If you are a resident of the UK buying property in Bulgaria, whether as an investment, holiday or retirement home, or to live permanently, you will have to perform one or more currency transactions to complete your property purchase abroad.
Although not as obvious a choice as perhaps buying property in France or Spain, property buying in Bulgaria is on the rise, with many people choosing it as a place in which to retire, or to invest in with a view to making capital growth.
Reason for Buying Property in Bulgaria
There are many reasons for choosing Bulgaria to purchase property as it increases in popularity:
- Bulgaria is surrounded by beautiful coastlines, calm, clear seas and healthy air
- Its 4 seasons ensure you have guaranteed sunshine in the summer, and are able to enjoy the Bulgarian mountain and ski resorts in the winter
- A variety of cuisine is offered, taking samples from its neighbours Greece and Turkey to form attractive dishes for locals and foreign travellers
- Buying property in Bulgaria and living costs are substantially lower, with eating and drinking inexpensive. An average bottle of beer is less than a euro.
- Entry into the European Union is planned for 2007
A Place in the Sun Magazine - Buyers Guide offers more information about buying property in Bulgaria.
Foreign Exchange for Buying Property in Bulgaria
Whatever your reasons, it is a serious investment, and as such requires planning, especially if you are buying a new ‘off plan’ property where you will be required to make several 'stage payments' during the construction of your property. With foreign exchange services from HiFX you can be sure you get the best rate of exchange available which will save you money on your purchase.
For illustration purposes, let us assume that you are a UK resident wishing to buy property in Bulgaria. The developer will require a deposit in Lev’s or Euros straight away, and then further "stage payments" during the construction over the next 18 months, with a final payment upon completion. You will know the price of the property in Levs or Euros and this should not increase unless you upgrade the specification of the villa.
The actual cost in Sterling will be determined by the timing of your currency purchase. Naturally, if Sterling strengthens during construction, the cost of buying your property in Bulgaria will decline but if the Bulgarian Lev strengthens then your costs will increase - i.e. a stronger Lev means your purchase will be more expensive! (This will also apply to those purchasing a straight 're-sale' property where there is a gap between the offer being accepted and the completion of the sale).
If you have strong views about future exchange rates, you could wait to buy your currency at some stage between agreeing to buy the property in Bulgaria and the date that currency is required. This applies to either buying (and paying for) all of the currency (a spot trade) or fixing a rate (a forward contract). Either way you are exposing yourself to currency risk. The foreign exchange specialists at HiFX can advise you on the best time to fix your exchange rates which will ensure you are getting the best deal available on your currency transfer.
Remember: You would never agree to buy a property in your country of residence if you did not know how much it was going to cost you; if you agree to buy property in Bulgaria without fixing the exchange rate at the outset, you are taking a gamble.
Don't panic! If you are still confused, we have a team of dedicated specialists who will happily explain the various strategies mentioned above, and keep an eye on the market for you. Please do not hesitate to call with any questions that you may have.
Since its foundation in 1998, HiFX has helped over 40,000 private individuals with foreign exchange such as buying and transfering foreign currency, many of whom buy property in Bulgaria.
If you would like further information on how to buy foreign currency for property in Bulgaria or any other country, and how to obtain the best exchange rate, please call our Private Client Desk on 01753 859159 or alternatively visit the HiFX call me back page to have one of our representatives call you at your convenience.