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Bulgaria before Bagels....

Is it possible to tear off a quick blog in just 10 minutes before rushing to grab coffee and bagels on my way to the office? Well I am going to give it try!

Stream of consciousness about the market in Sofia at the moment is that it is really at the low water mark on the rentals front, very tough to gain traction.

There is the new landlord/tenant tax situation to contend with. If you are a company renting from an individual you are now charged with the states responsibility to act as a 'pro-bono' tax collector for 'Batko Boiko' (Boiko Borisov)! What that means is that 10% of the rent is withheld at source and the tenant has to administer payment of that sum to the fiscal authorities one month in arrears. It is just one of those additional hidden burdens and costs of entry to market that you may not realise you are going to face before investing or working in BG! ..of course great business for accountants (..errr or should I rather say glorified book-keepers?)

In BG as most ‘accountants’ perform the function of passive book-keeping, rather than pro-active financial consultancy, as we might come to expect in the UK. Of course you pay a lot more for it in the UK so I guess it all evens out! ...That said it would be a step forward if the accountancy industry in BG had clear standards and was more strictly regulated, so that you know what you have the right to expect and what not to expect, in terms of their services ….anyway I digress, where were we market update yes that’s it! 

With the crisis not only have we had fewer tenants, willing to pay less rent, (understandably in a renters market!) but also a slight increase in late payment/non-payment of rent with one corporate client 3 months in arrears without the cash flow to pay their rent. In the end we had to send this client a Notary Invitation ('Notarialen Pohanite') basically a formal late payment notification/eviction order, luckily it worked and they have now paid in full!

As for sales with the lack of liquidity in the market and high interest rates from banks the nascent middle classes are still feeling the pinch. As a result demand is holding up for 1 bed properties under 55,000 Euros however a vast swathe is cut through the middle of the market with buyers unable to get financing. There is still some activity in the high end residential segment for prime property at 160,000 Euros and above where high net-worth individuals with no need for financing are driving some deals through.

Good news that I enjoyed reading, after browsing Twitter, (I am new to the Twitterverse!), was to find that a huge Mall is going up next to the IKEA in Simeonovo and that as I had predicted, it would provide the stimulus, or as my father says 'Positive KITA' (i.e. Kick In The A**e!) for the authorities to pull their fingers out on completion of the ring-road! This will be a real boon for all those cart-before horse investors in property along the ring-road, who found themselves lumbered with Spa-Centre/Vitosha ski-lift apartments that nobody wanted to rent due to grinding bottle necks. Hopefully the infrastructure and facilities will greatly improve rental/sales prospects for those with the patience & wisdom to wait.

Must dash off now to the Notary to help some UK clients with a POA.

Now how long did I take to dash this off and post it 18 minutes well not quite the 10 I had allocated, but at least as ever, true to form!

Sofia Casa

James Flint

TAGS: Sofia Property, Europe Property

, Bulgaria Property

James Flint

James Flint

Director & Owner of Real Estate service SofiaCasa, JamesFlint (BA Hons., MA, MSc) is based in the Bulgarian capital full time.

Having worked hard to invest wisely & understanding local business culture in Bulgaria, James’s inside knowledge & expertise regularly helps clients with their property investments in Sofia where he provides facilities & property management, project management, refurbishment & interior design.


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