LM Legal Services Blog

This year the citizens of Sofia and the companies based in the Bulgarian capital must think twice before deciding to delay payment of their property tax. Sofia Municipality has focused on collecting debt from individual tax payers whose unpaid property tax exceeds 1000 levs and from companies owing more than 50 000 levs. Until now the emphasis was on collecting tax from the large debtors. Only in 2011 Sofia Municipality has collected more than 90 million levs of old debts which was an increase by 20% in comparison with 2010. The largest debtors were the Chief Mufti with 629 000 levs, Sofia Outlet Centre with 579 000 levs and Limex City with 267 144 levs.

The prices of large properties in Sofia have dropped sharply. Only in the area of Oborishte where the most expensive properties in the capital are located, prices have increased by 4% and start at 923 Euros/sq.m. , reaching 4331 Euros/sq.m. At the same time in the affluent area of Lozenets the property prices have dropped by more than 1/5 in the last two years. The lowest price there is of 816 Euros/sq.m. The most serious price drop – of 23% – in the expensive areas of Sofia is in Beli Brezi. More than 700 apartments located in affluent central areas of the city have been put on the market.

After its accession into the EU in 2007 Bulgaria had the right to keep in force its existing laws concerning the purchase of a second property by citizens of EU member states and citizens of states signatories to the European Economic Area Agreement (EEAA) for five years.

This term has practically expired on 1 January 2012.

Those citizens of EU member states and citizens of states signatories to the European Economic Area Agreement (EEAA) who legally reside in Bulgaria are in theory excluded from the above rule.

Concerning the purchase of agricultural land, forests and forestry land by citizens of EU member states and citizens of states signatories to the European Economic Area Agreement (EEAA) Bulgarian laws preceding the accession into the E.U. should be in force for seven years after the accession of the country into the E.U., i.e. until 1 January 2014.
The above restriction does not hypothetically apply to self-employed farmers and agricultural producers, who are citizens of EU member states and who would like to settle in Bulgaria. They should be treated like Bulgarian citizens concerning purchasing all types of property in the country.
For your reference please look at the text The Treaty of Accession 2005:

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:157:0104:0128:EN:PDF

The Daily Telegraph has published the ranking of The Global Property Guide Europe’s Top Places to Invest in Property. The Bulgarian capital Sofia took 17-th place overtaking Prague (18), Paris (20), Lisbon (22) and London (26). According to The Global Property Guide, the positive feature of Sofia is the pro-landlord rental market. The negative feature is that the rental yields are poor – 4,19% – the transaction costs are high, the rental income tax is moderate and the corruption is strife. The capitals of many other Balkan countries feature better than Sofia. Ljubliana, Slovenia’s capital is in place 14, Bucharest, the capital of Romania, is in place 12, Zagreb, the capital of Croatia is in place 5, Istanbul is in place 4 and Skopje, the capital of Macedonia is in place 2.

The differences in the standard of living among the regions in Bulgaria continue to grow despite the European funding. The poorest regions – the North-Western and the Northern Central ones – continue to lag behind the rest of the country. At the same time Sofia receives the largest share of the European funding per capita according to the National Strategy for Regional Development 2011 -1015 of the Bulgarian government. The North-Western Region which includes Vidin, Montana, Vratsa, Pleven and Lovetch is getting poorer. According to the National Statistics Institute the GDP in this region was 5576 levs (apprx. 2250 Euros) per capita in 2009 or 62% of the average for the country. At the same time the richest region in Bulgaria – the South-Western Region which includes Sofia – had GDP of 15 610 levs (apprx. 7800 Euros) in 2009. In comparison the GDP per capita in the North-Western Region in 2000 was 90% of the average GDP for the country. The situation in the Northern Central Region that includes Veliko Turnovo, Gabrovo, Russe, Razgrad and Silistra is similar. The GDP per capita there in 2009 was 5942 levs (apprx. 2450 Euros).
In the North-Western Region only 59.3% of the people from the age of 20 to the age of 64 are employed. In the North-Central Region this proportion is 60.5% while in the South-Western Region it is 71.6%.
Instead of attracting Euro-funding, the poorest regions in Bulgaria receive much less European money in comparison with the capital Sofia. The North-Western Region has attracted only 512 levs (250 Euros) per capita, the North-Central Region has featured a little bit better, attracting 691 levs (345 Euros) per capita, while Sofia has attracted 2164 levs (1800 Euros) per capita.