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Foreigners Purchasing Land In Bulgaria

The focus of this following article is determined by two important factors.According to forecasts up to year 2050 the world consumption of food will double due to the expectations of 40% growth of the world's population and the increase of the purchasing power of the developing countries.

 

Substantial numbers of foreigners (predominantly Brits and Irish, in the last several years- Russians) have bought property in Bulgaria, some of them have already been dealing with this issue when purchasing house with land.According to the British company "Sevills" East Europe will be again on focus because of its fat land. The theme for the purchasing of land by foreigners in Bulgaria has many perspectives, but one that should not be undermined is the legal perspective.

The Bulgarian Law

In the Treaty of Accession of the country to the EU it is stated that Bulgaria has the right to refuse to sell land to foreigners for a period of 5 years and forests- for a period of 7 years. After this time elapses the ban will be dying out as the acquisition of land in each of the member states will be part of the free movement of capital.

Nowadays, foreigners who have the legal right to reside in Bulgaria are free to purchase land. Citizens of the EU, who do not reside permanently in Bulgaria, will be able to acquire the land of their second home in the country after January the 1st 2012 as to the Treaty of Accession of Bulgaria to the EU. However when there is an issue considering agricultural land, though, things are a little different. Officially only after January the 1st 2014 foreigners will be able to acquire agricultural land. Exceptions are made in the cases when an EU citizen registers as agricultural producer and states his intention to reside permanently in the country. Then he is entitled with the right to purchase land.

Foreign citizens could inherit land in Bulgaria but according to the Bulgarian legislation they have to either sell it or transfer it within a three years period. In most of the cases however this has not been observed as the law foresees no sanctions.


The Market of Land in Bulgaria and Its Potential

According to the research carried out by the British company "Sevills" the agricultural land in Bulgaria is one of the cheapest in the EU. The average price is E120.15/ da.

In the last several years there is interest demonstrated in both the regions of Varna and the Dunav region. According to the notaries acting on the territory of Varna municipality about 20% of the land transactions have been performed by foreigners. Our Ministry of agriculture has received enquiries from foreign agricultural funds about purchasing huge massive for cropping with bio or energy producing cultures (as bio-ethanol) in the Dunav region.

The individual investors however defer in their preferences to those of the agricultural funds.
On the Black Sea side attractive plots are those with sea view that are intended to be used for construction of holiday hotels or villages. The investors prefer the plot to be 1 hour by car from the Varna or Burgas airport. The minimum size of the plots is around 500 sq.m while there are significant purchases of 120 da as well. From ERA Realty advise that there is strong interest toward transactions with land south of Varna.


Registering Bulgarian Company

The active players on the today's market of land are the agricultural funds, however the individual investor who would like to buy the plot of the land of his house, should be acquainted with the condition that he could accomplish this through Bulgarian company. The registration of such legal entity is not a complex process but a need of legal representative or solicitor is always recommendable because of several reasons. First, all the documents are in Bulgaria and second you are going to be faced with the specification of a foreign legislation system.

The attorney will prepare power of attorney for you (and your partner or spouse). Those documents should be either apostilled in the Foreign Common Wealth Office in the UK or you could complete the procedure with Bulgarian notary as well.

The legal advisor will save you efforts, time and money in completing the whole procedure for you. The fees that you have to cover in the process are the attorney fee and court registration fee (please, consider that the requirement for the capital of limited liability company is now 2 BGN). Once your legal entity is registered, you could approach real estate agent who will help you find your desired piece of land.


Prices of Land Plots in Some Regions

In the land transactions, one of the most important components is the price.Here are examples of average prices of plots in some regions in Bulgaria.


Table 1 Average Prices of Plots in Chosen Regions in Bulgaria, as of February 7th 2011

Location Price/sq.m in EUR
Bansko 166
Leshten 73
Sozopol 151
Sunny Beach 124
Nessebar 71
Arbanassi (near Veliko Turnovo) 91
Pamporovo 70
Borovetz 126

Source: www.mirela.bg

There are still attractive and underpriced plots offered in small villages close to the prominent ski and summer centers, however a well informed agent is always the better variant if you would like to reach a good priced deal.

The investment in land could be the next "protection of value" as the latter is scarce resource and its price in the regions of East Europe is even predicted to increase.

Written by Home Point BG