If you decide to buy property in Bulgaria you will need to pay several other expenses. In order not to lose profit from investments, you should consider each deduction item in more detail.
Annual payments after purchasing a property consist of annual taxes payments and individual operating costs:
- Annual tax payments – Taxes in Bulgaria are considered to be among the lowest in Europe. Property owners need to pay 2 annual taxes (if the owner rents out the property, income tax is also paid):
- Annual property tax. If you decide to buy a house in Bulgaria, you should know – every property owner – whether an individual or a legal entity – is required to pay an annual property tax. If a building belongs to several owners, then they pay tax in proportion to their shares. The tax base for companies is the real estate book value. For individual investors – the price of real estate determined by the territorial tax service (tax assessment). Average tax rate is the same for legal entities and individuals – it is 0.15%. To be paid in four equal installments by March 31, June 30, September 30 and November 30. Firms and individuals who pay the tax before March 31 receive a 5% discount. Important! The tax is not levied on the market value of the property (actually paid for the property), but on the tax assessment of the property, which, as a rule, is 40-50% of the market value of the investment object;
- Communal tax. The council tax is a fee for waste removal. The cost of household waste collection is set by local authorities. It is determined by the book value of the property, the prestige and traffic congestion of the area. The tax rate hesitates between 0.2-0.3% per year depending on the area. The municipal tax is paid simultaneously with the usual real estate tax. The tariff is the same both for legal entities and individual investors;
- Income tax. Paid only if you rent out the property. Income tax is 10% of the amount received from the tenant.
- Individual costs. Payments for water and electricity are paid according to meter readings installed in each apartment based on tariffs:
- Electricity: the country has two tariffs – daytime (currently costs 10 euro cents per 1 kW/h) and night (5 euro cents per 1 kW/h);
- Water – 1.10 Euro/cubic meter;
- Electricity and water cost 50-100 euros per month. Most bills can be paid at your local bank or even with an automatic withdrawal service;
In addition, owners usually pay for additional services, such as telephone communications and the Internet. Even the most cheap properties for sale in Bulgaria include base annual payments you should pay attention to.
Approximate tariffs:
- Telephone: installation of a new line – 10-15 euros; monthly subscription fee – 7-10 euros;
- Internet: installation of a new line – 15-20 euros; monthly subscription fee – 10-15 euros;
Building maintenance is also paid for by the owners, but it is calculated differently.
In general, real estate investment payback period average from 5 to 10 years. This includes support for city real estate, usually with cleaning of entrances, costs of electricity, security and periodic repairs of the building. In this case, the meeting of owners makes a decision about which personnel and for what remuneration will provide these services, and depending on this, monthly contributions are formed.
A different situation is observed with newly built facilities in Bulgarian resorts. New generation resort properties are apartment complexes that have a territory and offer many amenities to their owners (swimming pool, children’s and sports grounds, parking, reception and security, wellness center, shops, etc.). Return on investment in real estate in this case, will be approximately 10-15 years. Resort infrastructure requires constant maintenance, so such facilities are characterized by the presence of a so-called “support fee”. It involves caring for the territory of the complex (holistic maintenance of the complex – landscaping, maintenance of the pool, lighting of the territory, cleaning of common areas, year-round and 24-hour security, garbage removal). The support fee is paid once a year, its amount is different for each object, but ranges from 6 to 12 euros per year per sq. m. m.
If you own a private home, the calculation of return on investment in real estate is very individual and depends on you and your desires. If you permanently live in your home, then you can carry out the main care of it yourself. If the house is used for periodic recreation, then it is advisable to take care of concluding an agreement with a security company. You may also need the services of a gardener or home assistant.
