An enticing opportunity exists in real estate investment in Bulgaria. 

A hidden gem in Europe, Bulgaria combines a rich history (evident in its well-preserved medieval architecture) with the allure of pristine beaches on the Black Sea coast and stunning mountain ranges perfect for skiing. 

With its rapidly developing economy, strategic location, and growing tourism industry, it’s an ideal place to invest, live, and explore.

If you’re considering supercharging your global mobility and expanding your horizons, real estate investment in Bulgaria may present an untapped opportunity for you. 

Get ready to embark on a journey towards a brighter future as the WorldPassports team shows you the way…

*Disclaimer: All amounts mentioned in this article were correct at the time of publication and might have shifted since.

Why Should I Consider Investing in Real Estate in Bulgaria?

You should consider investing in real estate in Bulgaria, as it’s becoming an increasingly popular destination for tourists from around the world with its rich history, beautiful beaches, well-preserved medieval architecture, and vibrant culture.

With some of the best property prices in the world, owning real estate in Bulgaria offers the potential for a steady return on investment through its booming tourism industry and rental market.

Bulgaria also boasts a comparatively low cost of living (as much as 45% lower than the cost of living in the USA)¹, making the quality of life in this EU member state exceptional. 

What’s more

Alongside its affordable real estate, Bulgaria has witnessed the emergence of tech hubs in cities like Sofia and Plovdiv. 

The growth of the IT sector and the presence of numerous tech companies has contributed to an increased demand for office spaces and residential properties in these areas.

And if eco-friendly initiatives are your thing, you’ll be happy to hear that there’s a growing interest in eco-friendly real estate projects, such as energy-efficient buildings, solar-powered residential complexes, and eco-villages, catering to environmentally conscious investors and residents.

How Does the Real Estate Market in Bulgaria Compare With Other European Countries?

The real estate market in Bulgaria has unique characteristics when compared to other European countries. 

Here are some key points that our team compiled for you:

• Affordability: Bulgaria's real estate market is generally more affordable compared to many other European countries. Property prices, both for residential and commercial properties, tend to be lower in Bulgaria, making it an attractive option for foreign investors.
• Investment potential: Bulgaria has been attracting international investors looking for real estate opportunities. The market has seen an increase in foreign investment, particularly in popular tourist destinations such as Sofia, Varna, and Bansko. 
• Increased demand: Foreign investors and expatriates are primarily responsible for the rise in real estate demand in Bulgaria. The country's attractive natural landscapes, affordable property prices, and the possibility of obtaining residency through property ownership have contributed to this demand.
• Tourist appeal: Bulgaria's coastal areas, particularly along the Black Sea, have become popular tourist destinations, attracting visitors from around Europe. This has led to a demand for holiday homes, apartments, and rental properties, especially in resort towns like Sunny Beach and Golden Sands.
• Rental market: Bulgaria has a growing rental market, particularly in urban areas with a high concentration of students and young professionals. Renting out residential properties, especially in major cities like Sofia, can provide a stable income stream for property owners.

Keep in mind

The real estate market is subject to fluctuations and can vary within different regions of the country. 

Therefore, it's advisable to consult up-to-date market reports and seek professional advice when considering real estate investments in Bulgaria or any other European country.

Which Regions of Bulgaria Are Best for Real Estate Investment?  

Bulgaria offers several regions that are considered attractive for real estate investment. 

The best location for real estate investment depends on various factors, including personal preferences, investment goals, and market trends. 

To start your research journey, here are some regions in Bulgaria known for their investment potential:

• Sofia: As the capital city, Sofia attracts a significant share of real estate investment and has a strong rental market, a growing economy, and a high demand for residential and commercial properties. Sofia offers diverse property options, including modern apartments, office spaces, and retail properties.
• Black Sea Coast: The coastal areas along the Black Sea, such as Varna, Burgas, and the resort towns of Sunny Beach and Golden Sands, offer opportunities for investment in holiday homes, vacation rentals, and beachfront properties. The coastal areas attract both local and international buyers, especially during the summer season.
• Bansko: Bansko is a ski resort town situated in the Pirin Mountains and has become a sought-after destination for winter sports enthusiasts, attracting tourists from Bulgaria and other European countries. The town offers investment opportunities in ski chalets, apartments, and hospitality-related properties catering to the ski tourism market.
• Plovdiv: Plovdiv, the second-largest city in Bulgaria, has been gaining recognition as a cultural and creative hub. It was designated the European Capital of Culture in 2019, boosting its appeal as a tourist and investment destination.² Plovdiv offers a mix of historic properties, modern developments, and commercial spaces.
• Veliko Tarnovo: Known for its historical significance and stunning architecture, Veliko Tarnovo is a city with potential for investment in heritage properties, boutique hotels, and cultural tourism ventures. The city's charm and picturesque setting attract both tourists and investors interested in preserving and repurposing historic buildings.

Factors such as property prices, rental demand, infrastructure development, and future growth prospects should be considered to determine the best fit for your real estate investment goals.

Bulgarian Real Estate for Citizenship & Residency

To find out if buying real estate in Bulgaria will help you in your citizenship and/or residency journey, our team has the answers. 

See below.

Can I Get Citizenship If I Invest in Bulgarian Real Estate?

No, citizenship isn’t granted directly as a result of investing in Bulgarian real estate. 

However, your real estate investment serves as a key step in the journey towards Bulgarian citizenship, if that’s something you want.

Let’s get into the nitty gritty details.

Will I Need to Become a Bulgarian Resident to Buy Real Estate There?

No, you don’t need to be a Bulgarian resident to buy property there. 

With a few restrictions, foreigners can invest in Bulgarian real estate and apply for residency afterwards.

Does Owning a Property in Bulgaria Facilitate a Pathway to Bulgarian Residency?

Yes, owning a property in Bulgaria will facilitate a pathway to Bulgarian residency.

Foreign entrepreneurs who’re able to make a minimum investment of US$270,000 in Bulgaria can obtain permanent residence permits and, in time, even acquire citizenship by investment. 

There are several ways to do this, and real estate is one of the preferred investments accepted by the Bulgarian government. 

Should eventual Bulgarian citizenship be your aim, the requirements include the following: 

• Complete 5 years of permanent residency 
• Proof of financial self-sufficiency 
• Proficiency in Bulgarian language 
• Renunciation of other citizenship(s)

These requirements vary slightly depending on factors such as refugee status and marriage to a Bulgarian citizen during your residency period.³

Are There Any Restrictions on Foreign Investment in Real Estate in Bulgaria?

Yes, Bulgaria imposes certain restrictions on foreign investment in real estate.

It’s generally the case that foreigners (specifically non-EU citizens) can’t buy the land that their real estate is built on. 

For example

As a foreigner, you can buy an apartment in Bulgaria, but you’ll only own the apartment and not the land it’s situated on. 

What’s the Process to Buy Real Estate in Bulgaria? 

The process of buying real estate in Bulgaria isn’t necessarily difficult, but it does require you to follow some specific steps and regulations, particularly if you’re a foreign investor.

Follow WorldPassports’ 9-step guide below to ensure your process of buying real estate in Bulgaria goes smoothly.

Step 1: Find a Good Estate Agent 

To ensure a smooth real estate transaction in Bulgaria, it’s highly recommended that you seek assistance from a reliable estate agent who possesses in-depth knowledge of the Bulgarian market. 

A skilled agent can provide valuable insights, guide you through the process, and help you navigate the complexities of the Bulgarian real estate landscape. 

Step 2: Find Your Ideal Property

Once you’ve secured the services of a competent estate agent, it's time to explore the available options and identify the property that aligns with your investment goals. 

Consider factors such as location, amenities, proximity to essential services, potential for growth, and any other specific criteria that are important to you. 

Step 3: Make an Offer 

Having found your ideal property, the next step is to negotiate the price and terms of the purchase with the seller or their agent. 

Skillful negotiation can help you secure a favorable deal that aligns with your budget and objectives. 

Step 4: Sign the Preliminary Contract 

Once your offer is accepted, it’s advised that you proceed with signing a preliminary contract. 

This contract outlines the conditions of the sale, including the purchase price, payment terms, timelines, any contingencies, and other crucial aspects of the transaction. 

Review the contract thoroughly and ensure that all necessary details are accurately stated before appending your signature to it. 

The preliminary contract sets the foundation for the subsequent steps and formalizes your commitment to the purchase.

Step 5: Pay a Deposit 

To secure the property, it’s customary to provide a deposit. 

Typically, the deposit amounts to 10% of the purchase price, although this can vary depending on the agreement. 

Step 6: Register Transfer of Ownership Through a Notary

The notary public plays a crucial role in verifying the legality of the transaction, ensuring that all legal requirements are met, and overseeing the proper documentation of the transfer. 

They’ll facilitate the transfer process and assist in registering the property under your name.

Step 7: File a Tax Declaration

As a responsible property owner in Bulgaria, it’s important to fulfill your tax obligations by filing a tax declaration related to the property acquisition. 

Adhering to Bulgarian tax laws and regulations is crucial to maintaining compliance and avoiding any potential penalties or legal issues. 

Ensure that you accurately report all relevant information and seek professional assistance if needed to navigate the intricacies of the tax declaration process.

Step 8: Transfer the Balance of the Payment

After paying the initial deposit, you must complete the payment of the remaining balance as agreed upon in the contract. 

Ensure that the funds are transferred securely and in accordance with the agreed-upon payment terms. 

Timely completion of the payment is crucial to finalizing the transaction and securing your ownership rights. 

Step 9: Get an EIK Number from the Bulgarian Statistics Institute

Obtaining an EIK number from the Bulgarian National Statistics Institute is an important administrative step. 

This unique identifier is necessary for various legal and administrative purposes related to your property ownership. 

What Costs Are Involved in Investing in Bulgarian Real Estate? 

The costs involved in investing in Bulgarian real estate include registration fees associated with the property transfer, notary fees for legal services, taxes applicable to the transaction, and the estate agent's fee for their assistance throughout the process. 

It's important to factor in these costs when budgeting for your real estate investment in Bulgaria.

Here’s the cost breakdown you need to know about:

Registration Fees 

When investing in Bulgarian real estate, you’ll encounter registration fees related to the transfer of property ownership. 

These fees cover the administrative costs associated with recording the transaction and updating the official property records. 

The exact amount varies based on the value of the property and is typically a percentage of the purchase price.

Notary Fees

Engaging a notary is a crucial step in the real estate purchase process in Bulgaria. 

Notaries in Bulgaria play a significant role in verifying the legality of the transaction, preparing and reviewing legal documents, and overseeing the transfer of property ownership. 

Taxes

When investing in Bulgarian real estate, various taxes come into play. 

For example, transfer tax is levied on the transfer of property ownership. 

The transfer tax rate in Bulgaria is typically a percentage of the property's assessed value or purchase price. 

Estate Agent’s Fee

When working with an estate agent in Bulgaria, you can expect to pay a fee for their services. 

The estate agent's fee is typically a percentage of the property's purchase price and is payable upon the successful completion of the transaction. 

What Are the Tax Implications of Investing in Bulgarian Real Estate?

The tax implications of investing in Bulgarian real estate include tax residency, transfer tax, and property tax.

It’s crucial that you understand the tax implications, so read on.

Tax Residency

If you spend a significant amount of time in Bulgaria or meet certain criteria, you may be a tax resident. 

As a tax resident, tax laws apply to you that you might otherwise be exempt from.

Personal Income Tax 

Bulgaria offers a competitive personal income tax rate, making it an attractive destination for investors seeking tax efficiency. 

The flat personal income tax rate in Bulgaria is 10%, one of the lowest in Europe. 

This can be advantageous for individuals looking to optimize their tax liabilities.

Transfer Tax

When transferring ownership of real estate in Bulgaria, a transfer tax is imposed. 

The buyer typically pays the transfer tax, which is based on the assessed value or purchase price of the property. 

It's important to factor in this cost when budgeting for your real estate investment.

Property Tax 

As a property owner in Bulgaria, you’re responsible for paying an annual property tax. 

The property tax is based on the assessed value of the property and is payable to the local municipality where the property is located. 

Tax on Foreign Income 

Bulgarian residents are subject to taxation on their worldwide income.

If you become a tax resident of Bulgaria due to property ownership or other reasons, you may be required to report and pay taxes on your global income in accordance with Bulgarian tax laws. 

Common Questions

In Conclusion

Investing in Bulgarian real estate can open doors to a host of benefits.

By navigating the process diligently, fulfilling the residency requirements, and making a qualifying real estate investment, you can unlock new possibilities and expand your global footprint. 

Our expert opinion is that you should engage with professionals and conduct thorough research before embarking on this journey towards a brighter future in Bulgaria.

If you feel Bulgaria might not be the ideal fit for you to buy real estate, feel free to go through our other real estate investment articles.