Banking on Bansko

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Banking on Bansko

At the end of 2007, Bulgaria was experiencing some of the world's fastest-growing property prices. But the property market in Bansko, a popular ski resort, is suffering from oversupply. The local government is planning to introduce regulations to reinvigorate the market.

Where is it? Bansko is a ski resort town in the Pirin Mountains in southwestern Bulgaria, financialpost reports.

What's so special about it? Bansko is Bulgaria's biggest and best-known ski resort and was recently awarded "Best-Developed Ski Resort in Eastern Europe" by the 2007 Great Skiing & Snowboarding Guide. The UNESCO-protected Pirin Mountains are the second-highest mountain range in Bulgaria and the sixth highest in Europe. With 85 kilometres of slopes, 30% are designed for beginners, 45% for advanced and 35% for expert skiers. The highest track point is at 2,560 metres and the longest is 16 kilometres. The ski seasons lasts from December to May.

Best-kept secrets The Mayor's Office in Bansko predicts there will be more than 800,000 tourists to Bansko this season. Undoubtedly, the appeal of Bulgarian resorts is that they are cheaper than other European alpine resorts. Accommodations start from $45 a night, and a week's pass costs about $210. Who's who? Ian Woosnam has designed golf courses in Bansko and famous skiers Alberto Tomba and Mark Girardelli have both set up ski schools in the area. What's the property market like? The Global Property Guide reports the country with the biggest increase in property prices in 2007 was Bulgaria, which rose by 30.6% nationally.

However, Colliers International's Market Report on Bulgaria finds supply of holiday homes in the Bulgarian mountain resorts grew by 52% and Bansko accounted for 78% of new-builds. Oversupply is putting pressure on prices. The local government has placed restrictions on further development. Predictions are that sales will remain level for the next few years. Buyers' guide When researching Bulgaria, The Sofia Echo is the largest English-language newspaper and its bi-monthly PropertyWise magazine offers good leads. Buying costs can be high, up to 24% to 26%. A title search and survey is advised as legal risks are high. Non-residents cannot buy freehold land, so buyers have to set up a company to own land.

What's the rental market like? Demand for quality accommodation is high, but rates are considerably lower than in many Western European resort locations. Hotel rates during the high season average $220 per night, and rents in quality resorts are $515 a week for studio apartments and up to $3,000 for luxury penthouses. What's the resell market like? The market is growing, but the resale market is unproven. Average property prices? Colliers International reports the average prices in Bansko start from $960 per square metre. Low-end properties start at about $42,000, while upmarket starts at about $120,000.

Taxes & costs Foreigners pay 10% income tax on rental income; company corporate tax is 15%; property tax is approximately 0.15%; capital gains tax is 15% and VAT is 20%.

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