Bulgaria

Re: Why Bulgaria?

woods said:

I think that if you are buying in Bulgaria then the best place to buy is Sofia, and stick to the better parts of the city.
I think that the resorts are a serious risk but capital cities always have the best chance of holding up in a falling market.

Click to expand...

IF YOU'D READ THE POST FROM THE START AND GOT TO MY PART YOU'D SEE I WAS ACTUALLY JOKING.

Re: Why Bulgaria?

barryo said:

I have no vestive interest in selling anywhere else. I have done my figures on various places and believe Bulgaria is a risky investment. The figures just don’t add up. I have been there twice and the summer season IS only 2 months. I was there in September and the coast was a ghost town. Only rental market is July/August. This is a fact. It is also over supplied in large parts. I also seem to remember to previous poster talking up Bulgaria as a retirement country like Spain. I was there during winter and It was Snowing and freezing. Sofia is a city in a corrupt country – less risky than the resorts but still lags way behind other cities in Eastern Europe for investment criteria.
The country is extremely corrupt (Regardless of the shapes some try to put on it – let them throw their own money into that mix..) - I was there a total of 3 weeks over 2 visits and lets just say that was the solid impression left upon me while there.
If you are borrowing to invest someplace, Bulgaria would not be a wise choice as the figures and conditions don’t stack up. I don’t have any emotional or vestive attachment to any place, but I feel the need to respond to some of the nonsense you read here. The people investing there are those who are sold by the hype and the low prices (by Irish standards). I worry for these people as most can ill afford to get caught out.
If you are thinking of investing there, just to prove my point don’t take my and anyone else’s advice from this forum -
PAY FOR SOME INDEPENDENT ADVICE, WHICH WILL ADVISE YOU ON INVESTING, BE IT IN BULGARIA OR ELSEWHERE. It will be the best investment you make and may save you from investing in a noose around your neck. Just examine properly the second hand market in Bulgaria (non existent). BUYER BEWARE or BEMAD!

Click to expand...

Good Shout Barryo

Re: Why Bulgaria?

icecool said:

IF YOU'D READ THE POST FROM THE START AND GOT TO MY PART YOU'D SEE I WAS ACTUALLY JOKING.

Click to expand...

Well if you read my post you would see that I am not joking. I am still considering a purchase in Sofia. I know that it may seem like a stupid move to you but I have to spend my money somewhere. I hate to see it sitting in the bank.

Re: Why Bulgaria?

Trocaire or Goal could put it to good use if it's burning that big a hole in the pocket. Otherwise put the whole lot on red or black at a casino (take in a trip to Monaco) You would have evens chance to double your money instantly. Better odds that your other punt..and you dont have to find someone who speaks the language or no legal fees or CGT.

Whatever bet you take on - good luck

Re: Why Bulgaria?

barryo said:

Otherwise put the whole lot on red or black at a casino (take in a trip to Monaco) You would have evens chance to double your money instantly.
- good luck

Click to expand...

Not half as much fun.
We all get our kicks in different ways

Re: Why Bulgaria?

I think that people are naieve (?) in the extreme. Seems too good to be true!! If this is the way it seems then it is too good to be true. Stop dreaming lads. Stop looking for soft money. The only way to make money is by hard work, good research and taking good advice. Bulgaria/Rumania/Hungary - thread carefully. Slovakia/Germany/Poland not too bad.

Re: Why Bulgaria?

I would say tread carefully in all of the countries you mentioned. Developing and unestablished markets don't work in the same way as mature markets. It's very likely that there are major pitfalls in all of these countries.

Re: Why Bulgaria?

budapest said:

I would say tread carefully in all of the countries you mentioned. Developing and unestablished markets don't work in the same way as mature markets. It's very likely that there are major pitfalls in all of these countries.

Click to expand...

Fair comment.

Re: Why Bulgaria?

Not sure why I cannot give a proper answer just because I live here and sell property here. I have far more knowledge than most posting here proclaiming to know about Bulgaria and what a risky investment it is.

That said the main 'Bulgaria knocker' here is Auto and despite disagreements on these forums in the past, we share a similar view on the over priced and over inflated resort apartments (Sunny Beach, Bansko etc). I will not go as far as to give definite figures of losses as Auto has but do think many people will get burned.

We have many people coming here to view and buy property and many are looking to make that quick buck. The problem is many are totally unrealistic about time scales, money required to renovate old property, resale market and so on.

Bulgaria has loads to offer and is a wonderful place but it is still catching up with many other countries and still has its problems.

I believe buying more rural property (not every village is deserted Auto - many very lively large villages offer good property) is a good investment or I would not have bought 8 (and buying 9th), land is also a good investment particularly in areas around spa resorts, cities, business zones etc.

On MOPRF point about CGT - that maybe the case here if you are resident that there is no CGT but as foreigners have to buy houses through a company there is still currently 15% corporation tax (not for apartment purchases granted unless through company) but when you take money back into UK or Ireland, you will still have to pay CGT there, regardles of number of years you had property here.

Rachel

Re: Why Bulgaria?

We will just have to agree to differ on a few issues Rachel!

Firstly, I am not a Bulgaria "knocker", I just recommend investors to stay away from most of what is on offer there. If that means that I am knocking the country, then so be it, but that was never my intention.

The issue of coastal and ski resort property is where we have common ground -- we both agree that this market is largely based on a scam that combines grossly inflated prices with spurious rental income projections.

You need to make the connection between the above "house of cards" market and the mainstream local market that you deal in. If one collapses, it will of necessity drive the other down.

The issue of rural and village property is where we will differ most. In my considered view, investors in this market are paying too much, even at what seem like low prices to Irish and UK buyers, in a market where supply far exceeds demand due to emigration and population shift to urban areas. This market is strictly for lifestyle buyers only -- people who want to spend time living in rural Bulgaria. It is not for the serious investor who wants to see a return, either in rental or capital appreciation over the medium term. The only people who will make any money in this market are those selling it, and good luck to you.

Re: Why Bulgaria?

But this is where I think you are wrong - there is not an oversupply. We are constantly having to work ahrd to source properties for sale here. Bulgarians are buying cheaper properties (under 10K Euros) for investment and holiday homes as well and with many foreigners (not just Brits and Irish) buying, there is not an over supply. Quite the opposite. It is not lifestyle buyers - it is investment, it is retirees, it is holiday homes, to sell on and to rent out.

People buying to sell or to hold will and do make money - you are wrong here.

And even though coastal and ski resort properties levelling off or dropping in price, rural properties and those close to good cities and towns still rising steadily.

Re: Why Bulgaria?

travelbug,
I would suggest the implication of Bulgarian and Romanian entry into the EU will be widespread de-population of rural areas to cities within Bulgaria and beyond. This can only accelerate as the farm subsidy regime is being wound down and could not support the poor farmers of Poland, Bulgaria, Romania etc.

I would suspect the number of Bulgarians and Romanians wanting to emigrate to the west will far exceed the number of overseas investors wanting to come east.

Also the number of scenic mountainous areas in Bulgaria and Romania similar to your Stara Zagora are legion.

Property prices are low, but it is for a reason, the local population is leaving.

This same scenario happened in Eastern Germany despite massive state intervention to prop up the sclerotic east. Bulgaria is decades behind western Europe and I can't see any reason why it will not remain so for now.

At least the coastal areas are to an extent finite in size but the market will in all likelihood be killed by increasing interest rates and the exposing of shady practices among the large overseas property vendors.

So, I suspect the rural market will remain a niche market for Bulgarophiles such as yourself, while the coastal resorts will probably experience cycles of boom and bust...

Caveat emptor...

Re: Why Bulgaria?

Don't necessarily disagree with this. It is common in nearly all countries that younger people leave the villages for the cities for university, jobs etc. Do not think EU entry has or will affect this as was already the case. Sure many Bulgarians have gone abroad to work but most you speak to here really love their country and do not want to leave or if they do, it is to earn more money and then come back.

Yes sure there are many beautiful mountainous areas in Bulgaria (do not know Romania well apart from trip through to get here and what I saw was bloody awful but still!).

Rural market not for everyone. But just saying to those that do not know rural market and Bulgaria - do not knock what you know nothing about.

Rachel

Re: Why Bulgaria?

I absolutely agree with Rachel, and on all counts !

It has been somewhat tiresome to me to see over and over again comments and statements by people who have hardly spent more than a fortnight at a time in Bulgaria, hardly more than twice a year, and probably no more than three years in total at above schedule. Yet they claim to know just about everything you need to know. And even when confronted with hard data it is simply shrugged off as plain rubbish. Bias or ignorance, it is irritating to read nonetheless. So, Thank You, Rachel !

Ivan D.
__________________________
http://[URL="http://www.dukaty.com/"]www.dukaty.com[/URL]

Re: Why Bulgaria?

I believe many investors will have problems selling their properties in the next five years (no cgt after 5 years).

Click to expand...

But you still have to declare the sale to Irish Revenue and pay CGT according to the rules in ireland. CGT @ 20% currently applies on any gain no matter how long you own the property.

as foreigners have to buy houses through a company there is still currently 15% corporation tax (not for apartment purchases granted unless through company) but when you take money back into UK or Ireland, you will still have to pay CGT there, regardles of number of years you had property here.

Click to expand...

Be very careful buying a property through a company. See here and here

Re: Why Bulgaria?

[FONT=&quot]The rules at Irish Revenue on CGT would apply to a whole lot of countries, hence it is not necessarily an argument of distinction pertaining to the theme "Why Bulgaria."

Regarding the corporate tax, it relates to a totally different world. If a company conducts certain actvities, it generates a turnover. Minus the cost incurred for conducting said activities one is left with a profit, and that is what is charged with 15% tax (actually it would be down to 10 %, in order to attract business in the country). Now, with your company essentially being dormant - created just for technical reasons - your activities will be zero, your turnover will be zero, and 15% on that is a zero, too. Thus you worry about nothing here.

In fact, with a little imagination you could turn that - as well as anything in your life - into your advantage. That is, if your company generates losses (assuming you knew that the fiscal reporting in Bulgaria allows accumulation of loss) you might arrive at a situation whereby your loss is sufficient to offset any future gains. That implies your corporate profits are (close to) zero, ergo...

[/FONT][FONT=&quot]Ivan D.

http://www.dukaty.com[/FONT]

Re: Why Bulgaria?

Discussion on CGT in the context of property buying in Bulgaria is in the same category as bicycles for fish, if my feminist friends will forgive the borrowing of the phrase. Believe me, if you are one of the people who bought coastal or ski property in Bulgaria in the past few years, CGT is the least of your worries!

Re: Why Bulgaria?

auto320 said:

...if you are one of the people who bought coastal or ski property in Bulgaria in the past few years, CGT is the least of your worries!

Click to expand...

So much truth in so few words

Re: Why Bulgaria?

[FONT=&quot]Which makes me wonder what is it so different that I said about CGT.

Ivan D.

http://www.dukaty.com[/FONT]

Re: Why Bulgaria?

Thus you worry about nothing here.

Click to expand...

In bulgaria maybe not but you will have in Ireland.

Under Irish law, Irish residents are taxed when the profit (rental profit) or gain (after selling the property) is extracted from the company. The money is deemed income and taxed at their marginal rate probably 41% tax and PRSI.

Get professional tax advise in Ireland before proceeding