A ground-floor commercial unit is the classic alternative to a buy-to-let flat. The tenants are businesses, leases are longer, and interior works are often carried out by the tenant. But the risk is different: a bad month for your tenant is a bad month for you, and an empty shop can stay empty for a long time. Here is how to think before you buy.
Location: footfall decides
For homes, location matters; for commercial units it is almost everything. The same floor area two hundred metres away can be worth something completely different.
- Footfall. Walk the street at different times — morning, lunchtime, evening, Saturday. How many people pass the actual shop window, not the opposite pavement?
- Anchors. Proximity to a metro station, a stop, a school, a supermarket, a pharmacy or a market generates daily traffic.
- The right side of the street. The side people walk home on in the evening often brings more customers.
- Competition nearby. Many empty units on the street are a signal, not an opportunity.
- Future changes. Planned street works, a new building, a pedestrian zone or a car park can change the flow — in either direction.
Frontage and access
A retail tenant pays to be seen and reachable:
- façade width and length of the shop window;
- entrance directly from the street, without steps or with room for a ramp;
- ceiling height and the possibility of signage on the façade — which usually needs consent and permits;
- corner units with two windows usually let more easily;
- a basement attached to the unit is useful as storage, but rarely earns rent as retail space.
Technical and legal checks
- The unit's status. Check that the documents describe it as a shop, office or atelier — not a flat being used as a shop. Change of use is a separate procedure with requirements under the Spatial Planning Act, covered in our guide Change of use.
- Power supply, ventilation, water and drainage. A restaurant, hair salon or medical practice each have different requirements. A unit without the option of ventilation is limited to fewer kinds of tenant.
- The condominium. In a residential building, some activities — a bar with music until late, for example — lead to conflict. Check what the general assembly has decided and which uses are realistically possible.
Tenants: who, and for how long
A good ground-floor tenant is a business that needs exactly this location and has invested in the unit. Consider which profile is realistic:
- pharmacies, bank branches, chains — long leases and stable payments, but specific requirements for size and location;
- local services — hairdresser, vet, optician, clinic — often long-standing tenants in the neighbourhood;
- food and drink — higher rent, but also higher risk and wear.
Concentration risk is the biggest difference from residential: when the only tenant leaves, the income stops completely. So build a realistic empty period between tenants and a cost for preparing the unit into your assessment. How to calculate net yield with these costs is in our guide Rental yield.
The commercial lease: the owner's view
Bulgarian law (Arts 228–239 of the Obligations and Contracts Act) regulates leases briefly, so almost everything depends on the contract:
- Term. The general 10-year cap in Art. 229 does not apply to commercial transactions. An open-ended lease can be terminated on one month's notice (Art. 238) — for an investor that means uncertainty. A fixed-term lease is better, if needed with an early-exit option against compensation.
- Indexation. A clear formula — for example linked to a consumer price index — and the date it applies. Without a clause, the rent cannot be changed unilaterally.
- Security. A deposit or a bank guarantee large enough to cover several months' rent and reinstatement of the unit.
- Works and improvements. Who carries out the fit-out, who owns the improvements and in what condition the unit is returned.
- Registration and notarisation. If you sell the unit, a fixed-term lease binds the buyer for its full term when it is registered in the property register (Art. 237) — which is why buyers value a unit with a good tenant. Notarised signatures allow a quick enforcement order under Art. 417(3) of the Civil Procedure Code for money claims — but not for recovering possession.
The view of the business renting the space is covered in An office or shop for your own business.
Tax
- Rent received as an individual. Taxed at 10% after 10% statutory deductible costs. When the tenant is a company or self-employed person, the tenant withholds and pays the tax when paying the rent.
- VAT. Renting out non-residential premises is a taxable supply. If you are VAT-registered, you charge 20% on the rent; if not, there is no VAT. Rent counts towards turnover for mandatory registration, so with a larger portfolio keep an eye on the threshold.
- Property tax is due from the owner under the Local Taxes and Fees Act; the main-residence reduction does not apply to a shop.
- Selling. The exemption for one home held over 3 years does not apply to a shop or office. The sale of up to two properties of any kind held over 5 years is tax-free. More in Tax when selling property.
Whether to buy personally or through a company is worth deciding with a tax adviser before the deal — the structure is hard to change afterwards.
In short
- You are buying footfall, frontage and access — check them at different times and on different days.
- The unit's status, technical capacity and the condominium determine which tenants are possible.
- Allow for an empty period — with a single tenant, income is all or nothing.
- A fixed-term lease with indexation, security and registration also raises the resale value.
- Rent is taxed differently depending on who the tenant is; the one-home exemption does not apply to a shop.
If you are considering buying a commercial unit or want a valuation of yours, call us or come into the office. We will look at the location on site and run a realistic income calculation.
This information is general and does not replace individual legal or tax advice. Verified as of October 2026.
