Resort Properties in Bulgaria: Management Fees, Management Contracts and Liquidity Traps

1How does an apartment in a resort in Bulgaria differ from a regular apartment in a city?

The main difference is that in a holiday apartment you are buying not only a unit but also a package of services that is not under your control: security, pools, landscaping, reception, elevator maintenance and sometimes managed rental as well. The package is governed by a contract, and the contract - not the price of the apartment - is what determines how much the property will cost you each year and how easy it will be to sell.

Bansko, a ski resort in the southwest of the country, and Sunny Beach and the other Black Sea coast resorts are largely built from large complexes built in a single wave, with hundreds of privately owned units, a considerable share of them owned by foreigners who do not live in them. This structure creates three weak points: sharp seasonality in income, dependence on a single management company, and a narrow pool of buyers on the day you want to sell.

2What is a "closed residential complex" under Bulgarian law and why does it matter to you?

The Bulgarian Condominium Management Act (ЗУЕС) sets a special arrangement for a closed-type residential complex: management of the common areas in it is governed by a written contract, with notarized signatures, between the developer and the unit owners. The contract is registered on each unit's card in the register, and can be asserted against any future buyer of that unit.

In plain words: someone who buys a second-hand apartment in such a complex steps into the seller's shoes under the management contract, even if he never signed it. According to Bulgarian legal literature and Supreme Court case law, for a complex to be considered "closed" it requires, among other things, at least four units in a condominium regime and restriction of access by outsiders, and the developer's intention must be reflected in the planning documents. The classification question is not technical: it determines whether the contract or the law's general arrangement applies to you.

3How are management fees set, and what happens when other owners do not pay?

In a closed complex management fees are set according to the contract, and are usually calculated by the unit's area plus a share in the common areas. In a regular condominium the law sets a different arrangement: ongoing expenses for maintaining the common areas are divided according to the number of owners and occupants, and someone who is absent for more than a month pays a reduced share of the ongoing expenses for the period of absence. The gap between the two arrangements is a constant source of disputes between owners who do not live on site and the management companies.

The significant risk is not the amount of your management fee, but the collection rate across the entire complex. When a large share of owners stop paying, the management company cuts services, the debt to suppliers (electricity, water, security) accumulates, and the complex deteriorates. The decline in the level of maintenance harms the value of all the units, even of those who paid on time. Such cases have been documented in the Bulgarian media in complexes on the Black Sea coast.

4What do you check in the management contract before committing?

The check must be carried out on the contract actually registered, and not on a draft presented by the agent. These are the clauses we check in every transaction:

5Managed rental and a guaranteed yield: what to watch for?

Many developers in the resorts offer, alongside the sale, a managed-rental contract, sometimes with a "guaranteed yield" for a few years. The promise is worth exactly as much as whoever stands behind it: the operating company, its financial condition and the security it gives. A guaranteed yield significantly higher than the market allows is sometimes a disguised discount on the price, built in advance into the apartment's price.

• Check who is the party making the commitment - the developer, a subsidiary or an external operating company - and what happens to the commitment if it is sold or runs into difficulties.
• Check whether there is security (a bank guarantee, a deposit) or whether it is a contractual commitment only.
• Check the limits on personal use: managed-rental contracts sometimes limit the owner to a few weeks a year, and not in season.
• Check the terms of exit from the rental contract and its effect on a future buyer.

Short-term rental is subject to registration requirements. Under the Bulgarian Tourism Act, guest rooms and apartments that are not classified are registered in an electronic register kept by the mayor, and the registration number must appear in every listing on a rental platform. From 20 May 2026, European Regulation (EU) 2024/1028 applies, which strengthens the oversight and information-sharing mechanisms with platforms; a listing without a valid registration may be removed. The details of taxation and registration are in a separate article on renting out property in Bulgaria.

6Why is it hard to sell a holiday apartment in Bulgaria, and how do you plan an exit?

The short answer: the pool of buyers is small, and the supply within the complex itself is large. In a complex of hundreds of identical units, every seller competes with other sellers from the same building, and a large share of potential buyers are foreigners examining the market from afar. In winter on the coast, or in summer in Bansko, the market is almost dormant.

Therefore the exit is built before the entry:

1. Check how many units in the complex are currently offered for sale and how long they have been on the market.
2. Prefer units that have a distinct advantage within the complex (floor, view, size), and not the cheapest unit.
3. Make sure the management contract will not become a burden on a future buyer - a fair and transparent contract widens the circle of buyers.
4. Make sure the building has a valid use permit and that the unit is registered as an independent unit in the register, so that a future buyer can obtain financing.
5. Keep all purchase and improvement documents - they are the basis for calculating capital gains tax in Bulgaria and in Israel.

7How much tax will you pay in Bulgaria on the day of sale?

According to the PwC tax summary (as of August 2026), a non-resident who sells real estate in Bulgaria is liable to a final tax of 10% at source on the gain, calculated as the sale price less the documented purchase price, with a statutory deduction of 10%. The known exemptions - the sale of one residential apartment a year after three years of holding, and up to two additional properties after five years - are defined as applying to residents of Bulgaria and residents of EU and EEA countries. An Israeli resident is not included in this definition, so it should not be assumed that the exemption will apply to him.

In Israel, the gain on the sale of a property abroad is subject to capital gains tax, and under the tax treaty between Israel and Bulgaria, Israel grants a credit for the tax paid in Bulgaria, up to the amount of the Israeli tax on the same income. It is worth calculating the expected tax in both countries already at the purchase stage, because it directly affects the net yield.

8Before signing: how we accompany a purchase in a resort

When buying a holiday apartment we start from the document most buyers do not read - the registered management contract - and examine it together with the position on debts in the complex, the validity of the use permit, the registration of the unit and the terms of the managed rental. In parallel we build with the client an annual cost calculation and an exit tax calculation, so that the decision is made on the basis of the net yield and not on the price alone.

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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.