Bulgaria in the Eurozone: What Actually Changed for Israeli Real Estate Buyers

1What exactly changed in Bulgaria on 1 January 2026?

On 1 January 2026 Bulgaria became the 21st member state of the European Union to adopt the euro, and the rate between the lev and the euro was irrevocably fixed at 1.95583 leva to the euro. The date was set in Council Decision (EU) 2025/1407 and the rate in Council Regulation (EU) 2025/1409.

The changeover did not happen in a single day. It was preceded by a period of dual price display, and the first month of 2026 was a dual-circulation period in which both currencies were legal tender. From 1 February 2026 the euro is the only legal tender. For real estate transactions the meaning is simple: every price, deposit, fee, charge and tax is today denominated and paid in euros.

2Has currency risk really disappeared for an Israeli investor?

Not entirely. What disappeared is the theoretical risk that Bulgaria would change the lev rate, not the Israeli investor's risk. The lev had been pegged to the euro under a Currency Board arrangement for many years, at exactly the rate at which the conversion was carried out, so even before 2026 an Israeli's practical exposure was mainly between the shekel and the euro.

That exposure remains in place. An investor who raises capital in shekels, finances part of the transaction with a shekel loan in Israel and receives rent in euros is exposed to shekel-euro exchange-rate fluctuations at each stage: in transferring the equity, in deposit payments to the developer, in repaying the loan and on sale. What has changed is that the chain has become shorter - there is one conversion, from shekels to euros, instead of two - and it is easier to compare prices, yields and costs against other markets in the eurozone.

3What happens to contracts, deeds and preliminary agreements signed in leva?

Existing contracts remain in force, and amounts denominated in them in leva are read from the changeover date in euros at the fixed rate, without any need to amend the contract. This rule was set in the Bulgarian law on the introduction of the euro and also applies to preliminary agreements, lease contracts and management contracts.

In practice, it is still worth checking several points in any agreement that was signed before 2026 and under which payments continue:

• Rounding: The conversion is carried out at the full rate (five digits after the decimal point) and rounded to the cent. In an agreement with many payments, it is worth fixing the exact amounts in euros in an addendum to the contract, to prevent small disputes that accumulate.
• Indexation mechanisms: A contract that provided for linkage to the lev rate or to an index that was tied to the lev should be re-examined - sometimes the index was replaced, and you must make sure the substitute mechanism is clear.
• Lease contracts: The rent is read in euros, but if the tenant continues to pay a different rounded amount, it is worth settling this in writing.
• Notarial deeds and registration: Deeds signed in leva remain valid; new transactions are registered in euros, and the value for tax and fee purposes is also calculated in euros today.

4What changed in mortgages and financing in Bulgaria?

Loans granted in leva, including mortgages, were converted to euros on 1 January 2026 at the fixed rate and, according to the banks' publications, without a conversion fee to the customer. In a fixed-rate loan the interest remained as agreed. In a variable-rate loan the benchmark index was replaced with a similar index reflecting similar market conditions, and the new interest rate cannot exceed the rate that applied before the replacement. Some banks moved such loans to EURIBOR.

At market level, the average interest rate on new housing loans in Bulgaria stood in July 2026 at 2.43%, and the annual percentage rate of charge (APRC) at 2.77%, according to Bulgarian National Bank data (as of July 2026 data). Alongside this, the central bank's restrictions on housing loans continue to apply: a loan-to-value ratio of up to 85%, a monthly repayment of up to 50% of disposable income, and a term of up to 30 years. The practical implications for a foreign buyer are detailed in a separate article on financing and mortgages in Bulgaria.

The fundamental change is that the monetary policy affecting interest rates in Bulgaria is now set directly in Frankfurt. Colliers expects the changeover to the euro to encourage gradual growth in fixed-rate loans - a point worth taking into account when examining a long-term loan.

5What has happened to real estate prices in Bulgaria since joining the euro?

Prices continue to rise at one of the highest rates in the Union. According to Eurostat, housing prices in Bulgaria rose in the second quarter of 2026 by 15.5% compared with the corresponding quarter in 2025, the second-highest rate in the Union after Portugal, and by 4.5% compared with the first quarter. In the first quarter of 2026 the National Statistical Institute reported an annual increase of 14.8%, and quarterly increases of 5.8% in Sofia and 5.9% in Burgas.

These figures are no promise of continuation. Whoever buys today is buying after sharp increases, so checking the price against comparable transactions, and not only against the developer's price list, is more important than ever. The changeover to the euro removed a layer of uncertainty, but it did not make every property cheap.

6Holding property through a Bulgarian company? There is an update to carry out

Yes. The registered capital of Bulgarian companies was converted to euros automatically by the Registry Agency, but the law also requires companies to update their constitutive documents and file them with the Commercial Register. Originally a period of 12 months from 1 January 2026 was set for this. In September 2026 the Bulgarian Parliament approved an extension of the deadline to 36 months from the date the euro was introduced.

For many Israelis who hold land or a house through an OOD company, this is a small administrative task that is easy to forget. It is worth carrying it out together with the next change that is being filed with the register anyway (replacing a manager, changing an address), so as not to run into a registration delay on the day it is urgent.

7What does this mean for reporting and taxation in Israel?

On the Bulgarian side, all assessments, taxes and fees are today calculated in euros. On the Israeli side, income and expenses are translated into shekels for reporting purposes, so someone who held a property before 2026 will hold a file of documents some of which are in leva and some in euros. It is worth keeping in the transaction file an organized conversion table of all purchase documents denominated in leva, at the fixed rate, so that the future calculation of capital gain and depreciation will be consistent.

Questions such as the currency in which capital gain is calculated in Israel on a property purchased in leva and sold in euros, or the treatment of exchange differences on a loan, are tax questions that are worth settling in advance with your accountant in Israel - before the sale, not after it.

8A checklist for a real estate buyer in Bulgaria in 2026

1. Make sure the price in the contract is denominated in euros only, and that no amounts or indexation mechanisms in leva remain.
2. For an agreement signed before 2026: prepare an addendum specifying the converted amounts in euros and the updated payment schedule.
3. Plan the shekel-to-euro conversion dates in line with the payment schedule, and examine tools for managing exchange-rate risk.
4. Check the price against current comparable transactions, not only against the price list.
5. If there is a Bulgarian company: make sure the constitutive documents have been updated for capital in euros, or schedule the update.
6. If there is a mortgage in Bulgaria: obtain from the bank the notice of the conversion and of the new interest benchmark, and check it.

9Before signing: how we accompany the changeover

The changeover to the euro simplified the currency side of the transaction, but not the legal side. We check that the contract, the payment schedule and the indexation mechanisms are correctly worded in euros, that agreements signed before 2026 have been adapted, and that the holding structure - personal or through a company - is updated in the registers. In this way the buyer arrives at signing knowing exactly how much he is paying, to whom and when.

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The information in this guide is general in nature and does not constitute legal or tax advice on any specific transaction. Every transaction is assessed on its own facts.