Real estate in Bulgaria: features of purchase, taxes, prices

Bulgaria, with its warm sea, picturesque mountains, rich history, and still affordable prices, continues to attract the attention of foreign investors and real estate buyers. However, before diving into the search for the perfect home or apartment by the sea or in the mountains, it is extremely important to understand the legal specifics, financial obligations, and current market trends. This guide will highlight the key aspects of purchasing real estate in Bulgaria.

Purchase Rules for Foreigners

Citizens of the European Union (EU) and the European Economic Area (EEA) enjoy the same rights as Bulgarian citizens when purchasing real estate. They can freely buy apartments, houses, and land plots without significant restrictions. For citizens of countries outside the EU/EEA, the situation is somewhat different. They are allowed to purchase real estate in Bulgaria but under certain conditions. The purchase of land (both agricultural and forest) directly by foreigners from third countries is prohibited by the Bulgarian Constitution. However, they can own land indirectly through a Bulgarian company established specifically for this purpose. Such a company is allowed to own land, but its activities must align with its statutory objectives related to real estate.

The process of buying an apartment or house for non-EU citizens does not require setting up a company, but the land under the house must be registered in a special way, usually through a company or on a long-term lease. In all cases, the purchase of real estate by a foreigner requires obtaining permission from the Bulgarian Ministry of Justice. This is a formal procedure that usually takes about a month and is carried out after signing the preliminary purchase agreement. The notary certifying the transaction is obligated to request this permission.

Types of Real Estate and Their Features

The Bulgarian market offers a variety of real estate options, each with its own characteristics:

• Apartments in new developments: the most popular choice among foreigners, especially in resort areas (Sunny Beach, Golden Sands, Burgas, Varna) and large cities (Sofia, Plovdiv). Advantages include modern layouts, developed infrastructure (parking, pools, gyms), guarantees from the developer (though their reliability requires verification), and the ability to choose during the construction phase. Disadvantages: mandatory management and maintenance fees (so-called "management tax"), dependence on the developer's integrity, and potential hidden defects.
• Secondary market apartments: often located in more central areas or mature complexes. Main advantages: the actual condition of the property can be assessed on-site, usually lower price per square meter, established surroundings and infrastructure. Disadvantages: possible wear and tear of the building and utilities, outdated layouts, and potential difficulties with paperwork (verifying the "cleanliness" of the transaction and the property's history is critically important).
• Private houses and villas: offer maximum privacy and space. Popular in both coastal villages and foothills or rural areas.
• Land plots: of interest for building to specific needs or long-term investments.

Average Prices in Different Regions

Real estate prices in Bulgaria vary significantly depending on location, type of property, its condition, and proximity to the sea or ski resorts. The following approximate price ranges per square meter can be highlighted:

• Capital (Sofia): the highest and most stable market. Prices in the center and prestigious districts (Lozenets, Izgrev, Ivan Vazov) can reach 2000-3000 euros/sq.m and higher for new projects or high-quality renovations. In residential areas and on the secondary market, prices start from 1000-1300 euros/sq.m.
• Large coastal cities (Varna, Burgas): central areas and new complexes by the sea: 1300-2000 euros/sq.m. Slightly further from the center and the sea: 900-1400 euros/sq.m. The secondary market in older areas may offer options from 700 euros/sq.m.
• Major resorts (Sunny Beach, Golden Sands): new first-line apartments by the sea: 1800-3000+ euros/sq.m. Second-third line, less new complexes: 1200-2000 euros/sq.m. Secondary housing in older buildings: from 800 euros/sq.m.
• Small coastal towns and villages (Pomorie, Nessebar, Ravda, Sozopol, Primorsko, Kiten, etc.): new developments: 1000-1800 euros/sq.m. Secondary market: 700-1300 euros/sq.m. Prices heavily depend on proximity to the beach and infrastructure development.
• Ski resorts (Bansko, Borovets, Pamporovo): new apartments in complexes near lifts: 1200-2000 euros/sq.m. Secondary market and properties further from the slopes: 700-1300 euros/sq.m. High seasonality affects rental income.
• Inland regions, small towns, and villages: the most affordable prices. Can start from 300-500 euros/sq.m for secondary housing, but liquidity here is significantly lower, and price growth potential is modest. New developments are rare.

Associated Costs (Taxes, Notary, Commission)

When buying real estate in Bulgaria, it is necessary to budget for significant additional expenses, which can range from 6% to 15% of the purchase price:

• Notary services: notary services are mandatory for certifying the purchase agreement. Fees are set by law and calculated on a sliding scale based on the transaction price. Typically, this is 0.1% - 1.5% of the assessed property value (cadastral or market—whichever is higher), plus fixed amounts for technical services. The total amount can be approximately 1000-3000 euros, depending on the property's value.
• Registration in the Imoten Registar (Cadastre): fee for registering ownership in the Cadastre. It is 0.1% of the assessed property value but no less than 25 euros and no more than 2500 euros. Usually, this amounts to several hundred euros.
• Real estate agency commission: if the purchase is made through an agency, the commission is typically 2% to 5% of the transaction price (most often 3%). Payment terms (whether the buyer, seller, or both pay) are specified in the agency agreement.
• Property transfer tax (Municipal Tax): the main tax when purchasing. Paid by the buyer to the municipal budget. The rate is 3% of the assessed (cadastral) property value (which is usually significantly lower than the market value). This is a key expense item.
• VAT (DDC): applies ONLY when purchasing new real estate from a developer (first sale). The VAT rate in Bulgaria is 20% and is usually included in the advertised price. When buying on the secondary market, VAT is not paid.
• Legal services: it is highly recommended to hire an independent English-speaking lawyer to verify the legal cleanliness of the property (absence of encumbrances, seizures, disputes), check the seller/developer's documents, oversee the transaction, and provide tax advice. Costs vary but can range from 500 to 2000 euros.
• Apostilles and translations: if documents (powers of attorney, certificates, etc.) are prepared abroad, they may require apostilling and official translation into Bulgarian. The cost depends on the number of documents.

Price Growth Prospects and Liquidity

The Bulgarian real estate market has shown steady price growth in recent years, especially in Sofia and popular resort areas. This growth is fueled by several factors: relatively low starting prices compared to other European countries, stable demand from both locals and foreigners (especially from the EU and CIS), the development of tourist infrastructure, and general inflation. Experts predict continued moderate price growth in the medium term, especially for quality properties in prestigious locations. Market liquidity heavily depends on the type of property and its location. Apartments in Sofia, large cities, and popular first-second line resorts have high liquidity and are easier to sell or rent. Liquidity for secondary housing in small towns and rural areas, as well as properties in remote areas of resorts or zones with problematic development, is significantly lower. Properties with legal issues or in poor condition are very difficult to sell. Seasonality also affects the speed of selling resort real estate—peak activity occurs in spring-summer.

Pros and Cons of Buying Real Estate in Bulgaria

Making a decision requires a balanced assessment of all advantages and disadvantages. The undeniable pros of Bulgarian real estate include attractive prices, especially compared to Western Europe, opening opportunities for both investments and acquiring a home for vacation or permanent residence. Bulgaria offers excellent natural conditions—clean sea, mountains, mineral springs, and a mild climate. For EU citizens, purchasing is maximally simplified, while for other foreigners, although there are land restrictions, the path through a company makes investments possible. The relatively low cost of living and welcoming attitude toward foreigners add to the appeal. Stable, albeit moderate, price growth in promising areas creates potential for capital appreciation. The possibility of earning income from seasonal rentals in resorts is also a significant factor for investors. However, there are serious cons.

Bureaucratic procedures, especially for non-EU citizens (obtaining Ministry of Justice permission, setting up a company for land), require time and additional expenses. Risks associated with unscrupulous developers or sellers, as well as potential issues with the legal cleanliness of properties, make hiring an independent lawyer mandatory. The seasonality of rental income in resorts means that profitability is not uniform throughout the year. Maintenance costs (utilities, "management tax" in complexes, taxes) must be factored into the budget. Price growth potential and liquidity vary greatly depending on location—investments in depressed regions may be unpromising. The language barrier can create difficulties in communicating with local services and authorities.

Buying real estate here is not only an opportunity to invest profitably or acquire a dream home by the sea but also a chance to obtain residence in Bulgaria. However, for the deal to truly be successful, it is important to consider all legal nuances, objectively assess the risks and prospects of the property, and accurately calculate the budget, including associated expenses. The One World Migration team will help you navigate this journey with confidence—from market analysis and region selection to independent legal support and document processing. We will help you make an informed decision and choose wisely.