Expenses in Bulgaria
It`s not possible to compare living costs in Bulgaria and Western Europe. Living costs in Bulgaria are extremely low! For example the food is generally twice cheaper than UK. House insurance: around 100-200 . EURO per year depending on the type of house, together with the belongings and furniture inside. For a property of price 30,000 . EURO insurance against theft, flood and fire costs about 125 . EURO per year with a decent insurance company like Allianz. Gas: the gas system network is not developed in Bulgaria yet. People here mostly use electricity to cook. For heating: there are central heating systems in the big cities: monthly costs for a 2-bedroom apartment around 120 . EURO. In the small places people use charcoal and wood, which is even cheaper way to heat a house. For electricity, when used for cooking, light or hot water one pays about 30 . EURO monthly. Local and national taxes for owning a property: depending on the place where the property is located, the most expensive area is the capital Sofia, where the annual taxes of 2 bedroom apartment are around 150 . EURO per year, but the rest of the country is around 80 . EURO per year.
To employ a gardener or maintenance man or builder you will not pay much. The average salary in Bulgaria is 200 . EURO per month.
Property and garbage tax is 0.15% from the tax evaluation of your property in Bulgaria.
Prices of Communal Expense and fuel in Bulgaria (for physical persons) in BGN per unit:
Water /1 m3/ - 1,56
Electricity /kW/h - 0,16
Petroleum/ l/ - 0,90
Benzine /l/ - А95 - 1,95, А98 - 2,06
Diesel - 2,20
Bus ticket in BGN: 1.00
Taxi- 0,90- 1.00за км.
Prices of nutrition products. (January 2010):
White bread - 0,70 BGN.
Milk 1l-3, 0% - 1,60 BGN
Beaf 1 kg. - 10-18 BGN
Pork meat 1kg - 7 - 11 BGN
Chicken meat - 5 - 8 BGN
Fish - 5 - 11 BGN
A COMPANY FOUNDATION AND TAXATION
The company can be of every type – a sole proprietorship, collective ownership. A company foundation is impossible without an address registration, juristic address. These can be residential (apartments, houses, villas) or commercial properties (hotels, restaurants etc.). The real estate’s price is not important. Property purchase is drawn up with the founded company. The purchase is drawn up in the notary’s office and is registered in the Court, when is issued a Notary Act, proving the owner’s rights. There is a temporary possibility to register at a rented address.
When a company is being founded, there is needed the presence of all founders or a mandatory presence of one of the founders, who will belong to the Managers. When a personal presence of the others founders is impossible, there will be needed copies of first pages of their passports and a personal signature on the original foundation documents.
Necessary documents for a company foundation – international passport;
All other documents (juristic address, notary certificates, statute etc) will be prepared on spot.
The statute capital of every type of company – not less than 2 BGN. The law does not regulate the founders’ number, but usually they are not more than 4-6 persons, possibly members of one or several families. In the company foundation documents is possible to be included different kinds of activity, which cover all the industry branches.
1.Juristic person taxation:
A corporate tax (if the enterprise operates with a wide number of activities) – there is paid a common tax: 10% of revenue.
When a real estate or a new construction property (when there is a use permission) is acquired by whatever subject (juridical or physical), the latter is obliged to deposit an annual tax declaration in the term ,determined by the state, but not more than 60 days from the date, when the property was acquired. If the real estate (land plot or land plot + construction) did not have any changes consequently, it is not mandatory to deposit additionally annual declarations.
The property annual tax rate is determined by the tax authority according to a complicated formula (by taking into consideration the location, price, amortization, export etc.) with a written announcement from the person, who is liable to tax.
The simplified formula is:
1, 5%.-property and land plot tax;
The garbage tax is determined by the administration of every inhabited point;
Example: A villa in the rural area of Varna city, 150 sq.m., land plot 700 sq.m. was bought according to the Notary Act for 60 000 BGN (an old tax value, a real market price – 100 000 BGN),
The annual tax rate amounts to:
90 BGN – a property and land plot tax;
When a property tax is paid till 31.3, there is a 5% discount
There exists a possibility, the tax payment to be executed in 4 equal installments.
The property tax rates for physical and juridical persons are equal.
Income taxes and taxes in the social sphere (pension fund, health insurance, employment fund etc.) are high enough - 37, 1%.
There are other taxes: a road tax and etc. (their rates are not very high).
2. Physical person tax.
Bulgaria is one of the European countries with lowest direct physical person revenue taxes.
A total revenue tax is from 0% to 24%, in dependence on the revenue.
The minimal annual tax free revenue amount is 2400 BGN. A revenue, gained over this amount (except salaries) are liable to other additional taxes
In 2002-2003 the government had voted several changes in the physical person revenue taxation law – a gradual decrease of tax rates. The minimal tax rate in 2003 – from 18% to 15%, in 2004 - to 12%, and in 2005 - to 10%.
Residential real estates:
Residential real estates in Bulgaria are divided into following residential property types: apartments, houses and villas (houses, which are located in villa or resort area). The average property price amounts to 650 - 1700 € /1 sq.m. In a new construction the price is 1700 - 2900 € /1 sq.m. on dependence on the sea and beach proximity or on the luxurious performance to 1700-3000 € /1 sq.m. When you purchase an apartment you have to take into consideration, that in the area, written in the Notary Act, there are included also the common areas (balcony, stairs, entrance hall areas and wall width).
The average correlation of a residential fund in Bulgaria is as follows: 60% of the people live in houses, 40% -in apartments. In large, district centers, the apartment part in the residential fund is increased, and in an immediate proximity to resorts at the Black sea coast, is increased the house part. Residential properties prices in the continental part of the country are to 25% and more lower of these properties, located at the coast, except in the district centers and capital.
The residential properties spectrum in relation to price and quality is very wide. But according to our experience, the optimal correlation: price/ quality/ property location is to be found in the areas, located on the coastline in the North and South of Varna to 60 km.
The highest quantity of commercial real estates in Bulgaria is in the service sphere and nutrition industry. According to our opinion, of a strongest interest for clients from Russia, Ukraine, Kazakhstan, Great Britain and Germany could be properties, located on the Black Sea coastline, in Albena, Golden Sands, St. St. Constantine and Helena Resorts, Varna city, Bourgas, Baltchik, Pomorie, Primorsko, Obzor, Kavarna etc, and also in the capital of Bulgaria- Sofia.
By client’s request can our company select properties in every business activity and in every point in the country. The property selection is individual by every single case.
The land in Bulgaria is divided into several types:
State fund, in this number forest fund – forests, mountains, artificial plantations and parks, forest reserve etc.
Municipal fund (which belongs to the local authorities)
Agricultural lands are located in a private and state ownership.
Land plots for construction purposes – in private, municipal and state funds.
80% of the agricultural lands are of a private ownership (private owners, enterprises, co - operations, societies). They are subdivided into several categories on dependence on the presence of a humus, irrigation possibilities, location etc.
An agricultural land can be purchased or rented (there is no limit quantity). When a land is purchased there is issued a Notary Act for Ownership rights. All the lands in Bulgaria are put into a land cadastre and according to the legislation should be used only for the relevant purposes, this means that on agricultural land plots can not be executed a construction activity, except light temporary structures (additional building up to 35 sq.m., farm buildings).
A land for construction purposes usually is purchased by private persons, companies, enterprises and organizations. When a land is purchased from the states or its subjects, there is purchased not a land, but the construction rights.
On dependence on the location, distance to the sea, presence of infrastructure the average land price is from 1 euro in rural areas till 300 euro/sq.m. and more in the most prestigious resorts in immediate proximity to the beach. The average land plot price in the suburban areas of large cities or in resort areas with a sea view and distance to the beach up to 1 km – 35-60 eur/ sq.m
The minimal land plot area for a construction in the city – 350 sq.m.
In suburban areas etc. - 500 sq.m.
For sale are land plots from 300 to 5 000 sq.m.( by request and more).
In connection with the entry of Bulgaria in EU the land price increased in the period 1998 – 2003, a from October, 2003, prices began to grow vigorously.
While the demand is growing, in same time prices increase, and proportionally the quantity of offers is decreasing (especially in large cities and suburban areas, and also in prestigious resorts).