Published on and written by Cyril Jarnias
Investing in Bulgarian real estate can prove to be an interesting opportunity for foreign buyers, but it also comes with various insurance obligations. In this context, understanding the mandatory insurance that accompanies these investments is essential to avoid any unpleasant surprises. While some may be tempted to postpone these responsibilities, failure to comply with legal requirements can lead to significant financial consequences. To successfully navigate the Bulgarian real estate landscape, it’s crucial to be well-informed about the different available options and choose the policies that best meet your specific needs. This article provides a detailed comparison, exploring the key aspects of necessary insurance to protect your property and yourself, thus leaving investors better prepared to face real estate challenges in Bulgaria.
Introduction to Bulgarian Real Estate
The Bulgarian real estate market: A booming sector
The Bulgarian real estate market is experiencing a spectacular renaissance in 2025, with soaring price growth that continues to attract international investors’ attention. Since 2015, prices in the real estate sector have more than doubled, showing an impressive growth rate of 121.91%. This dramatic increase demonstrates the vitality and considerable potential of the Bulgarian real estate market.
Sofia: The epicenter of real estate growth
The Bulgarian capital, Sofia, stands out as the most sought-after area by foreign investors. With high-end housing available for under €2,000 per m², the city offers unmatched appeal compared to other European capitals. Sofia has recorded a staggering average increase of 154.93% in real estate prices since 2015, according to the Bulgarian National Statistical Institute. This growth particularly benefits older housing, which saw prices increase by 158.36%, compared to 145.21% for new housing.
A diverse and attractive market
Beyond Sofia, other regions are attracting investors’ attention. Seaside resorts, such as Sunny Beach, still offer interesting investment opportunities, with apartments available for less than 1,000 euros per square meter. However, high demand makes these bargains increasingly rare, pushing investors to explore other coastal areas to take advantage of attractive prices.
Investor profiles and purchasing trends
The Bulgarian real estate market mainly attracts young people aged 35-40 with comfortable incomes. These buyers easily obtain 30-year loans from local banks, while some even have sufficient resources to purchase housing without resorting to credit. In Sofia, demand focuses on spacious properties to accommodate families, while young students or workers prefer smaller homes near universities and large companies.
Outlook and challenges
Despite a slight stagnation in transaction numbers in 2024, forecasts for 2025 remain optimistic. Bulgaria’s imminent accession to the eurozone raises both concerns and opportunities. While some buyers hesitate due to possible price increases, others see it as a chance to invest before a potential market surge.
Popular property types and regions
The market offers a wide variety of properties, ranging from modern urban apartments to vacation homes by the sea or in the mountains. Coastal regions like Varna and Burgas particularly attract investors seeking properties with high seasonal rental potential. In urban areas, demand focuses on new or renovated apartments, with a marked preference for central neighborhoods offering good quality of life.
A legal framework favorable to foreign investors
Bulgaria has significantly relaxed its property ownership legislation for foreigners, particularly since joining the European Union. EU citizens can now acquire real estate properties in their own name, greatly simplifying the purchasing process. Furthermore, the country offers an attractive tax regime, with a corporate tax rate of only 10%, the lowest in the EU, and a 10% flat tax on personal income.
Good to know:
The Bulgarian real estate market enjoys strong appeal due to relatively low living costs and favorable legislation for foreign investors, allowing non-residents to acquire real estate without major restrictions. Supported by a growing local economy, prices remain competitive, with Sofia, Plovdiv, and the Black Sea coast (Varna and Burgas) leading real estate transactions. City apartments, popular with young professionals and expatriates attracted by expanding technology sectors, coexist with vacation homes along the coastline, sought after by Western retirees. Investors show particular interest in properties with potential rental yield, while recent measures to encourage energy efficiency make new constructions even more attractive. Finally, the varied profiles of buyers include both Bulgarians from the diaspora seeking to return and Europeans looking for second homes, thus shaping a diverse and dynamic landscape.
Comparison of Mandatory Home Insurance
Mandatory Home Insurance in Bulgaria
In Bulgaria, home insurance is not mandatory for owners or tenants. However, certain situations may make insurance necessary:
- Co-owners are required to take out liability insurance towards the condominium, neighbors, third parties, and potential tenants
- Banks generally require home insurance for mortgage approval
- Some condominiums may impose insurance in their regulations
Although not mandatory, home insurance remains highly recommended to protect your home and belongings.
Minimum Coverages and Protections
Home insurance in Bulgaria typically covers:
- Damage caused by fire, explosion, lightning
- Natural disasters such as storms, floods, earthquakes
- Theft and vandalism
- Water damage
- Liability of the owner or tenant
It’s important to note that Bulgarian insurance mainly covers the contents of the home, unlike some countries where the building is also included by default.
Differences Between Insurance for Owners and Tenants
- The building and its structures
- Fixed equipment (boiler, air conditioning)
- Their liability as owners
- Their personal belongings
- Their liability as tenants
Comparison of Major Bulgarian Insurance Companies
DZI: – Advantages: Wide range of products, extensive network – Disadvantages: Sometimes high rates
Bulstrad Vienna Insurance Group: – Advantages: Customizable offers, responsive customer service – Disadvantages: Sometimes lengthy claims process
Allianz Bulgaria: – Advantages: Comprehensive coverage, 24/7 assistance – Disadvantages: Less flexible for small budgets
Euroins: – Advantages: Competitive rates, easy online subscription – Disadvantages: More limited agency network
Tips for Choosing Home Insurance in Bulgaria
1. Accurately assess the value of your belongings to avoid underinsurance or overinsurance
2. Compare deductibles offered by different insurers
3. Check the exclusions of each contract, especially for natural disasters common in Bulgaria
4. Opt for separate liability insurance if it’s not included in the home insurance contract
5. Request quotes from several companies and negotiate rates
6. Inquire about additional services like legal assistance or emergency repairs
7. Read the general terms and conditions carefully before signing, especially regarding claims reporting procedures
By following these tips, you can choose home insurance that meets your needs while respecting the Bulgarian legal framework, even though it doesn’t impose strict obligations in this matter.
Good to know:
In Bulgaria, mandatory home insurance differs depending on whether you are an owner or tenant. Owners must take out insurance covering basic risks such as fires, floods, and natural disasters, while tenants are required to subscribe to liability insurance to cover damages they might cause to the property. Companies like DZI, Bulstrad, and Armeec offer various suitable coverages, although DZI stands out with flexible options and competitive premiums, while Armeec provides responsive customer service and additional services for owners. Tenants might prefer Bulstrad, which offers extensive liability protection at an attractive cost. When choosing your insurance, carefully compare deductibles and coverage limits and check the specific exclusions in each contract to ensure you comply with legal obligations while finding the solution best suited to your needs.
Property Owner Liability in Bulgaria
Legal Framework of Property Owner Liability in Bulgaria
In Bulgaria, property owner liability is governed by the Civil Code and the Insurance Code. The Bulgarian legal system recognizes the principle of liability for things, according to which the property owner is responsible for damages caused by it. However, unlike some European countries, Bulgaria does not impose mandatory home insurance on owners, which can leave some property owners vulnerable in case of incidents.
Owner Obligations Regarding Maintenance and Safety
Property owners in Bulgaria have a legal obligation to maintain their property in good condition and ensure the safety of occupants and visitors. This involves:
- Regular maintenance of common facilities in buildings
- Prompt repair of structural defects or faulty equipment
- Implementation of adequate safety measures, such as lighting in common areas
- Compliance with current construction and safety standards
Failure to comply with these obligations can trigger the owner’s liability in case of accidents or damages.
Typical Situations Involving Civil Liability
Property owner liability can be triggered in various situations, including:
- Falls due to poor maintenance of stairs or floors
- Injuries caused by falling poorly secured objects
- Damages due to water leaks or fires resulting from poor maintenance
- Accidents involving defective equipment in common areas
In these cases, the owner may be held responsible for bodily injuries or property damages suffered by victims.
Importance of Liability Insurance
Although not mandatory, liability insurance is highly recommended for property owners in Bulgaria. It provides financial protection in case of third-party claims for damages occurring on the property. This insurance can cover legal fees, compensation, and medical expenses related to an accident, thus offering peace of mind to property owners.
Specificities of the Bulgarian System Compared to Other European Countries
Unlike countries like France or Germany, where home insurance is often mandatory, Bulgaria gives more freedom to property owners. However, this approach can expose uninsured owners to significant financial risks. In comparison, the Bulgarian system places more emphasis on the individual responsibility of the owner, which can lead to more frequent disputes in case of accidents.
Evolution of Insurance Practices in Bulgaria
There is a growing trend among Bulgarian property owners to voluntarily subscribe to liability insurance, reflecting increased awareness of potential risks. This evolution is gradually bringing Bulgarian practices closer to those observed in other European countries, where insurance coverage is more systematic.
Good to know:
In Bulgaria, property owner liability is governed by laws that require owners to maintain their property in good condition to prevent material and bodily damages to third parties. Owners must ensure their property presents no dangers, such as defective stairs or unstable balconies, as accidents can trigger their civil liability. It is strongly advised to subscribe to liability insurance, which is not always mandatory but highly recommended, to protect against potential costly claims. Compared to other European countries where liability insurance may be mandatory, Bulgaria stands out with a more flexible framework, but subscribing to this insurance often proves to be a wise choice to avoid unexpected financial expenses and comply with current safety standards.
Rental Risk Coverage
Rental Risk Coverage in Bulgaria
In Bulgaria, the situation regarding home insurance for tenants differs significantly from that in other European countries. Unlike many Western countries, home insurance is not mandatory for tenants in Bulgaria. This particularity is partly explained by the fact that only 5% of Bulgarian real estate properties are insured against natural disasters, mainly due to a lack of awareness about the importance of insurance and a perception of high costs.
Types of Available Coverages
Although not mandatory, tenants in Bulgaria have access to different insurance options to protect their personal belongings and cover themselves in terms of liability. The main available coverages include:
- Personal property insurance: Covers the tenant’s personal effects in case of theft, fire, or water damage
- Liability insurance: Protects the tenant in case of damages caused to others or the owner’s property
- Multi-risk insurance: Combines personal property protection and liability coverage
Costs and Options
Home insurance prices in Bulgaria are relatively affordable, starting from 5 to 10 euros per year for basic coverages. However, rates vary considerably depending on the extent of coverage, the value of insured belongings, and the location of the property.
For owners wishing to protect themselves against rent defaults or damages to their property, specific options exist:
- Non-occupant owner insurance (PNO): Covers risks related to property rental
- Rent default guarantee: Protects against non-payment of rent
Main Market Players
The insurance market in Bulgaria is dominated by international companies, particularly in the life insurance sector. The main players include:
- DZI Life Insurance
- Bulstrad Life Vienna Insurance Group
- Allianz Bulgaria Life
- Euroins
- Levins
These companies offer a varied range of insurance products, including options for tenants.
Selection Criteria for Tenants
When choosing an insurance policy, tenants in Bulgaria should consider the following elements:
- Coverage extent: Ensure all relevant risks are covered
- Coverage limits: Verify that insured amounts correspond to the actual value of belongings
- Deductible: Evaluate the amount to be paid out-of-pocket in case of a claim
- Insurer reputation: Choose a reliable company with a good claims settlement history
- Rates: Compare offers to get the best value for money
Although not mandatory, rental insurance in Bulgaria can offer significant peace of mind to tenants, protecting them against potentially significant financial losses in case of incidents.
Good to know:
In Bulgaria, tenants can subscribe to personal property insurance to protect their possessions against damages or theft, and to liability insurance to cover accidental damages caused to the rented property or to third parties. These insurances are not generally mandatory as in some European countries, but highly recommended, particularly in large cities where risks are higher. Costs vary depending on the chosen coverage, but a basic policy can start from 50 euros per year. Owners can also opt for specific insurances protecting against rent defaults or damages, although these are less frequently recommended compared to other European markets. Among the main market players in Bulgaria are Allianz, Bulstrad, and Groupama, all offering various options adapted to local needs. When selecting an insurance policy, it’s crucial for tenants to check exclusions, coverage limits, and general terms and conditions to align protection with their specific needs.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
