Property Tax
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In Bulgaria, the property tax is imposed annually on the owners of real estate in the country. The tax is based on the value of the property and is collected by the local municipality. The rate of property tax in Bulgaria varies depending on the municipality, but typically ranges from 0.1% to 0.3% of the property value. For example, if the value of a property is €100,000, the annual property tax would be €100 to €300.
Capital Gains Tax (CGT)
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CGT is levied on the sale of real estate in Bulgaria and is calculated as a percentage of the sale price. The CGT rate in Bulgaria is 5% for individuals and 10% for companies. For example, if an individual sells a property for €100,000, they would be required to pay €5,000 in CGT.
Inheritance Tax
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Inheritance tax is levied in Bulgaria on the transfer of property from a deceased person to their heirs. The tax rate depends on the relationship between the deceased and the heir and ranges from 0% to 10%. For example, if a parent leaves a property worth €100,000 to their child, the inheritance tax would be 0% and no tax would be owed.
Gift Tax
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In Bulgaria, gift tax is imposed on the transfer of property as a gift from one person to another. The tax rate is 5% and is calculated based on the value of the property being gifted. For example, if an individual gifts a property worth €100,000 to another person, the gift tax would be €5,000.
Tax on Property Income
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In Bulgaria, rental income from properties is subject to tax. The tax rate is 10% and is levied on the net rental income. For example, if the rental income from a property is €1,000 per month, the monthly tax would be €100.
Tax Advantages in Buying a House in Bulgaria:Reduced Property Tax: Property tax in Bulgaria can be reduced by up to 50% for properties that are used as the owner’s primary residence.
Low CGT: The CGT rate in Bulgaria is relatively low compared to other countries, making it an attractive destination for real estate investment.
Tax Deduction for Mortgage Interest: Interest paid on a mortgage for a property in Bulgaria is tax-deductible, providing a tax advantage for property owners.
Tax-Free Inheritance: Inheritance tax in Bulgaria is 0% for close family members, making it a tax-friendly destination for estate planning.
Reduced Property Tax: Property tax in Bulgaria can be reduced by up to 50% for properties that are used as the owner’s primary residence.
Low CGT: The CGT rate in Bulgaria is relatively low compared to other countries, making it an attractive destination for real estate investment.
Tax Deduction for Mortgage Interest: Interest paid on a mortgage for a property in Bulgaria is tax-deductible, providing a tax advantage for property owners.
Tax-Free Inheritance: Inheritance tax in Bulgaria is 0% for close family members, making it a tax-friendly destination for estate planning.
In conclusion, buying a house in Bulgaria can provide significant tax advantages for property owners, including reduced property tax, low CGT, tax-deductible mortgage interest, and tax-free inheritance for close family members.