In the small ski resort town of Bansko - billed as "the best-kept secret in Bulgaria" - real estate experts are closely following coming changes in Britain's pension rules.

"Potentially it could explode the market," said Clive Ireland, corporate director of MacAnthony Realty International, which opened an office in Bansko last month.

Under the pending rules, British pensioners will, for the first time, be allowed to use money in a self-invested personal pension fund (SIPP) to buy residential property, including second homes and investment property in other countries. While there are many ramifications, the most striking feature of the changes is a tax break that could amount to 40 percent of the purchase price of a home, depending on the buyer's tax bracket.

In effect, a buyer using money in a SIPP fund could buy a 200,000, or $145,000, property with only 120,000. Also, properties generating revenue will be exempt from most U.K. taxes.

By making the changes, the Treasury Department hoped to encourage pension investments and to bring SIPPs in line with other pension funds, which allow real estate investments, according to a Treasury spokesman.

The new rules are set to go into effect April 6, commonly referred to as "A-day" in the pension industry.

"As soon as people begin to realize, it will be like pouring fuel on a fire," said Jeremy Rollason, a director at Savills International, the U.K.-based real estate firm. "People will be rushing to purchase residential property through these schemes."

While popular markets like the Costa del Sol and C