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28th January 2017 10:46 AM

Agricultural land investing in Bulgaria

Law

   Sat, Jan 28th, 2017 @ 10:46:22 AM 

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Agricultural land investing in Bulgaria is the best Bulgarian real estate option. Following Bulgarian Properties experts, agricultural land in Bulgaria is the cheapest of the EU. The trend is that prices increase. The agricultural is least affected by the crisis. 2010 is the most successful farmer year in Bulgaria in the last 20 years.
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Evolution of the market

BULGARIAN PROPERTIES data

 Average price of the sold properties:
2008: € 179 / 1000m² 
2009: € 128 / 1000m² 
2010: € 77 – 128 / 1000m² 
 

In 2009 there was a decrease on average of 30% compared to 2008 and of 50% compared to 2008 peaks. 2010 had a dynamical market with increased demand. There was especially interest for land investments for budgets between € 2,000 to € 15,000. The peaks in sales before the crisis were €128 to € 250 / 1000 m².

Trends

Most sold are cheap plots with good parameters. There is a dynamic trend in local buyers who expect an increase in demand by farmers and investors worldwide. The cheapest land is in North-Western Bulgaria. The most expensive and most fertile and arable land is in

Rank following price in 2007 – 2009

Following several sources, the prices of agricultural land in Bulgaria rank among the third lowest of the EU. These sources are Savills based on Eurostat data and others. Only Lithuania and Slovakia has lower prices for agricultural land. Compare the prices at the end of 2008:
Bulgaria: € 170 / 1000 m²
Ireland (most expensive): 4,000 / 1000 m²

Advantages of agricultural land investments

1. No annual tax on cultivable land.
2. Prices and demand are expected to increase in the next years. Following the research results, the price of this property type remains quite stable during a crunch.
3. The possibility of renting out to local farmers without the need for other investments in the land.
4. No limitations for resale of land – Anyone can resell at any moment. Physical persons selling land they own for more than 5 years don’t pay tax. Legal persons pay 10% corporate tax on the profit as well as all foreign land owners.

Categories

Each Bulgarian agricultural plot has a category. There are 10 categories depending on the features of the plots.
As there are:
– Soil fertility
– Climatic condition
– Relief
– Land’s technological qualities
– Suitability for production of different crops
– Limitations for use of the land
The higher the grading the better and more versatile is the land. The maximum rating is 100%.

1. First category Land with assessement over 90
2. Second category Land with assessement Ffrom 81 to 90
3. Third category Land with assessement from 71 to 80
4. Fourth category Land with assessement from 61 to 70
5. Fifth category Land with assessement from 51 to 60
6. Sixth category Land with assessement from 41 to 50
7. Seventh category Land with assessement from 31 to 40
8. Eighth category Land with assessement from 21 to 30
9. Nineth category Land with assessement from 11 to 20
10. Tenth category Land with assessement up to 10

The price of the land is formed on the basis of its category.
Examples of land for sale

Conditions for foreigners

General:
Foreigners can only buy land in Bulgaria after registering a Bulgarian limited company. This way foreigners own a company in Bulgaria and the company owns the land. The procedure to register a Bulgarian company is simple and takes about 1 week.

Exceptions:
Following people may own land in Bulgaria:
1. Citizens of a country that has a special international treaty with Bulgaria signed after 1/1/2007 and recognized by the Parliament of Republic of Bulgaria.
2. If they have inherited the property by law.
3. Eu citizens and citizens of EEA EFTA States who have permanent residency in Bulgaria.
4. Self-employed farmers of an EU country who:
—– buy land in Bulgaria for farming
—– and settle permanently as farmers in Bulgaria
—– registered under the law for BULSTAT Register for farmers

Changements as consequence of the Treaty of Accession of Bulgaria to the EU:
Since the Treaty of Accession of Bulgaria to the EU physical and legal persons may own land after 5 years (plots within the settlement zone, house with garden and land accomplishing apartments) and forests and agricultural after 7 years. The former expired on 1/1/2012 and the latter on 1/1/2014. Now all EU citizens may unlimited own land in Bulgaria.

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[Source]
Article by Polina Stoykova, Chief Operations Manager of BULGARIAN PROPERTIES

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