Bulgaria – Property Taxes

What taxes and fees apply when buying a property in Bulgaria?

Anyone purchasing real estate in Bulgaria should be prepared for obligations relating to the acquisition itself (property transfer tax), continued ownership (annual property and waste collection taxes), and any income generated from the property. The main costs crystallise at the point of purchase and are set out below.

Property transfer tax (acquisition tax): The principal compulsory payment is the real estate acquisition tax, which is levied by the municipality in which the property sits. Local authorities determine the applicable rate, which falls within a range of 0.1% to 3% of the transaction value. The calculation uses whichever is greater — the market price or the cadastral value. In practice, the rate tends to be around 2.5% in Sofia, approximately 2% in Varna and Plovdiv, and can reach 3% in popular resort locations such as Burgas or Nessebar. Conceptually this parallels stamp duty in the UK or land transfer taxes in Canada, though the Bulgarian rates are notably lower than those systems typically charge.

Notary fees: Fees for notarial services are governed by a state tariff schedule and scale according to the property’s value, becoming payable when the notarial deed is executed. The rate generally falls between 0.1% and 1.5% of the agreed purchase price. On a €100,000 property the fee is roughly €375–400; on properties above €200,000 it typically rises to around €600–700. Under law, notary fees are capped at approximately €3,000 in total. An additional 20% VAT is charged on top of the notary’s fee, and supplementary charges may apply for interpreter services where a foreign buyer is involved, preparation of the deed, and verification of ownership documents.

Land Registry (cadastre) registration fee: When the notarial deed is signed, a state fee of 0.1% of the purchase price is due for recording the change of ownership in the cadastre. This charge is mandatory and non-negotiable.

Legal fees: Instructing a conveyancing solicitor familiar with Bulgarian law typically costs 0.5% to 1% of the property price for standard transactions. Although there is no legal compulsion to engage a lawyer, doing so is strongly advisable for due diligence, document review, and confirming clean title.

Estate agent commission: Agent fees are ordinarily around 3% of the purchase price, though in some cases agents charge both buyer and seller. It is important to establish at the very start whether the advertised price includes the agent’s commission or is quoted exclusive of it.

VAT: Transfers of residential property are generally VAT-exempt, whereas commercial property transactions attract 20% VAT. New-build residential properties sold for the first time by a developer are also subject to 20% VAT.

BULSTAT registration: Foreign individuals and foreign legal entities that acquire Bulgarian real estate are required to register with the Registry Agency under the BULSTAT identification system within seven days of completing the acquisition.

Worked example: total transaction costs on a €100,000 apartment in Varna

Overall, buyers should budget for transaction costs in the region of 4% to 8% of the purchase price, potentially more if a corporate structure is required. Always verify current municipal rates with the relevant local authority before exchanging contracts. The official national tax body in Bulgaria is the National Revenue Agency (NRA).

What taxes and fees apply when selling a property in Bulgaria?

The tax obligations placed on sellers in Bulgaria are generally lighter than in many comparable European markets. There is no dedicated vendor stamp duty or seller-specific conveyancing tax, though sellers do bear certain costs and potential income tax exposure on any profit realised.

Capital gains / income tax: This represents the most material potential liability for a vendor. Gains arising from property disposals are taxed at a flat rate of 10% for Bulgarian tax residents, while non-residents face a 10% final withholding tax on the same basis. Full details, including the substantial exemptions available, are covered in the section below.

Administrative and notary costs: Beyond any income tax, standard administrative expenses — including notary and cadastre registration fees — are incurred on the disposal of real estate. The notary verifies ownership documentation, checks for outstanding debts and encumbrances, and formalises the transaction. It is common for the preliminary contract to specify how these administrative costs are allocated between parties, though by custom the greater share falls on the buyer.

Agent fees: Selling agents typically charge commission of between 2% and 3% of the sale price. Whether this cost is absorbed by the seller, the buyer, or divided between them depends on the terms negotiated with the agency.

Declaration obligation: Property disposals must be formally declared. Sellers with a taxable gain are required to report it in their annual personal income tax return submitted to the National Revenue Agency.

Deductible expenses: When computing the taxable gain, all documented costs associated with the transaction may be taken into account, including the original purchase price, notary fees, and other verifiable transaction expenses.

Is capital gains tax payable on property sales in Bulgaria?

Bulgaria does not maintain a standalone capital gains tax regime separate from income tax. Instead, profits from the sale of property are classified as personal income and charged accordingly — but the exemptions are extensive and a large proportion of sellers ultimately owe nothing at all.

The rate: Gains on property disposals in Bulgaria are subject to a flat 10% tax, applied to the net profit rather than the full sale proceeds. This places Bulgaria among the most competitive jurisdictions in Europe — for example, France can tax gains at up to 36.2% when social charges are included, and Germany taxes gains on non-primary residences sold within ten years at the owner’s marginal income tax rate.

How the gain is calculated: The taxable base is the positive difference between the disposal price and the acquisition price, with a further 10% statutory deduction applied to arrive at the chargeable amount. The acquisition price is ordinarily the price supported by the original purchase documentation. Special rules apply where documentary evidence of the acquisition cost is unavailable.

Primary residence and length-of-ownership exemptions: Bulgarian tax residents and residents of EU/EEA member states are not subject to tax on gains from the sale of one residential property per year, provided they have held it for more than three years. Additionally, gains on up to two further properties are exempt where each has been held for more than five years. Gains on property received through inheritance are also entirely exempt from tax.

Rules for non-residents: Non-resident individuals are taxed at 10% on the net gain — that is, the difference between sale and acquisition prices after a 10% cost deduction. EU/EEA non-residents are entitled to the same exemptions available to Bulgarian residents. For non-residents from outside the EU/EEA, the tax is withheld at source and remitted to the Bulgarian Treasury regardless of where the seller is based. Where a double taxation agreement exists between Bulgaria and the seller’s country of residence, tax paid in Bulgaria may be credited against any liability arising in that country when the annual return is filed there.

Practical example

A resident individual (or an EU/EEA-based non-resident) acquires an apartment for €80,000 and disposes of it four years later for €110,000. Since the property has been owned for more than three years and is the sole qualifying residential disposal in that tax year, the €30,000 gain is fully exempt. If the same person were also selling a second investment property that had been held for five or more years, that gain would likewise be exempt. Should the second property have been held for only two years, the calculation would be: (€30,000 − 10% statutory deduction) = €27,000 taxable gain, producing a tax bill of €2,700 at the 10% rate.

One important practical note: it is not unusual in Bulgaria for the lower assessed (cadastral) value of a property to be recorded on the title deeds rather than the actual transaction price, which can be substantially lower than the true market figure. This practice can inflate the apparent gain for worldwide tax purposes and result in a higher tax liability than necessary. Always ensure that the genuine purchase price is stated accurately on the notarial deed.

Are there annual property taxes in Bulgaria?

Every property owner in Bulgaria — irrespective of nationality or residency — is subject to an annual property tax. The obligation extends to both private individuals and corporate entities holding residential or commercial real estate in the country.

How the tax is calculated: The annual tax is computed on the basis of an estimated value assigned by the local municipality. For individuals, this is the so-called “tax assessment” figure, while for companies either the book value or the municipally assigned assessment is used. This valuation is almost always below the open market price — frequently by 50% to 70% — which keeps recurring tax bills strikingly low by European comparison.

The rate: Municipal councils set the annual property tax rate within a band of 0.1 to 4.5 per thousand (0.01% to 0.45%) of the assessed value. Rates differ across localities. In 2025, they fall within an average range of 0.1% to 0.45% of the assessed value depending on the municipality.

Primary residence relief: Where a property is registered as the owner’s principal home, a 50% reduction in the annual property tax rate applies automatically. This makes Bulgaria’s recurring tax burden on owner-occupied homes remarkably low compared with, for instance, the UK council tax system or annual property levies in Ireland and France.

Waste collection (rubbish) tax: Alongside the annual ownership tax, property holders also pay a refuse collection charge. This fee is settled once a year at the same time as the property tax and is calculated using the same assessed value as the base.

Payment schedule: Bulgarian law permits local taxes — including property tax, vehicle tax, and the refuse collection charge — to be settled in two instalments. The first is due by 30 June and the second by 31 October. Property owners who pay the full amount in a single payment by 30 April receive a 5% discount.

Administration: Local taxes in Bulgaria are managed by individual municipal authorities rather than by the National Revenue Agency. These include property tax, vehicle tax, acquisition tax, patent tax, tourist tax, and a range of local fees. Rates and procedures vary between municipalities, and payments are made directly to the relevant local authority.

Declaration after purchase: Following the acquisition of property in Bulgaria, the new owner must submit a declaration to the local tax office, accompanied by a copy of the notarial deed. This must be done within three months of the purchase date; late submission attracts a financial penalty.

To illustrate the scale involved: for a solid house of 90 sq m in a central zone of Burgas, the annual property tax is approximately 55 BGN and the waste collection charge around 60 BGN. At 2025 exchange rates, the combined annual liability in that example is comfortably below €60 — a vivid illustration of just how modest Bulgaria’s recurring property taxes are.

How is rental income from property taxed in Bulgaria?

Income derived from renting out Bulgarian property is subject to tax whether the landlord is a resident or a non-resident. The applicable rate is flat and comparatively low by European standards, though reporting requirements differ depending on where the landlord is based.

Resident landlords: Where the property is rented out by an individual, income tax is calculated under the Law on the Income of Physical Persons. A statutory allowance of 20% is deducted from gross rental receipts before tax is applied, meaning that tax is levied on 80% of the income received. With a 10% tax rate applied to that reduced figure, the effective rate on gross rental income works out at 8%. Resident landlords report rental income through their annual personal income tax return filed with the National Revenue Agency.

Non-resident landlords: For landlords based outside Bulgaria, tax on rental income is withheld at source at 10% of the gross amount. This must be remitted monthly unless a double tax treaty between Bulgaria and the non-resident’s country of residence provides for quarterly remittance instead. Unlike resident landlords, non-residents are not permitted to claim any expense deduction — the 10% is applied to the full gross rental figure. Non-residents should establish whether a double tax agreement applies to prevent being taxed on the same income in two countries.

Corporate ownership: Properties owned through a company are subject to corporate tax at 10% on net rental profits. For investors intending to hold more than two properties and build a formal property investment operation in Bulgaria, a corporate structure often produces a more efficient tax outcome.

Short-term and holiday lets (Airbnb-style): Property owners who wish to let on a short-term basis to tourists are required by law to undergo a categorisation procedure, after which the municipality determines the applicable tax treatment. Short-term lettings via platforms such as Airbnb may also trigger a VAT registration obligation once rental turnover exceeds the relevant registration threshold — the current level of which should be confirmed with the NRA. Bulgaria does not operate a separate platform-specific reporting framework, but income from short-term lets must be declared and taxed in the same manner as other rental income.

Registration with the NRA: All landlords — resident or otherwise — are required to ensure that their rental activities are properly declared. Failing to report rental income can result in penalties. Current rates and filing deadlines can be verified at nra.bg.

Does inheritance tax apply to property in Bulgaria?

Bulgaria does levy inheritance tax, but it is collected at the municipal level and the rates are low. Critically, immediate family members are entirely exempt — making Bulgaria far more generous in this respect than countries such as the UK, where inheritance tax can reach 40% above the threshold, or France, where rates for non-direct heirs can surpass 55%.

Who is liable: Bulgarian residents are subject to inheritance tax on property situated both within Bulgaria and abroad. Non-residents of Bulgaria are liable only on property located within the country. In both cases it is the beneficiary — the heir — who bears the tax liability.

The key exemption: Inheritances received by a surviving spouse or direct relatives are completely exempt from inheritance tax. This means that property transferred from parent to child, between spouses, or to grandchildren attracts no Bulgarian inheritance tax whatsoever.

Rates for other heirs: Rates are competitive by European standards, ranging from 0.4% to 6.6%, with full exemptions for spouses and direct relatives. Siblings and other close relatives (second-line heirs) typically face rates in the 0.4%–0.8% range, while more distant relatives and unconnected heirs are charged between 3.3% and 6.6%, depending on the municipality. Current banding should always be confirmed with the relevant municipal tax office.

Declaration requirement: Upon discovering an inheritance, the beneficiaries or their legal representatives must submit a declaration to the municipality of the last residence of the deceased within six months. Where the deceased was resident abroad, the declaration is filed at the location of the majority of their Bulgarian property.

Double tax treaties: Bulgaria has concluded 69 Double Tax Treaties with jurisdictions including Austria, Belgium, Canada, China, France, Germany, the Netherlands, Spain, the UK, and the USA, among others. Where a treaty covers inheritance taxes, it may reduce or eliminate liability in one of the two countries involved. However, not all of Bulgaria’s treaties extend to inheritance tax, so specialist cross-border advice is strongly recommended for international estates.

Gains from inherited property: It is worth noting that capital gains realised on the subsequent sale of property received by inheritance are not subject to tax in Bulgaria. This represents a meaningful advantage for heirs who later decide to sell.

Does gift tax apply to property transfers in Bulgaria?

Gifts of Bulgarian property during a person’s lifetime are taxable, but — consistent with the inheritance tax framework — the rates are modest and transfers within the immediate family benefit from significant relief.

General structure: Donation (gift) tax is a municipal tax, collected locally rather than by the National Revenue Agency. The rate depends on the relationship between the person making the gift and the person receiving it.

Rates and exemptions: Where property is donated by first-line relatives — typically parents, children, and spouses — donation tax is charged at 1%. In all other circumstances the applicable rate is 4%. For siblings, cousins, and unrelated recipients the 4% rate applies in full. Individual municipalities may apply rates that differ slightly within the legally permitted range, so the specific rate should be verified with the local municipal tax office ahead of any transfer.

Key practical point: Gift tax rates across Bulgaria range from 0.4% to 6.6% on a broader basis, with full exemptions available for spouses and direct relatives in certain circumstances. The precise treatment of gifts between spouses can vary and should be confirmed locally, as some municipal authorities regard spousal gifts as fully exempt while others apply the 1% rate.

Gift tax is calculated on the assessed (cadastral) value of the property rather than necessarily on the market value, which can further reduce the effective tax burden. Any gift of real estate must be formalised by notarial deed, which will attract the standard notary fees described in the buying section above. Current rates and any applicable exemptions should always be confirmed with the relevant municipality or a qualified Bulgarian tax adviser before proceeding.

Are there any tax advantages or incentives for buying property in Bulgaria?

Bulgaria’s property tax framework is itself a compelling advantage — low flat rates, broad CGT exemptions, and very limited ongoing tax obligations. In addition, several targeted reliefs are worth understanding.

Primary residence property tax reduction: Any property declared as an individual’s main residence qualifies for a 50% reduction in the annual property tax rate. This relief is available to all owners regardless of nationality, provided the property is formally registered as their primary home.

Early payment discount: Property owners who settle their full annual property tax and waste collection fee by 30 April each year receive an automatic 5% discount — a straightforward and effortless saving.

Renovation and repair deductions: Both Bulgarian residents and EU/EEA nationals can deduct from taxable income payments made for improvements or repairs to a residential property up to BGN 2,000, subject to applicable conditions. At 2025 exchange rates, BGN 2,000 equates to approximately €1,000. This deduction is claimed through the annual personal income tax return.

Mortgage interest relief: Owner-occupiers may be eligible to deduct mortgage interest payments under certain conditions — eligibility criteria should be verified directly with the NRA. Expatriates and higher-net-worth purchasers should also assess their position regarding other available deductions such as charitable contributions and insurance payments.

Residency by investment: Investors purchasing Bulgarian real estate worth at least €300,000 may apply for a residence permit under the relevant programme. While this is not a tax incentive in its own right, it creates a pathway to Bulgarian residency — and potentially to the benefits of Bulgaria’s favourable flat-tax personal income tax system for those making a substantial property commitment.

Corporate ownership for multiple properties: Where property is held through a Bulgarian company, corporate tax at 10% applies to net profits. Investors intending to acquire more than two properties and run a structured investment business will generally find corporate ownership more tax-effective. Bulgaria’s 10% corporate tax rate is among the lowest in the EU, and a Bulgarian company can set documented operating costs against taxable profit.

CGT exemptions as an incentive: The length-of-ownership exemptions from capital gains tax described earlier are among the most generous available anywhere in Europe. Holding a residential property for just over three years to qualify for the primary residence exemption requires minimal advance planning and can eliminate what might otherwise be a sizeable tax bill at the point of sale.

Do different rules apply to foreign buyers or non-residents purchasing property in Bulgaria?

Bulgaria applies broadly equal tax treatment to foreign purchasers, with acquisition tax rates being the same regardless of nationality. Nevertheless, there are meaningful structural restrictions and additional administrative obligations that apply specifically to non-citizens and non-residents.

Land ownership restriction for non-EU nationals: Citizens of EU member states may purchase real estate freely, including land. Nationals of countries outside the EU may only acquire buildings and apartments — they are not permitted to purchase land in their own name. To acquire land, non-EU nationals must establish a legal entity registered in Bulgaria. This requirement adds to the overall cost and complexity for non-EU buyers wanting a house with grounds.

EU and EEA nationals: Citizens of EU and EEA countries enjoy precisely the same property rights as Bulgarian citizens, including the ability to purchase any type of real estate including land and houses with attached land. These rights have been in place since Bulgaria acceded to the EU in 2007.

BULSTAT registration: Foreign individuals and foreign legal entities acquiring Bulgarian real estate are obliged to register with the Registry Agency under the BULSTAT system and obtain an identification number within seven days of completing the acquisition. This is an administrative requirement rather than a tax, but non-compliance can attract penalties.

Tax treatment at sale (non-residents): Non-residents of Bulgaria who dispose of property situated in the country are also liable to capital gains tax at 10%. The tax is withheld at source and transferred to the Bulgarian Treasury regardless of where the seller is resident. Non-residents based in EU/EEA countries benefit from the same CGT exemptions as Bulgarian residents; those based outside the EU/EEA may not be entitled to the same reliefs.

Rental income for non-residents: Non-residents are taxable on income derived from Bulgarian sources. Joint taxation is not available, and spouses are assessed separately. Income received by non-residents is taxed at a flat 10% rate, and unlike resident landlords, non-residents are not permitted to claim an expense deduction against gross receipts.

Double taxation treaties: Bulgaria has 69 DTTs in force covering a wide range of countries. These agreements may reduce withholding taxes on rental income and provide mechanisms to avoid double taxation on capital gains. Whether your country of residence has a treaty with Bulgaria can be checked at the National Revenue Agency website.

No surcharge for foreign buyers: In contrast to certain markets that impose additional duties on non-citizen or non-resident purchasers, Bulgaria applies no such surcharge. The transfer tax rates are identical for all buyers irrespective of nationality or residency status — the taxes levied by the state at the point of purchase are the same for Bulgarian and foreign citizens alike.

Frequently asked questions

Do I need to pay tax in Bulgaria if I only own a holiday apartment there?

Yes. Every property owner in Bulgaria, regardless of nationality or residency, is required to pay the annual property tax and the associated waste collection fee. The sums involved are typically very modest — often under €100 per year for a small apartment. You must also register the property with the local municipal tax office within three months of the purchase date.

Is it true that Bulgarian property taxes are among the lowest in the EU?

Property ownership tax in Bulgaria is widely regarded as among the lowest in the European Union. The annual charge is calculated on a cadastral value that is typically well below the prevailing market price, and the rates themselves — capped at 0.45% — are low by any European benchmark. Always verify the applicable rate with your local municipal authority.

If I sell my Bulgarian apartment after owning it for four years, will I pay capital gains tax?

Capital gains on the disposal of one residential property per year are exempt provided the seller has held it for more than three years. If you sell a single residential property after four years of ownership, no Bulgarian capital gains tax applies — as long as it is the only property you are disposing of in that tax year. Always confirm your precise position with a local tax adviser, since the outcome depends on the number of properties being sold and your residency status.

Can I deduct mortgage interest or running costs against my rental income?

Resident individual landlords benefit from a fixed statutory deduction of 20% from gross rental receipts, meaning the 10% income tax rate is applied to only 80% of what is received. This is a blanket allowance rather than a system permitting itemised actual expenses. Non-resident landlords are not entitled to any deduction and pay 10% on the full gross rental amount. Consult the National Revenue Agency or a qualified tax adviser for guidance specific to your circumstances.

Will my children inherit my Bulgarian property tax-free?

Inheritances received by a surviving spouse or direct relatives are fully exempt from Bulgarian inheritance tax. Property passing to your children, or between spouses, carries no inheritance tax liability. A declaration must still be submitted to the relevant municipality within six months of the death. If you are not a Bulgarian resident, the laws of your country of residence may also have implications for your worldwide estate.

As a non-EU national, can I buy a house with a garden in Bulgaria?

Nationals of countries outside the EU cannot purchase land as individuals in Bulgaria — only buildings and apartments may be acquired in their own name. To buy land, a company registered in Bulgaria must be used. EU and EEA citizens face no such restriction. Legal advice should be obtained before proceeding with any purchase that includes land.

Does Bulgaria have any wealth tax on property?

Bulgaria does not impose any form of net wealth or net worth tax. The annual property tax is the closest equivalent, but it is a modest charge based on assessed value and bears no resemblance to a wealth-based levy. There is no mansion tax, luxury property surcharge, or additional second-home tax at the national level, though some resort municipalities may apply higher acquisition tax rates.

Where can I find official information about Bulgarian property taxes?

The main official sources are the National Revenue Agency (NRA) for income and capital gains tax, the Ministry of Finance for property tax legislation, your local municipal tax office for annual property and transfer tax rates and payment deadlines, and the Registry Agency for cadastre and BULSTAT registration matters. Rates and rules are subject to annual change, so always confirm current figures before completing any transaction.