strengths
Sofia ≈ 1.2 million 1,500 - 3,500 Capital city, cultural center, employment opportunities, vibrant city life
Plovdiv ≈ 350,000 1,200 - 2,800 Historic city, European Capital of Culture 2019, thriving art scene
Varna ≈ 350,000 1,800 - 3,500 Coastal city, beautiful beaches, summer resorts, maritime activities
Burgas ≈ 200,000 1,500 - 3,000 Sea port, seaside resorts, natural attractions, vibrant summer festivals
Ruse ≈ 150,000 1,200 - 2,500 European city on the Danube River, historic architecture, cultural events
Veliko Tarnovo ≈ 70,000 1,000 - 2,500 Medieval capital, cultural heritage, scenic landscapes, historical sites
Bansko ≈ 10,000 1,500 - 3,000 Ski resort town, mountain views, winter sports, hot springs

Do you need a lawyer when buying a property in Bulgaria?

When purchasing a property in Bulgaria, engaging a local lawyer can provide valuable assistance in navigating the legal aspects and ensuring a successful transaction.

One crucial document they can help you with is the Preliminary Contract (Predvaritelen Dogovor), which is a legally binding agreement between the buyer and seller, outlining the terms and conditions of the sale.

The Bulgarian lawyer can also assist with conducting a Title Search (Izvod ot Kadastrovata Agencia) to verify the property's ownership status and identify any potential legal issues or encumbrances.

Moreover, they can guide you through the process of obtaining necessary permits and approvals, such as approval from the local municipality.

They will ensure that all applicable taxes and fees, such as the Property Transfer Tax and Notary Fees, are paid correctly and in compliance with Bulgarian laws and regulations.

What are the risks when buying a property in Bulgaria?

We've got an article dedicated to the risks associated with purchasing property in Bulgaria.

One of the main risks when buying a property in Bulgaria is the risk of purchasing property that is not fully legal. This can be due to a number of factors, such as the property not being properly registered with the relevant authorities, or not having the correct building permits.

Another risk is the possibility of fraudulent activity when buying a property in Bulgaria, as Bulgaria is a country with a high level of corruption. It is important to ensure that all paperwork is in order, and that you understand the process of purchasing a property in Bulgaria.

A third risk is that of purchasing a property that is not properly maintained. There is a risk of purchasing a property that is in poor condition, either due to the age of the building or due to inadequate maintenance. It is important to thoroughly inspect the property before purchase in order to avoid any unforeseen costs.

Finally, there is a risk of purchasing a property that is overpriced. This is due to the fact that the property market in Bulgaria is not as mature as in other countries, and prices can be affected by the local political climate, as well as the economic situation in the country.

real estate Bulgaria

Everything you need to know is included in our Bulgaria Property Pack

What are the documents needed for a real estate transaction in Bulgaria?

When purchasing property in Bulgaria, the following documents are required:

1. A valid form of identification, such as a passport or identity card;

2. Proof of address;

3. Proof of financial resources;

4. A contract of sale;

5. A certificate of title;

6. An extract from the cadastre;

7. A certificate of ownership;

8. A tax declaration;

9. A notarized power of attorney, if applicable;

10. A certificate of compliance with the applicable building regulations.

We review each of these documents and tell you how to use them in our property pack for Bulgaria.

What strategies can you employ for successful negotiation with Bulgarians?

When entering property negotiations in Bulgaria, it's crucial to consider the key aspects of Bulgarian culture that can shape the process.

Bulgarians highly value personal relationships and trust-building. Taking the time to forge connections and showing respect for local customs can significantly influence negotiation outcomes.

Hospitality is deeply ingrained in Bulgarian culture, with the tradition of offering refreshments and engaging in friendly conversation during meetings. Embracing these gestures and expressing gratitude can create a positive negotiation environment.

Patience is a virtue in Bulgarian negotiations, as decision-making processes may be deliberate and time-consuming. Demonstrating patience, flexibility, and a willingness to engage in thorough discussions can contribute to successful outcomes.

Bulgarians prefer indirect communication and politeness. Using courteous language, maintaining a respectful tone, and navigating negotiations diplomatically are important. Avoiding confrontations and embracing tactfulness can establish a harmonious negotiation atmosphere.

Lastly, understanding the local real estate market, legal procedures, and regulations is vital. Conducting comprehensive research, seeking guidance from local experts, and staying well-informed about market conditions will empower you to negotiate effectively and navigate the property transaction process smoothly in Bulgaria.

Can foreigners get a mortgage in Bulgaria?

Foreigners can get property loans in Bulgaria, but the eligibility criteria and requirements vary depending on the lender and loan terms.

The specific conditions and requirements for a foreigner to obtain a property loan in Bulgaria may vary, but typically they need to have a valid residence permit, provide necessary documentation, such as proof of income and identity, and fulfill the criteria of the lending institutions in the country.

Some banks in Bulgaria that can grant mortgages to foreigners include UniCredit Bulbank, Raiffeisenbank Bulgaria, and DSK Bank.

Additionally, mortgage rates in Bulgaria for a 20-year term range from 1% to 5%, which are considered highly favorable.

What are the taxes related to a property transaction in Bulgaria?

Here is a breakdown of taxes related to a property transaction in Bulgaria.

Tax Description Calculation Who pays
Property Tax An annual tax on real estate property 0.15% of the tax evaluation ( the value of the property as estimated by the state body) of the property Owner
Property Transfer Tax A tax on the transfer of ownership 0.1% to 3% of the property’s purchase price or tax assessment, whichever is higher Buyer
Capital Gains Tax Tax on the profit from the sale of the property 10% on the net capital gain (the difference between sale price and cost) Seller
Value Added Tax (VAT) Applied to the sale of commercial buildings 20% of the sale price of the real estate Buyer

For a more detailed calculation, refer to:
- the CMS Law's website
- the Bolgarskiy Dom's website
- the Kirilova Law's website

What fees are involved in a property transaction in Bulgaria?

Below is a simple breakdown of fees for a property transaction in Bulgaria.

Fee Description Calculation Who pays
Notary Fees Fees for notarizing property-related documents about 0.1% to 1.5% of the property's value Buyer
Property Registration Fee Fee for registering the property with the Land Registry 0.1% of the property's value Buyer
Real Estate Agent Fee Applicable if a real estate agency is involved From 2.5% to 3% of purchase price, depending on the type of property and the overall purchase price Buyer or Seller
Legal Fees Fees for legal assistance in the property transfer process Varies depending on the agreement between the buyer and the lawyer Buyer

You can find more information about the calculation on:
- the Law Firm Bulgaria's website
- the Law Firm Bulgaria's website
- the Law Firm Bulgaria's website

Buying real estate in Bulgaria can be risky

An increasing number of foreign investors are showing interest in Bulgaria. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.

buying property foreigner Bulgaria