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Tax considerations: Part 1

all you need to know about taxationIf you are considering an investment in Bulgaria or just a permanent move here, you need to understand what taxes you have to pay. Jonathan White author of “Buying a Property in Bulgaria” takes us through the steps needed to understand the Bulgarian taxation system.

If you are going to buy a property in Bulgaria then it is well worth spending some time understanding the basics of the tax system. You will need to consider various taxes depending on whether you are buying, selling or renting your property out. This chapter presents the basic facts about tax, so that you can at least establish what they are – and when you meet with a Bulgarian accountant (which I strongly recommend) you have at least a basis from which to start your discussions.

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Mortgages Support the Banking Industry

bulgarian mortgages growingRecent news from the Bulgarian banking sector confirms what many property investors have known for a while – investment potential in Bulgarian property is one of the best in the world. Not only does capital growth top global rankings, but the Bulgarian mortgage sector is booming. There is no doubt that the Bulgarian banking industry is growing at a rapid pace on the back of rising housing and property mortgage loans and a strong real estate sector. RNCOS, a leading market research company has released a new research report on the Bulgarian banking sector, which says that increase in mortgage loans is one the fastest growing markets for the Bulgarian banking industry. Indeed, the industry is expected to grow at a Compound Annual Growth Rate (CAGR) rate of around 88% over the next three to four years.


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The Biggest Tax Trap

will the tax man take your moneyHave you done everything right when you bought your property in Bulgaria? We’ve published numerous articles on the pitfalls and dangers of buying but it will do no harm again to go through one of the biggest tax traps of all which you might face when you come to resell your property.

It all starts when you buy your Bulgarian home. From your agent or developer you will no doubt hear the words ‘Tax Estimation Price’. They are talking about the price you put on the deeds which states the legal and declared price at which you are buying the property. Some agents will tell you that this is common practice and perfectly alright - it is not.

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Annual Company Tax Returns

annual tax returnsAnyone who has established a Bulgarian company must make an annual tax declaration. This includes everyone who set up a company just for the purpose of buying land or property here. You may not have sold your property nor done anything else with your company, but by law you still have to make a return.

Companies who do not trade are called inactive and the type of declaration you must submit is a nil declaration. It informs the tax authorities that your company has done no business and that no taxes are due from you.

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Bulgaria - not just about cheap booze

a stable, sound economyIf you are drowning in negative news about the state of the world economy, perhaps you should consider a permanent move to Bulgaria. Life here just gets better for the local people and in particular the growing expat market. A recent survey by the Bulgarian Economy and Energy Ministry ranks Bulgaria at the top of all EU states in terms of its low cost electricity and fuel prices. The report stated that no country within the EU could match Bulgaria’s low prices even its prices for natural gas were only surpassed by Estonia.

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Considering a Bulgarian Mortgage?

bulgarian mortgages are available for foreignersThe global credit crunch has had a dramatic effect on the UK housing market; the phrase “negative equity” is back in the British vocabulary and more people than ever before are being refused a mortgage; ironic considering that only a few years ago, mortgages were pushed with such verve it was possible to borrow four times your income or even rely on your parent’s income. With such tightening of credit facilities in the UK has left many disheartened and the once dreamed of escape to foreign lands like Bulgaria now seems to be impossible. However most international arms of Bulgarian banks now offer mortgage loans to foreigners, making your dream of a carefree life in Bulgaria more of a reality…

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Bank Accounts

bank accounts in bulgariaBanking and money issues in Bulgaria are completely different to those back home. Bulgaria is a country where credit and credit cards are still novel and exchange rates can vary from one institution to another like the wind. Another popular scam is the pleasant well-spoken English speaking Bulgarian who offers you a phenomenal exchange rate on the street corner. There are numerous tales of this happening and ending in tears. One expat exchanged GBP 500 with one such shark only to receive a bundle of outdated Russian rubles.

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Mortgage News Update

Chris Downham, Managing Director of Bulgarian Home Loans reports on recent changes in mortgages for foreigners purchasing property in Bulgaria. This is urgent and up to date information from a company who are specialists in Bulgarian mortgages. Update on Bulgarian MortgagesBulgarian Home Loans report: We have recently seen dramatically decreasing valuations on properties in tourist resorts, with a number of lenders even going as far as to refuse lending in specific tourist areas. We believe that lenders are being quite reactive to the general concerns regarding

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Off Plan Building Act Regulations

off plan and building regulationsWith off-plan purchases of properties in Bulgaria the practice is that the preliminary contract is signed when the property is still in the process of construction, or even at plan stage. At this stage the first instalment, or deposit, is paid.

In this preliminary contract the obligation of the buyer to pay each instalment should be related to the obligation of the developer to obtain the respective building Acts and permissions throughout the building process.

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All about Foreign Exchange

the currency markets when buying your homeWith the pound at an all-time low against the Euro, everyone is starting to notice the currency markets. Yet most of us don’t fully understand how Foreign Exchange (FX) works, and as a result we might not be getting the best possible deal, losing money in the process.

Added to this, banks don’t always provide consumers with the most competitive rates, which has led to the rise of a growing number of specialist exchanges that are handled by expert FX brokers. So how can you ensure that you are getting the best market rate with the plethora of options that are currently available?

Read more: All about Foreign Exchange