Bulgarian Properties Stagnate, New Rules May Help - Holprop.com News

Online, July 23, 2012 (Newswire.com) - Bulgaria has one of Europe's most varied landscapes, from the immense lowlands of the Danube Plains in the north, the highlands in the south and the beaches, with miles of marine grandeur of the Black Sea coast.

Bulgaria is notorious for its mineral springs, and has become a popular spa destination. Its forests are rampant with uncommon animal species. Visitors also congregate to its outstanding beaches, and to the ski resort slopes of its snow topped mountains.
The towns and cities are colourful with their old churches with priceless, religious artefacts, traditional houses, and captivating archaeological relics.

The climate in Bulgaria is as varied as its terrain, with Alpine conditions in the Rila National Park, the largest national park in Bulgaria, located about 100 km. south of Sofia. The Pirin national park has the oldest nature reserve in Bulgaria. The Balkan mountain range, also known as Stara Planina, is situated in the heart of the country, dividing it in two almost equal parts of Northern and Southern Bulgaria. Then to the typically mild climate of the Mediterranean near Macedonia in the south.
After three years of house price drops, the Bulgarian housing market has been very sluggish.

During the end of the first quarter 2012, the average price of standing apartments in Bulgaria dropped by 4.3% to Bulgaria Lev (BGN)884 (€452) per square metre , after price drops of 6.4%, 6.1% and 6.2% over the year to the previous three quarters, according to the National Statistical Institute (NSI). Property prices in Bulgaria are 38% lower than the third quarter of 2008 peak of Bulgaria Lev (BGN)1,418 (€725) per square metre.

In Sofia, the capital, the average price rose by 0.8% in the first quarter 2012 to Bulgaria Lev (BGN)1,465 (€749) per sq. m., but there was still a year on year fall of 2.1%. Compared to the housing price peak of Q3 2008, the average price in Sofia has now fallen by 38% (-41% inflation-adjusted).

A massive house price boom led prices to surge by around 300% from 2000 to 2008. However, contamination from the global financial crisis caused the Bulgarian property bubble to burst by the end of 2008.
In 2012, the Bulgarian economy is projected to slow to 0.5%, due to the debt crisis of the eurozone, so Bulgaria's housing market is anticipated to remain low in 2012.

The Good News.

Rendering to the Treaty of Accession of Bulgaria to the EU, Bulgaria was allowed to keep the prohibition for EU physical and legal persons to buy land in Bulgaria for up to 5 years for regulated land and up to 7 years for forests and agricultural land after its accession to the EU. The 5-year term has now finished and since January 1st 2012, all EU persons are allowed to buy land in Bulgaria.

This only includes Bulgarian properties such as houses with gardens, all plots that are within the borders of a settlement and apartments. For buying agricultural land and forests, EU citizens still need to register companies in Bulgaria and these limitations will be valid till January 1st 2014. The same regulation applies for citizens of countries from the European Economic Area (EEA).

For all foreign persons, who are not citizens of EU or EEA countries, the restriction to buy land or property in Bulgaria is still valid and they still need to register a limited company.
This change shared with the lower prices of properties throughout Bulgaria, makes for an attractive proposition for citizens' of all EU and EEA countries.

Before looking for your Bulgarian property it's worth bearing in mind the following tips.

• When purchasing property in Bulgaria, it is the buyer who must pay the agents commission, which can vary from between 3% and 5% of the property value.
• It is important to clarify with the agent if there is a daily charge rate for their services, as is often common practice in Bulgaria. An agent's daily charge rate can be between €50 and €100 euros a day, however, it is standard that this fee is deducted from the agents commission, should you purchase a property from them.
• Lawyers' fees usually cost approximately 1% depending on how much they are needed, but drawing up contracts and registering new ownership usually falls within this price.
• Notary fees for the witnessing of the exchange of title is approximately €300.
• Land Registry or Property Tax is 0.15% of the property value.
• State or local tax will be between 2% and 4% of the value, depending on the properties location.
• Other costs are to be considered, such as surveyors' fees and translation fees. Having said this, a good reputable agent will normally speak at least English as well, so considering their daily charges, it is to be expected that they should help as much as possible.
• Property agents are not required to be licensed in Bulgaria, so it is paramount that agents should be researched well before being hired.

Enquire as to their qualifications and respectable trading history. During the last 10 years many fly by night agents have cropped up, but with a little common sense and due diligence, it is easy to distinguish a professional.