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Owning property in Bulgaria

After Jan 2012, EU citizens are allowed to own regulated land property on their personal names. This post aims at informing the property buyers what they are obliged to do after they actually purchase the regulated land and/or house

  • Bulstat registration of property owners

The first thing the first-time buyer needs to do is to register themselves in the Bulstat Register.  The obligatory term for Bulstat registration is 7 days as of the moment the title deed is handed by the notary to the property owner or to a proxy. If the registration is not done within the aforesaid term, the property owner will be sanctioned with a fine by the Bulstat Register.

The Bulstat Register is part of the Registry Agency. The Bulstat registration is done in the local office of the Agency, where the property is located and it is done  for first time buyers only! Once you have bought a Bulgarian property on your name and have registered with Bulstat Register, you don’t need to register again.

Bulstat register is a statistics authority which tracks different types of information. In this case, the main goal is to count and collect information of the EU citizens who have bought real estate in Bulgaria.

  • City Council Tax Declaration of property

The next legal action is a property buyer needs to declare in the local municipality is that he owns the property. If this is not done, the outstanding taxes would still be assigned to the old property owner.

This declaration has to be brought in within 2 months after the title deed for the purchase is signed. If this deadline is missed, the municipality will impose sanctions (fines and interest) on the new owner.

The declaration of the property has three main goals:

  1. The municipality is now aware that the property has new owner
  2. The owner declares the type of the property, it’s area, construction type etc.
  3. The municipality calculates the tax value of the property based on the declared facts and defines the annual property tax and garbage fee

Having the above information, the local council sends  annual letters (usually in the beginning of the year) with the outstanding amounts for local property tax and garbage fee. Some municipalities provide online check (e.g. Samokov) where a person just has to sign up with his Bulstat number and can see the information without waiting for postal notice or calling the local tax office.

If the  declaration hasn’t been done, or the outstanding money hasn’t been paid, the municipality charges interest on the unpaid amounts.  A recent trend is that the municipalities use law enforcement agents to collect all these debts. Hiring an enforcement agents increases the amount with legal costs and is a threat to foreigners who don’t live in Bulgaria, because the property can be put on public tender and sold in order the council debt to be covered.

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Bulgarian property market trends

Bulgarian property prices have dropped by almost 50 pc since the beginning of the financial crisis, say realtors. Bulgarian houses and apartments are sold at low prices. This why most buyers who waited for the prices to come down, are buying now. Even in August, a month that seems to be slow for the property market, there are plenty of buyers. These are generally people who have waited for the prices to drop enough, so they could invest their savings in larger and cheaper housing.

For the Bulgarian capital and the larger Bulgarian cities and towns the average sale prices of Bulgaria homes have fallen by about 20 Euros per square meter since the beginning of this year. Most sought-after are one-bedroom apartments within the price range of 35,000 to 45,000 Euros, however buyers struggle to find good properties within this price range, especially when they are looking for newly-built properties.

Rental prices are not expected to go up, agents predict. Even though August and September are the most lively months on the rental market (especially for apartments in Bulgaria), the supply of rentals exceeds the demand. In Sofia, for example, properties close to the newly-built metro stations are more attractive than the old apartments in the centre.

Since 2008 the rental prices have declined by a third and are not expected to go up, experts predict. This is due to the fact that alongside the old apartments in the centre and other residential areas, newly-built apartments, bought during the recession namely because of their investment potential, are also offered on the market.

And in recent months, buyers and renters express their preference towards new buildings close to transport links, areas with low crime rate and local amenities, such as schools and kindergartens.

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Food chains most active in the commercial property market in Bulgaria

Cafes, restaurants and food chains are the type of businesses that have been moving the Bulgarian commercial property market in the last six months. The expansion of grocery stores and restaurants is also directed to commercial streets and at shopping malls, says in a Bulgarian retail market report for the first half of the year.

Banks and mobile network providers are also active on the market, but their activity is not due to their expansion, but rather to the optimization of costs and relocation, the report said.
There have not been any surprises in the market for commercial properties in Bulgaria for the first half of the year. Due to high levels of unemployment and the free space in modern shopping centres, the market continues to be rental-oriented, experts indicate.
Although rental rates have stabilized in recent months, the high competition in the market is expressed in different bonuses for tenants, such as gratis periods when they don’t have to pay rent.
In the first half, the average rental price for retail space in Sofia have fallen by 12% to about 28 Euros per square meter and by 16% to 12-16 Euros per square meter in other Bulgarian cities.
The price drop is mainly caused by the fact that many traders were able to renegotiate the rents for the areas used, due to increasing competition in the market, says the report.
Currently, there are 21 modern shopping centers  in Bulgaria and five retail parks with a total lettable area of 680k sqm. There are 9 malls under construction, and for Sofia only this lettable commercial space is expected to grow with another 180k sqm by the end of this year.
Next year in Sofia, the market will grow with additional 93k sqm of retail space in shopping malls. So for  every 1 000 people in the capital there will be more than 300 sqm of modern retail space. The country average for retail space per 1 000 people of the  population will be a little less than 100 sqm, if all construction projects are completed on time.

For commercial properties for sale in Bulgaria, mainly in the Veliko Tarnovo area, please feel free to have a look at our catalogue.