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Investors offer home leases with purchase option

Wednesday, Apr 22, 2009

Lease options will be one of the new schemes to be offered by investors during the BalPEX real estate exhibition, which will take place in Sofia’s Inter Expo Center between April 24 and 26.

Investors will showcase more than 150 projects, both completed and under construction, said Veneta Krasteva, managing partner at the event.

One reason why the lease option is more appealing than a mortgage is the smaller down payment of usually three rents versus 20-30% co-financing required by banks, said Rosen Plevneliev, manager of property developer Lindner Immobilien Management.

Moreover, the scheme enables homebuyers to avoid value-added tax (VAT) payments.

The buyer also has two or three years to assess the property and decide whether to buy it or extend the rental agreement, Plevnaliev explained.

Another option is the family account available in Spain where a fresh bank deposit is fed for four years and then the government guarantees tax breaks for the property purchase, explained Mauricio Mesa Gomez, Hercesa country manager for Bulgaria and Romania.

The only incentive currently offered in Bulgaria is waiving the interest payments on homes of up to BGN 100,000 purchased by spouses aged up to 35 years.

Hercesa offers a property purchase scheme where the buyer pays just 25% of the price until obtaining right of use, with the other installments distributed at five steps over a two-year period.

Israel-based AFI Europe offers a two-year grace period for buyers to live in the new home, with 20-30% of the price payable in advance and the remainder in 24 months.

The credit market is expected to start to thaw in a year and a half and now is the time for homebuyers to sign up to the scheme, the company’s country manager for Bulgaria, Shimon Ben Hamo, said.

The prices of quality homes will not go down as they are tied to quality guarantees by the developers, predicted Plamen Miryanov, head of local real estate developer Arteks Engineering.

(Dnevnik)

Source: Dnevnik a.m.