Category Archives: Property in Bulgaria

Property in Bulgaria – regions, hot spots, facts and figures

Rustic Properties around Rousse – Hoping for Revival

If the current market can be described in a few words they would be: enormous supply of properties, unpredictable negotiation conditions, and the strength in the hands of the buyers.

The negative effects of the world crisis that started long time ago are still felt on the property market in the Rousse region. The number of people asking about properties is pretty low in comparison to previous years. The number of inquiries has fallen more than 5 fold in comparison to 2007-2008.

The big difference now is the type of properties for sale. Part of the properties on the market are owned by British vendors who had invested a lot of money for renovation during the past 5-6 years and who are forced to sell due to one of the following reasons: they don’t have enough time to come regularly to Bulgaria and there is no sense in keeping the house; they need money because of their financial situation in England has changed; or changes in their circumstances such as separation, divorce, etc.

Generally Brits are much more flexible than Bulgarians when it comes to buying and selling property (unlike Bulgarians who often consider a purchase of real estate to be for life). At the moment there are many properties for sale at excellent prices. Of course prices may still decline and it is debatable whether buying in Bulgaria represents such a good investment since prices are unlikely to bounce back for sometime. But what Bulgaria now offers is an opportunity to buy something that is not obtainable in other buying destinations. In many ways it reflects what the market was like 7-8 years ago and what makes Bulgaria unique. For less than 15,000 euros you can now buy something reasonable and that probably the equivalent of half a dozen family holidays and its with you for life.

Potential buyers know that they are in a strong position and use that to reduce the prices and negotiate very good conditions of sale such as staged payments within several months or even a year. The sellers are not in a position to say “no”.

In the last few years it has been noticed that Bulgarians are more active in the market for the rural properties compared to ten years ago. Many, especially families with young children and retired people, wish to move their home from the cities to the villages not far from the cities. The reasons for that are: the stress, the need to relax and their desire to grow their own vegetables and fruit that are clean and tasty. This makes another growing group of potential buyers. The desired houses must be close to Rousse (not more than 30-35 km) and in livable condition. In comparison to English clients who doesn’t mind longer distances and prefer to buy cheap and make renovations themselves Bulgarians prefer to be close to town (where they probably work) and to have less work to do on the house.

Romanian buyers in the Rousse region are very much similar to Bulgarians in terms of their mentality and what they are looking for. They want houses in good condition, close to Rousse which gives good access to Romania as well. They are ready to increase their budget in order to buy a really good property. And as we wrote above good offers are not missing on the market now such as properties that would have sold for about 70,000 EUR 7 years ago (solid, very well-maintained, entirely renovated and luxuriously furnished) and now cost only about 30,000 EUR, such as this beautiful house and even can reach prices up to 14 000-16 000 EUR.

In 2013 the properties of interest are of higher standard than the previous years. Most of the buyers are looking for renovated properties which are really good value for money. Such deals happen due to the fact that many sellers can not wait long to sell their houses and they are forced to sell at a lower price than they expected.

In Rousse region it starts to be seen how the villages become more alive because people start to return there. This is good for everybody in the region. The other positive fact that makes us sure in the good future of the Bulgarian countryside is that the Government invests a lot through different European programs in agriculture and rural regions. People, not only here, but in the whole Europe start to understand how important it is to keep close to the earth. This gives us confidence that people will continue to move back to the villages.

Prices of city properties in Rousse are showing a little increase in comparison to the last two years. There is large number of offers on the market and the number of deals are very small because the buyer are still quite unsure. Currently average prices of city apartments are 400- 500 EUR/sq m for flats in old buildings and 450-600 EUR for properties in newly built blocks in the center of Rousse. At the market peak in 2008 prices reached 1,200 EUR/sq m. On the other hand the rental market is much more active. Many people who planned to purchase a property have to rent instead as they have no access to affordable bank loans. The rents are reduced as well and there are good quality furnished properties as well as many tenants looking for better quality.

All the above has good effect on the market in long-term because there are many people that restrain from buying now but life continues and they can not stop themselves forever. Sooner or later all they will come to the market willing to buy what they need. The desire is now kept in stock, like the savings of the Bulgarians which according to the Statistic continue to grow. This gives us hope that there is a certain amount of money waiting to be invested in the sector.

Rousse – The Modern City And The Beautiful Nature Parks

Rousse is a city of many contrasts. It once was one of the most important cities along the River Danube but with the collapse of the Austro-Hungarian Empire its importance waned. It has, however, been blessed with a legacy of some of the most wonderful examples of Central-European architecture dating back many years. Not for little reason has it been called the Little Vienna. Unfortunately this grandeur is only found around the centre of the city whilst the suburbs have been modernized under the communist administration. The city of Rousse has a population of about 150000. It is situated 320 km North-East of Sofia, 200 km North-West of Varna and 100 km North of Veliko Turnovo. The closest airport is the Bucharest one at a distance of about 70 km.

The surrounding area offers variety of recreation opportunities and one can enjoy the beauty of the region. The most outstanding natural feature is the Roussenski Lom Natural Park which is in essence a meandering river that has carved a deep gorge through the landscape. The result is a scattering of small villages that are either perched on the cliffs overlooking the gorge or are nestled at the foot of the gorge. In both instance the views are quite spectacular and unique.

There are lots of beautiful spots:

The ruins of the Mediaeval Town of Cherven – the key town of Northeast Bulgaria in the 14th century. Because of the great historical importance of this place the property prices start from 15,000 EUR for an old house that needs entire renovation. The nearest villages Koshov, Tabachka and Nisovo are also of great interest. Here you can check severalgood examples of properties for sale in this area: a typical house for renovation , a renovated property , another renovated property , a house in need of finishing works .

The archaeological reserve “The Rock Churches” where the visitors can see well preserved frescoes of the mediaeval art from the 15th Century. It is included in the list of world Cultural and Historical Heritage of UNESCO. Ivanovo village is preferred by people who consider the close proximity to the city as one of the most important features together with the excellent roads which lead to it. Property prices are similar to these in Cherven, Koshov and Tabachka.

Basarbovo Rock Monastery: It is 12 km from Rousse, in the rocks close to the village of Basarbovo. One property which deserves attention is this great newly built house just 13 km from Rousse.

Orlova Chuka Cave which is 50 km long and reaches Romania beneath the river Danube. Near the cave there are many villages: Chilnov, Ostrica, Shirokovo , Koprivets and Pepelina. The prices of the properties in this area are cheaper because it is farther from the city. You can find an old rustic house at a price starting from just 8,000 euro. An excellent property can be bought in these areas for under 30,000 eurosuch as this ready-to-move-in 2-bed house. Cheaper deals are also available.

Considering the broad and diverse attractions of The Roussenski Lom Nature Park every visitor can find something of interest. There are signed routes for hiking, cross-country riding and biking, eco- educational trails and places for observing birds and predatory mammals.

The Lipnik Forest Park is the city’s closest recreation area. It is a wonderful place for fishing, water sports and outing. The most expensive in this area are the properties in Nikolovo village which stands on a lake and provides excellent views. The prices there normally start from 50 – 60 000 EUR for a modern big house with stunning panorama. In this area most of the houses are recently built and more luxurious in comparison to the old styled houses along the Roussenski Lom River Valley. A sample of a lovely house in this area very close to Rousse is provided here.

EU Citizens Are Allowed To Buy Land for Residential Purposes in Bulgaria in Their Name

The regime of ownership of land plots for residential purposes was changed in Bulgaria in the beginning of 2012. Now citizens and companies of all EU and EEA countries are allowed to own residential land in their name without the need to register a Bulgarian company. The change happened after the expiration of the 5-year moratorium which was allowed by the Treaty of Accession of Bulgaria to the EU.

The change of the legislation applies to plots of land which fall into the settlement borders – towns, villages and hamlets – and which are often referred to as regulated plots of land. The regime for ownership of land with different status such as agricultural plots and forests is not changed and foreign individuals and companies will not have the right to possess such plots until the end of 2013.

For all other foreign persons, who are not citizens of EU or EEA countries, the overall restrictions to buy land in Bulgaria are still valid, which means that they need to register companies.

As this is a new regulation of the market, there are some differences in the procedures in the various regions of the country.

If you own property in Bulgaria through a company and would like to understand the particulars, please contact us to discuss your situation and advise you about your options.

Bulgarian Tax Review

Bulgarian Tax Review

Under Bulgarian law it is responsibility of the individuals to fill in a tax return each year when they have any taxable income whilst all companies have the obligation to submit annual tax returns each year regardless of their activities. The tax offices in Bulgaria are not always very helpful so you should seek professional assistance.

Local Property Taxes (similar to UK’s Community Charge)

The property tax is paid annually to the local municipality based on property tax evaluation which is determined according to tax criteria and the information provided by the owner in a declaration that is submitted not later than 2 months after the acquisition of the property. Each property has a file with the local tax office which is being updated in case of changes in the state of the property based on owner’s declaration. The tax charged is between 0.1 and 4.5 per mil of the tax evaluation and is set by each municipal council for the particular municipality.

In addition to the property tax you are required to pay a refuge fee which is often higher than the property tax. The rate of the refuge fee is decided by the local municipal council and in some of the smallest villages there might not be such fee. Both taxes come as one bill. The taxes are payable in four instalments and you can receive a 5% discount if you pay the bill in full by the end of April.

The property tax of an average centrally located apartment in the bigger cities would rarely exceed 50 euros and for a rural property would not be more than 20 euros per year. The municipal refuge fees would also depend on the location and would not be more than 100 euros per year for an average centrally located apartment in the bigger cities and 30 euros per year in the villages.

Taxes Payable by Non-Resident Individuals from renting and selling a property

Income of non-resident owners (individuals) from lease of real estate is subject to 10% withholding tax in Bulgaria. If the lessee is a Bulgarian legal entity the tax is withheld and remitted to the budget by the lessee on behalf of the non-resident lesser. If the lessee is an individual the tax should be paid by the non-resident owner of the real estate within 30 days as of the date on which the rent has been paid by the lessee.

If you sell your property as an individual non-resident owner you must pay 10% withholding tax on the difference between the selling or tax evaluation whichever is greater and the purchase price. However since January 2007 EU citizens are not required to pay the 10% withholding tax (1) if they sell one residential immovable property, regardless of the date of acquisition of the said property, in any one year and (2) if they sell up to two immovable properties as well as any number of agricultural and forest properties, provided that more than five years have elapsed between the date of acquisition and the date of sale or exchange.

Taxes Payable by Resident Individuals

This is a just brief summary of the complicated laws relating to individual’s income tax. Taxes are paid to the national government. The tax returns must be completed by the middle of April in the year following the year to which they relate. If your total income is subject to any of the permitted exemptions you need not fill a tax return unless you are running a business or are self- employed.

Tax on income from the renting a property.20% of the income from rent go towards costs and the remaining 80% of the income are taxable. The rate of tax is 10%. This tax should be paid up to the 15th of the third month following receipt of the income. If for example the rent is paid on the 2nd of January then the tax should be paid by the 15th March of that year.

Income from sale of property. The tax base for the sale of property is the difference between the selling price and the purchase price reduced with 10% for costs. The income tax payable is 10% of the amount calculated as per above rule.

As for the non-resident individuals there are important exemptions that apply to EU citizens when it comes to selling property that mean you are not required to pay tax if you receive income from the sale of: (1) one residential immovable property if you have owned it for more than three years; (2) up to two immovable properties as well as any number of agricultural and forest properties provided that more than five years have elapsed between the date of acquisition and the date of sale or exchange; (3) property that you have received as an inheritance.

Taxes on the employment income are payable by the employer who is responsibile to deduct the income tax and pay it to the government on a monthly basis. This tax is paid together with the social and health insurance payments. The tax rate is10% based on the income reduced by any social payment made.

Taxes Payable by Companies

Under Bulgarian legislation in force non-resident companies and individuals are allowed to set up Bulgarian entities without any restrictions. Bulgarian entities owned by foreign shareholders are allowed to acquire any kind of real estate in Bulgaria including land.

The rate of corporate tax is 10%. The tax is levied on the basis of the profit of the company as per its profit and loss account, adjusted with certain non-deductible items. After-tax profit of the Bulgarian company may be distributed as a dividend to the shareholder/s; alternatively these profits can remain within the company.

If the money from profit is taken out of the company it is done so as dividends. As per the Corporate Income Tax Act dividends are subject to 5% withholding tax in Bulgaria. Withholding tax will not be due in Bulgaria in the situation where the shareholders in the Bulgarian company are tax residents of an EU country and:

  • The shareholders are not considered tax residents of a third state on the grounds of a Double Tax Treaty;
  • The shareholders are payers of corporate income tax in their state of residence and are not entitled to any tax exemptions, tax holidays, etc.;
  • The non-residents hold at least 15% of the shares in the Bulgarian company distributing the dividends for an interrupted period of at least two years.

Most people register a company simply to own a property in Bulgaria and have no interest in maintaining any links with Bulgaria once they have sold their property. In this instances when you come to sell your property you can either sell the asset (i.e. the property) and then liquidate your company or you can sell the shares in the company to the buyer. The price of the shares would of course reflect the price that you want to sell the property for. If you are intending to continue some activities in Bulgaria then you should not liquidate your company when you sell any of its assets. If you do liquidate your company you will be required to pay profit and dividend tax as outlined above.

Value Added Tax

The current rate of the Value Added Tax is 20%. If you buy a property as an individual or as a company from a VAT registered company you will have to pay 20% VAT and the seller then passes on this VAT to the government.

Companies are obliged to register for VAT if the value of their sales is equal or grater than BGN 50,000 in any 12-month period but a company can choose to register even with nil revenue. Once a company becomes VAT-registered it is obliged to charge 20% VAT on all taxable deals. The company should prepare and file monthly VAT ledgers on which bases the tax liability is determined. The tax is due by the 14th of the following month.

VAT charged to the buyer of the real estate will not be recoverable at the point of purchase unless the buyer is registered for VAT. However, the above VAT may be recovered by the buyer of the real estate even if their VAT registration is affected after the date of the purchase of the real estate, provided that the property is still owned by the buyer at the date of their VAT registration.

Bulgaria has Double Taxation Agreements with most of the European countries including the UK. If, for example, your income is chargeable to tax in Bulgaria and in the UK, a double charge is prevented by one of the following exempting the income from tax in one of the countries or allowing a credit in Bulgaria or in the UK for the tax paid in the other country on the same income. In any case it might be useful to familiarise yourselves with the treaty relevant to your domicile and Bulgaria in order to avoid future problems.

Prior to joining the EU in 2007 the general consensus was that you were better off owning a property through a company because the tax levels were lower than owning as an individual. The tax levels now depend on whether you are tax resident in Bulgaria. If you are resident and expect to receive constant income from your property through rent you could be better off registering a company since the tax rate for companies is lower than residential individual tax persons. If you are non-resident as an individual (if possible) you are probably better off buying as an individual since the tax levels are comparable but you now have the added bonus of being able to sell one property per year without tax.

Bulgarian Experiences: English Book Shop

Bulgarian Experiences: English Book Shop

By Karen Fox

Originally published in Stara Planina Properties newsletter on 13th February 2009.

Some things happen so naturally you have to decide that they were just meant to be…

Plans for ‘The Book Cave’ started when I was admiring a friend’s newly converted old quarter flat, ‘It even comes with its own shop’ she told me. ‘I need to find someone who wants it, it’s very small but I think it would make a lovely bookshop’.

I’ve always loved to read and had already been through my books six times and swapped them with everyone I knew, the idea of an excuse to bring more reading matter to Bulgaria was almost irresistible, so off we went to look at the shop. It was very small (12 sq m) and in need of a little work, but the location, not on the high street, but just off the old art quarter seemed right for second-hand books.

The research period followed. How many books to a cardboard box? How much do they weigh? How much shelf space do they take up? How much was all this going to cost? Where could I get the books from? Initially this last question was my biggest concern, then my sister casually announced ‘You do know your niece is going out with a boy whose parents are booksellers don’t you?!’ A few e-mails established that they could provide me with mixed boxes of good quality second-hand books at a price that began to make it look as if the whole idea could be possible. A chance contact with a man involved with exporting from Bulgaria who was looking for items to transport from the UK solved the last practical problem. We could buy books and get them to Bulgaria for a decent price where there was a space available to sell them from.

The next phase was the bit which is most anxiety provoking for Brits trying to run a business in Bulgaria; obtaining the various permissions and documents needed to make the business legal.

At the start the lady from the municipality planning department was not encouraging, ‘There is no shop in that part of Opulchenska Street, there never has been’. We waved the notary deed at her and told her we’d been into the premises, ‘Show me’ she said, so in one of those slightly surreal Bulgarian moments we jumped in the car and did just that. ‘Oh yes’, she announced, ‘It was a fabric shop, I think the skirt I’m wearing now came from material I bought there!’

There was no need to apply for change of use, just the documents to re-open were needed. The discovery that bookshops are exempt from hygiene regulations in Bulgaria was a real stroke of luck, with no water on the premises we’d been scratching our heads about how we would install the toilet!

The wooden wall at the back of the shop had to come out; it was ugly, damp and a fire risk. We expected to find a cliff face behind the wall and were more than a little disconcerted when we realised we’d broken into the neighbours cellar but he was very understanding about it and even offered to sell us the cellar if we wanted to make a bigger shop!

As well as native English speakers we’ve served Romanian, French, Italian, Scandinavian and German customers, as well as many young and not so young Bulgarians who are delighted at the chance to purchase good value English books.

Bulgaria isn’t always an easy country to live or do business in, so it’s great when things run smoothly. It appears we’ve found a product people want and can sell it for a price they find acceptable; the exchange system (bring your book back when you’ve read it and get 50% of the price discounted from the next book) works well for those with limited budgets or limited shelf space. I’m still waiting for the day when a book I’ve sold to a hosteller on his way to Istanbul is returned by another on her way to Bucharest; sooner or later it has to happen!

The address of The Book Cave is 9 Opalchenska Street (less than 50 metres from Yantra hotel and 100 meters from the Stara Planina office in Veliko Turnovo).

Bulgarian Experiences: Running a Backpacker Hostel

Bulgarian Experiences: Running a Backpacker Hostel

By Graham Bright

First published in Stara Planina Properties newsletter on 19th December 2008.

As most young people I did the usual thing of taking a gap year to travel the world and explore far flung places, staying in backpacker hostels, meeting people and discovering different cultures. On returning to England and embarking on a career I never really felt settled: I would always make the most of my 22 days holiday allowance per year but never felt it was enough. One day I thought back to places I had been, and one thing that struck me was the lack of memorable hostels; very few stood out as being anything above ordinary. With this in mind my future was set; I was to open a hostel that was a cut above the rest and provide backpackers with what they want; a decent place to stay at a fair price.

One summer I had used my precious 22 days on a swift jaunt through Eastern Europe, taking in the Baltic’s, Poland, Romania and Bulgaria. Of all the countries Bulgaria was the least equipped for foreign backpackers; having only one hostel in Sofia. With this, my mind was made, and choosing a location within Bulgaria was easy; Veliko Tarnovo stood out head and shoulders above any other destination owing not only to its beauty, but also its location; at a crossroads on the main Istanbul-Bucharest, and Sofia-Varna train lines it lays in a strategic position for maximum footfall.

So I returned to Veliko Tarnovo, not knowing the language, the laws or the requirements for a hostel etc. There were times when things were difficult and I thought how easy life was back in England. But I persevered, finding a suitable property, and more importantly understanding the municipality requirements for opening and running such a business. Then the lengthy process of renovating the place began. The property I had bought required a new roof which would also allow the attic to be utilized as further living space, aside from this the rest of the place only required the standard re-wiring, re-plumbing, re-plastering and decorating throughout. I chose a local contractor to undertake the work after inspecting previous examples of his work. His initial time frame for completing the entire works was 8-10 weeks, which seemed reasonable and after 3 weeks all seemed to be on track; the old roof removed and new one in place. But then things slowed down considerably and instead of 4 workers coming each day it was only 1 or 2 and then every other day. It was extremely frustrating because the quality of the work was good and also the price, but when you are trying to open a business time is money. After several talks progress did speed up, but it was still 19 weeks in total for the works to be completed which resulted in me missing the majority of the peak summer season.

The overall finish was how I had envisaged it, original wood doors and floors remained giving character, bespoke bunks with built in lockers and individual reading lamps offer the budget traveller comfort, but the real wow factor was in the attic space which had been transformed into the communal lounge and kitchen and works so well providing the decent social space that so many hostels lack.

Following all the municipality checks I obtained a license and was up and running, the instant turnover was phenomenal which was largely down to good relations with the local Tourist Information Centre, this was key to getting the place known. I also sent fliers to hostels in other cities, developed a website as well as a listing on all major hostel booking sites. All this paid dividends as numbers were continually increasing and a researcher for the Lonely Planet Travel Guide stopped by. The following year the hostel was the first listed in the new guide book; which backpackers rarely leave home without! This saw occupancy figures rise further and really had the place on the map.

The day to day running of the hostel has been improved over time which comes with experience; to begin with it was largely trial and error to see what worked and what didn’t. With all the hiccups ironed out the operation runs smoothly, although it can be a bit of a mad house over the peak season, especially on rainy days when the majority of the guests don’t venture out. The large lounge with a generous selection of board games, books, magazines and Wi-Fi internet access usually provides enough entertainment though.

Feedback from travellers has been great; many say it’s the best hostel of their trip, I feel proud of my achievement and that I have fulfilled my original goals.

Bulgarian Experiences: Running a Bar

Bulgarian Experiences: Running a Bar

This post was originally published in Stara Planina Properties newsletter on 14th November 2008.

I am a person who likes taking on different challenges and moving on in life so after a career in I.T., back in England, I came to Bulgaria a few years ago for a change of direction. After awhile kicking back and enjoying the gloriously long summers I decided I needed to actually do something productive with my time. Bulgaria has a great cafe bar culture and I’d always fancied myself as a bar owner so I thought I’d give it a go.

Whilst I love the bars in VT, one thing that was lacking was a student bar that played alternative/retro music. Armed with this niche, I set about finding some suitable premises. The place I found had been a bar before (and indeed a leather factory before that) but hadn’t operated for 6 years. It was located in the old town near the Hotel Yantra and oozed character with a high vaulted ceiling and a small garden with views over a church and the river below. Inside it was big enough for about 50 people and the garden outside again could take 50 people. The fact that it had operated as a bar beforehand was good news as I didn’t have to apply for change of use (which is long and bureaucratic procedure). The first hurdle was out of the way. However, because it hadn’t operated as a bar for 6 years, the license had been revoked and I would have to apply for a new one after jumping through the following hurdles:

  • Ventilation Inspection
  • Health & Safety Inspection
  • Health & Safety Sound Test
  • Fire Inspection
  • Building Inspection (Structure and Electrics)

Before embarking on any works it is advisable to ensure that the bar will meet the requirements of the above listed hurdles. If so, then the next step is the works. First you need to find a reputable designers to draw up your plans for the bar layout, electrical circuits and plumbing. Once these are done they need to be rubber stamped at the municipality. A point to note here is that if the building doesn’t already have 3 phase electricity then you’ll more than likely have to pay to upgrade it to handle ventilation and/or AC.

If you’ve renovated a property in Bulgaria before, or in the UK for that matter, then you know the rest. You need to coordinate an architect, builders, plumbers, electricians and joiners. If the architect is late, the electrician and plumber are late. If the electricians or plumbers are late then a builder can’t plaster a wall or concrete a floor. If the builders are late then the joiner can’t install the floor, wood panel the walls or install the bar. Unfortunately, delays are inevitable and every day costs you money in potential revenue. When the bar is, finally, finished you can bask in the glory of your achievement. Now it’s time to hold your breath and get the inspectors in.

Once the inspections are over, it’s time to pay a little more tax and get your license and permission. A great feeling as once you have this, it’s just a matter of paying a small fee each year for the alcohol license.

So you now have a legal bar, it’s time to solicit offers from bar suppliers, buy and register a cash till, buy an adequate sound system/ TV, fridges, ice machine, glasses, spoons and find a cleaner and bar staff. Getting the right staff is very important for a bar as they are the front end to the business. It’s important that the staff that you employ fit the mood of your bar because if they fit the mood then so will their friends and they will come to the bar. With this in mind, being a student bar, I advertised on the notice boards at the University. Once you have one or two staff, then it snow balls as they suggest friends and friends suggest friends etc.

After you’ve been running for a while, be prepared to make compromises. One of the biggest mistakes you can make in business is sticking steadfastly to your ideas and ignoring the wants of the customers. If I had my way, my bar would play alternative rock music every night but this is not what the students want. I compromised by playing just popular alternative rock along with Bulgarian rock (no Chalga thankfully!), Reggae, a little Hip-Hop and, of course, lots of Depeche Mode. Listen to your staff; they have a good idea of what music the locals like. They can make suggestions and you can see if it’s appropriate for your bar. This applies to all aspects of your bar, be it music, drinks, decor etc.

If your bar is successful then, if you have the space, you may also need to invest some or all of your profits into expansion. As the summer months approached, I created a paved area outside so we could have a beer garden with benches and chairs. I employed a local joiner to craft bespoke tables and chairs out of thick wood and tree stumps. The results were very impressive but my staff described them as Flintstone furniture! Take note that, unlike the Brits, Bulgarians don’t like sitting directly in the sun, so parasols or complete covering may be needed. So, after paving the whole garden, the winter months approached and I realised that the garden was going to waste, and the main bar was becoming too full. I had to compromise on the garden and build an extension over half of it to create an overflow for the main bar.

It’s a risky business, most bars close after their first year, but if you find the right niche, mood and staff you’ll have a great time and make some money. Da Da Bar is now the most popular student bar in town (not so difficult given there are over 10,000 students!) and also attracts a varied mix of internationals some of whom live locally and some who come from the many hostels located nearby.

Greek Crisis: Is Bulgaria Safe?

Greek Crisis: Is Bulgaria Safe?

This post was first published in Stara Planina Properties newsletter on 4th November 2011.

It has been over a year since the problems in Greece concentrated the attention of the European leaders. Since this point in time there has not been a single month without news of plans being drawn about rescue of Greece and Euro currency from the threatening storm.

The problems of Greece came from spending more money than the government was collecting from taxes for long period. The deficit was funded by borrowing money from foreign banks (mainly French and German) through issuing state obligations. Thus the state debt increased to an amount which could not be paid off anymore. In 2010 the Greek government was put under pressure to start reforms in order to save money and start paying off the debt. The EU would help by giving additional funds for reasonable amount of time whilst Greek economy was cured from the proportionally very high state expenditures. However Greek government faced the resistance of their own people to part with the benefits of the past. Strikes of state servants and workers of various industries in Athens and most big cities were a daily occurrence. People simply want to continue to live la dolce vita without changing any of their attitudes.

Compared to the above Bulgaria is completely different case. Following a severe bank crisis in 1997 the government and Bulgarian National Bank introduced strict rules for state spending and bank capitalisation. Between the years 1998 and 2008 there were budget surpluses (Bulgarian government was spending less money than collecting). Bulgaria has much lower state debt and budget deficit of less than 3%. 2009 was the only year when the budget deficit exceeded this healthy figure going up to just 4%. The restrictions provide confidence in the stable development of the economy but, on the other hand, make life of most Bulgarians hard as majority spend about half of their budget on food and utilities. Bulgarian economy just started in last quarter of 2010 to grow slowly again after the last crisis. Now according to the Bulgarian finance minister Simeon Diankov Bulgaria is safe out of the economic crisis. However this safety is fragile as such a small export oriented economy depends much on the growth in the Western European economies.

What is the impact of the Greek crisis on the Bulgarian economy and what can be expected if the problems deepen? It was again the finance minister Diankov who claimed that the trade between the two countries has decreased significantly and the Greek crisis will not have direct negative impact. However the national statistic shows that Greece is one of Bulgaria’s major export markets (9% of Bulgarian exports in 2010). Being immediate neighbours the two economies are strongly connected. Several Bulgarian banks are owned by Greek banks (comprising about one-third of the market). This does not mean that Bulgarian banks will collapse but if there are problems in Greece, banks will be looking to take back to Greece more funds which means even less credits with higher price for the Bulgarian businesses. Even now credit policies are very restrictive and price of the capital is high. This will put Bulgarian producers in a difficult situation and will make them less flexible; they will not be able to invest in modern technologies and will be less competitive on the international markets. The third direct impact is that large number of Bulgarians work in Greek tourism and services. These people are paid much better than workers on similar positions in Bulgaria. Many of these people send their income back to support their families in Bulgaria. If Greek economy collapses many will lose their jobs and less money will be coming into the Bulgarian economy.

There are other points which are to the positive side. Over 2,000 Greek companies have moved their business to Bulgaria recently fearing the problems in their home land. Some Greeks are looking to invest their savings away from the uncertain banks and quite a few sales have been completed during the summer months in the ski resorts and regions in Southwest Bulgaria with Greek buyers. In addition there has been steady growth of Greek tourists holidaying in Bulgarian winter and spa resorts in the same regions.

It is difficult to predict all the outcomes in a world where economies are so much connected and where relationships are so complex. The world markets already reacted to the news from Athens and Nice and Euro went down compared to the US dollar. If this trend continues fuel prices (which are formed in US dollars) will rise. As a direct result for Bulgarian goods and services for daily consumption such as petrol, electricity, transport, food will be increased too. This will put pressure on the weak domestic demand and put break to the slow growth.

Bulgarians want to believe problems in Greece will be resolved without negative effect on the Bulgarian economy. Naturally fears are connected with lost of jobs and reduced income. There have been enough crises during the last 20 years and life for many seem to have worsen despite the hopes and talks for the bright European future.

Moving to Rural Bulgaria with Young Children

Moving to Rural Bulgaria with Young Children

What we will say below may sound discouraging to some of you but this is our true and honest opinion on the issue and we feel it is good to share it with our interested readers. Living in rural Bulgaria with young family has certain specifics which need to be taken into consideration before you choose your property (and property region and village).

Schooling. This is the first issue which you have to think about when choosing the location of your property. Normally there aren’t many young families in the villages away from the big cities. Hence there isn’t a school in each village and in some schools kids from two classes study together in mixed groups. Local municipalities provide a special free transport to the nearest school if there is not one in your village. Read further about the Bulgaria’s education system..

Medical care. When you have young kids you have to have constant contact with a doctor who knows them and who is available to speak with you and visit you 24 hours a day and 7 days a week. Finding a doctor to whom you can explain the condition of your kid in your language will not be easy in the villages. There is a general practitioner in most middle-sized and large villages. Just some of the most remote areas close to the borders (especially in the South-Eastern and Southern Bulgaria) are not well served by GPs. If you need to visit a specialist doctor however you will have to go to the nearest town or the regional city. If you have babies or kids with special needs in the family we strongly advise you inquire in advance what are the options in the area and eventually take the contacts and meet the local doctor. Further read about the Bulgaria’s health system..

Transport connections are important especially as you will have more shopping to do, may need to go to the nearest polyclinic with a kid or may have to take the kids to a school of your choice and not to the one the municipality recommends. In any of these cases having a car is a must. We do not think it viable to rely just on the available public transport.

Attractions for kids. They are very few if you think of quality playgrounds or other means that normally entertain kids in the cities. Kids living in the villages have a lot more though. They have the freedom, space, touch to the nature and traditional village life which is completely unknown to the city people. These are things which will not only entertain them but will also educate and give them a healthy attitude to the world that surrounds them. Kids in the villages are not growing in the jungle of parked cars, nor have to share a small garden with hundreds of other people. There is normally a quiet street where they can freely learn to ride a bicycle, a neighbour who has animals and will allow the kids to feed them, and a field where kids can walk freely.

Mother tongue tuition. Most parents would like their kids to be fluent in their native language. Pupils study Bulgarian in the local schools and start learning a foreign language of their choice at age of 8-9 at school. However the level of foreign language education varies and in some schools kids would not learn much especially in the small village schools. If you really want your kids to write well in your language you may need to spend time teaching them or to pay someone to do so instead of you. There are private language tutors in every city and many of the smaller towns.

Living in a Bulgarian village away from the big cities may be a challenge at times for both kids and parents but it can also turn into a fresh new perspective in life if you have done your research before purchasing your property.

Retiring to Rural Bulgaria

Retiring to Rural Bulgaria

With the affordable property prices and comparatively low living costs – Bulgaria is an attractive place for many people reaching retirement. However there are a number of issues which people have to consider when they think of moving to Bulgaria. These are both personal circumstances and facts of the local environment.

Moving home late in life means that you will change your place, neighbours and, probably, some of your habits but there will be attitudes which are comparatively stable and you will not be able or will not want to change.

Town or village. Rural areas of Bulgaria are tranquil and beautiful but they also are less populated and developed than Bulgarian cities and, indeed, the villages in the western part of the continent. That is why the first important issue to consider is if you are a ‘city’ or a ‘village’ person. If you are used to living in a city, having all the amenities within walking distance, cannot pay attention to things such as cutting grass, etc, it may be too late for you to change. Sometimes people need a break from their routine life and rural peace may seem like a heaven. But do you think you will still feel the same after two weeks or you would be eager to return to the life you have always lived? Think about this when you make your decision whether to purchase a city or a village property, or how far from a city you need to be.

Transport. If the answer of the above question leads you to a village property you should be prepared to drive or use a bus for most of your shopping, hospital or specialist doctor treatment, going to restaurants, etc. Having a car would be the most convenient travel option but most villages linked to local urban areas but like in the UK the frequency of service is low. Check what is the timetable to the nearest city or town and what is the travel time.

Medical care. To start with you should obtain your European Medical Card before living your home country. This card will cover any emergency treatment until the time you register with the Bulgarian health system. You may also subscribe to a private medical insurance from the beginning of your stay to give you time until you settle in and go through the formalities. Such medical insurance will cover your travel and any non-emergency cases after your arrival. How to register with the Bulgarian health system you can find out in our newsletter archive.

Shopping. Most villages have one or two shops selling basic goods. In the smaller settlements there might be no shop though. Pop in the shop on the village square to get an idea of what is for sale there and how often you will need to travel for shopping. The towns are well supplied with all foods and items for daily consumption. For items such as furniture, white goods, electronic goods, some of the clothing, etc, you will need to visit bigger towns or cities.

Bars & restaurants. There is a small bar in almost every village. Often there is ‘two-in-one’ shop and bar where people meet in the evenings to have a drink together. If you want to go to a decent restaurant however you may need to travel to the nearest town. This may be a nice change and some people prefer to go out and stay in a local hotel for a night.

Gardening. A nice garden is something which gives joy in every season. A garden blooming in all colours of the rainbow in the spring, hiding under the shade of mature trees in the summer, enjoying the fruits and flowers in the autumn, gathering sun in the short winter days is a romantic picture. Achieving this, however, means work to maintaining your garden which might bring a different feeling if you are not used to it. If your garden is too big you may struggle to keep the grass cut or it might not be affordable to pay for maintenance. Think about this when buying a property.

Neighbours. An old Bulgarian saying claims that having a good neighbour is more important than having a good family close by. This is something that most of our past clients have experienced. People in the rural areas are used to making friends with their neighbours. They will probably come and greet you on your arrival and bring fresh eggs the first week you move in. Most houses have no door bells so the neighbour might barge through your garden. Do not accept this as anything rude! It means that you are also welcome to his/her house anytime you need help. Even if you cannot communicate you will be invited at a dinner as soon as you settle in. You may postpone the invitation for few days but they may be insulted if you do not go. Bring a small gift – box of chocolates or bottle of wine! Be prepared to answer questions about family and your home country as Bulgarians are quite curious by nature. In return they will also tell you about their family, sometimes a bit more than you need or want to hear!

Language barrier. Be prepared that very few people, if any, in the village will speak your language. The language barrier will not be a problem for your shopping, sitting in the bar, getting help from the neighbours. It will be an issue to share views and speak out your thoughts or just to have fun within a bigger company. This is something that very few people realize before it happens to them. In order not to come to such a problem you may decide to choose a village where there are other people speaking your language.

Away from family. Most people nowadays are used to living away from their family. Presumably you will be moving with your partner. However if you are used to being close to the other family members such as children and grandchildren, you have to think twice before moving to a foreign country. With the communications these days it is not a problem to keep the contact with them but it may be the case that you will really miss them.

If you make the right decisions when you think of the above issues your retirement to rural Bulgaria should be a positive experience. Before you jump in it think about all the aspects, spend some time in the area you are considering for your new home and gather as much information as possible. To any questions you may have you will receive a straight and honest answer by the staff of our local offices so please ask your questions on time.