Brexit and buying property in Bulgaria
Brexit is dominating news in the UK, as Parliament struggles to implement the decision of the British people in the referendum of 2016 to leave the EU. Whatever happens, it’s very likely that the U.K.’s relationship with the EU will be different in the future.
The uncertainty and change is making many who wish to buy property in the EU anxious. They fear that it will be difficult to buy, or somehow their ownership of property in Europe will be adversely affected.
Whilst irrational fears are understandable, the reality is likely to be less dramatic.
If Britain leaves the EU without an agreement, there will be some period of adjustment. But both sides have stated that they have no intention of displacing EU citizens in the UK and UK citizens in Europe. In fact, the European Council and the European Parliament have agreed that, following Brexit, UK citizens coming to the Schengen area for a short stay (90 days in any 180 days) should be granted visa free travel, the European Council said on April 3rd.
In Bulgaria, at present, the foreigner buying property there has no automatic right of residency. It’s true that owning property is a big step along the process if someone wants to make an application, but ownership itself doesn’t give entitlement. This situation is likely to stay the same whether Britain is in or out of the EU.
And Brexit isn’t likely to change property laws in Bulgaria. The country moved from foreigners having to set up a company to own property to be able to buy in your own name some years ago. It’s unlikely they would reverse this. Also, many Bulgarians live and work in the UK, sending back a lot of money. It’s not in Bulgaria’s interest to antagonise the UK, which is the world’s sixth biggest economy.
One affect on property buying that Brexit could bring is financial. The uncertainty and parliamentary chaos in the UK will not help business confidence. As it stands, it’s likely it’ll take at least another couple of years for the UK to extricate itself from the EU If at all). The pound may soften versus the euro during this period, particularly if the failure by Theresa May and her party leads to Jeremy Corbyn and his hard left party taking power. By their own admission, their socialist policies would cause a fall in the pound. This would make it more expensive for UK citizens to purchase property abroad.
In such circumstances, British pounds converted into Euros to own property in Bulgaria is likely to prove a good value hedge. Particularly as Bulgaria is the most financially solvent country in the EU, with a budget surplus and national debt about four times less than the major economies. Its economic growth is also underpinned by Europe’s lowest personal and corporate taxes, at a flat rate of 10%.
So, in summary, Brexit is unlikely to change property laws in Bulgaria. But it could increase the cost of buying there, due to a possible fall in the value of the pound. Those wishing to buy might be advised to act sooner rather than later.