Property Taxes in Bulgaria 2025

In Bulgaria, all property owners, regardless of citizenship and residency status, are required to pay an annual property tax. The tax applies to both individuals and legal entities that own residential or commercial property in the country. In addition to the annual tax, a transfer of ownership tax is payable when purchasing real estate, and additional tax liabilities may arise when renting or selling a property, including income tax and capital gains tax.

The basis for calculating the annual tax is the estimated value of the property, as determined by the local municipality. For individuals, the so-called “tax assessment” is used, and for companies, either the book value or the assessment set by the municipality. Tax rates are set by local authorities and may vary from region to region. In 2025, the average rate ranges from 0.1% to 0.45% of the assessed value. In large cities such as Sofia, the rate is around 0.32%, in Burgas around 0.25%, and in Varna around 0.15%. The tax is paid annually, regardless of whether the property is used or not. There are usually two payment options: a one-off payment by the end of March or four equal instalments by the end of March, June, September and December. Municipalities offer a 5% discount for full payment by 31 March. There is a concession for an individual’s main residence – the rate can be reduced to 50% of the standard rate. Buildings owned by the state or municipality are exempt from tax if they are not used for commercial purposes, as are religious, educational and certain other social facilities.

When purchasing real estate, a municipal tax on the transfer of ownership is payable. Its rate depends on the region and varies from 0.1% to 3% of the appraised or contractual value (whichever is higher). Additional costs include notary fees, registration fees and technical registration services. In a number of municipalities, there is a trend towards increasing the rates of this tax in 2025. Income from property rental is subject to income tax at a rate of 10%. If the property is rented through a legal entity, the same tax principles apply. When selling a property, capital gains are taxed at a rate of 10% – the difference between the sale price and the documented purchase price, taking into account allowable expenses. The law provides for tax exemption on the sale of one residential property that has been owned for more than three years, or no more than two properties that have been owned for more than five years. It should be noted that the annual property tax is paid together with the municipal waste collection fee, which is calculated separately but collected as part of a single payment document. The total amount of these payments depends on the specific municipality and property category. In most cases, the tax base is significantly lower than the market value, which reduces the actual tax burden.

For foreign investors, Bulgaria remains one of the most affordable countries in Europe in terms of property taxation. Tax rates are moderate, the rules are transparent, and long-term ownership benefits make the market attractive to both individuals and companies investing in residential and commercial properties.

Lawyers from Regulated United Europe assist foreign investors in Bulgaria in assessing tax liabilities, preparing calculations for specific properties and optimising the structure of property ownership through legal entities, which significantly reduces the total costs of maintenance and subsequent sale of assets.

 Taxes when buying property in Bulgaria

When purchasing real estate in Bulgaria, the buyer is required to pay a number of taxes and fees related to the transfer of ownership. The main mandatory payment is the real estate acquisition tax, which is levied in favour of the municipality where the property is located. The amount of the tax is determined by the local authorities and ranges from 0.1% to 3% of the transaction value. Either the market value or the cadastral value is used for the calculation, depending on which is higher. In most cases, the tax is around 2.5% in Sofia, around 2% in Varna and Plovdiv, and can reach 3% in resort areas such as Burgas or Nessebar. This tax is paid when the transaction is registered with a notary. The buyer pays the amount to the municipal budget before signing the notarial deed, after which the notary provides confirmation of payment, which is necessary for registering ownership in the cadastre.

In addition to the purchase tax, the buyer pays notary fees, which are calculated based on the value of the property and are regulated by state tariffs. On average, notary services cost between 0.1% and 1.5% of the property price. In addition, a registration fee is paid to the land cadastre, which is usually 0.1% of the transaction value. Thus, the total costs of purchasing real estate in Bulgaria (including acquisition tax, notary and registration fees) average between 2.5% and 5% of the total value of the property. If the transaction is conducted through a legal entity, there may be additional costs for preparing corporate documents, legal verification and paying for the services of a representative when signing the contract. In some cases, the parties may agree on the distribution of costs between the buyer and the seller, but as a general rule, it is the buyer who bears the bulk of the tax liabilities.

When purchasing property on the primary market – from a developer – value added tax (VAT) at a rate of 20% may apply. However, in most cases, VAT is already included in the price specified in the purchase agreement. When purchasing secondary real estate, VAT is not levied, as the tax is considered to have already been paid at the time of the first sale of the property. It should also be noted that when paying tax and registering the transaction, foreign buyers are required to provide a translation of all documents into Bulgarian, performed by a sworn translator. In addition, after registering the property, the new owner must notify the municipality of the purchase within two months so that the annual property tax and waste collection fee can be calculated correctly in the future. Overall, the tax burden when buying property in Bulgaria remains moderate compared to most European Union countries. A transparent calculation system, fixed municipal tax rates and no hidden mandatory payments make the property purchase process predictable and safe for foreign investors.

Cost of legal services when purchasing real estate in Bulgaria

The cost of legal services when purchasing real estate in Bulgaria depends on the complexity of the transaction, the type of property and the scope of support provided. On average, a basic package of services, including property inspection, analysis of title documents, preparation of a preliminary contract and the participation of a lawyer in the signing of the notarial deed, starts at €400. More comprehensive support, including full interaction with the notary, preparation of all documents, verification of encumbrances and registration of ownership in the cadastre, costs between €600 and €700. In cases where the transaction involves additional aspects, such as purchasing through a company, drawing up a power of attorney, involving an interpreter or preparing documents for a foreign bank, the cost may increase to €1,000 or more.

Some law firms offer fixed rates for individual services: consultation on real estate purchase issues is usually estimated at €60 to €150, preparation of a preliminary contract is around €150 to €250, and full turnkey transaction support varies from €500 to €700. However, the cost of notary and registration fees, document translation, apostille and real estate agent services is not usually included in the legal fee and is paid separately. Legal support for a transaction in Bulgaria includes several key stages: verification of the legal status of the property, analysis of the ownership history, verification of the existence of debts and mortgages, preparation and agreement of a preliminary purchase agreement, drafting of the main agreement for notarisation, representation of the client’s interests before a notary and subsequent registration of ownership. If necessary, the lawyer also provides translation of documents into Bulgarian, draws up powers of attorney and supervises the entry of the property in the cadastre.

Legal support is particularly important for foreign buyers, as it helps to avoid risks associated with unscrupulous sellers, lack of building permits or unregistered changes to the layout. An experienced solicitor checks that the transaction complies with Bulgarian law, protects the client’s interests during settlements and ensures the legal purity of the property until registration is complete. Overall, the cost of legal services when buying property in Bulgaria remains moderate compared to other European Union countries, and their availability guarantees the security of the transaction and minimises potential risks.

 Cost of notary services when purchasing real estate in Bulgaria

The cost of notary services when purchasing real estate in Bulgaria is set in accordance with state tariffs and depends on the cost of the property. Payment to the notary is made upon signing the notarial deed, which confirms the transfer of ownership. The average cost of services ranges from 0.1% to 1.5% of the contractual price of the property. To understand the structure of expenses, you can refer to the following ranges: for properties worth €100,000, the fee is approximately €375–400, and for properties worth more than €200,000, it is approximately €600–700. The maximum amount of notary fees under the law does not exceed approximately €3,000.

It should be noted that value added tax (VAT) of 20% is added to the notary’s fee. In addition, the notary may charge an additional fee for the services of an interpreter (in the case of a foreign buyer), for the preparation of the notarial deed, verification of title documents and the production of certified copies. The notary’s fees are paid before the signing of the purchase agreement, and the notary is responsible for the correct execution and transfer of documents for registration of the transaction with the cadastral authorities. Without notarisation, the transfer of ownership of real estate in Bulgaria is considered invalid, so the participation of a notary is a mandatory element of any transaction.

Thus, the cost of notary services when buying property in Bulgaria usually ranges from €200 to €700, depending on the value of the property and the complexity of the transaction. Notarial support is especially important for foreigners, as the notary not only certifies the transaction but also monitors the correctness of all legal procedures, ensuring the legality of the transfer of ownership.

The cost of real estate agent services when purchasing property in Bulgaria

The cost of real estate agent services when buying property in Bulgaria is usually between 2.5% and 3% of the transaction price. In some cases, especially when assisting a foreign buyer or when purchasing properties of increased complexity, the commission can reach 4-5%. When purchasing inexpensive properties, agencies sometimes set a minimum fixed fee, which is usually around €700-800. The real estate agent’s commission is paid at the time of the transaction, after signing the preliminary contract or notarial deed. In most cases, the buyer bears the cost of the services, but sometimes the parties agree to split the commission equally between the buyer and the seller.

The standard list of services provided by a real estate agency includes selecting suitable properties, organising viewings, negotiating with the seller, checking the market price, preparing and agreeing on a preliminary purchase agreement, and accompanying the client until the transaction is notarised. Some agencies also offer additional services: checking the legal status of the property, obtaining certificates from the cadastre and tax authorities, translating documents, assisting in opening a bank account and arranging property insurance. These additional services may be included in the overall package or paid for separately, depending on the terms of the agency agreement.

Before starting to work with a real estate agent, it is recommended to conclude a written agreement specifying the commission amount, the scope of services provided, the payment procedure and the term of the agreement. This is especially important for foreign buyers in order to avoid misunderstandings and double commissions. When choosing an agency, you should pay attention to its licence, experience in working with foreign clients and reputation. In general, real estate agent services in Bulgaria remain relatively inexpensive compared to other European Union countries, and their involvement helps to significantly reduce the risks when buying property, especially when the transaction is completed remotely.

Taxes on property ownership in Bulgaria

Ownership of real estate in Bulgaria is subject to annual local taxes and fees, which are regulated by municipal authorities. The main mandatory payment is property tax, which is levied on owners of residential, commercial and land properties. Both Bulgarian citizens and foreigners are required to pay this tax, regardless of whether the property is used or not. The amount of tax is determined based on the cadastral (appraised) value of the property as established by the local municipality. This valuation is usually lower than the market price, typically around 50-70% of it, which makes the actual tax burden relatively moderate. Tax rates are set by local authorities and range from 0.1% to 0.45% of the estimated value of the property. For example, in Sofia, the average rate is around 0.32%, in Burgas around 0.25%, and in Varna around 0.15%.

The tax is paid annually, regardless of whether the owner lives in Bulgaria or rents out the property. The tax can be paid in a single instalment by the end of March of the current year or in four equal instalments throughout the year – by the end of March, June, September and December. A 5% discount is available if the entire amount of tax is paid by 31 March. There are concessions for the owner’s main residence: if the property is registered as the main place of residence, the tax rate can be reduced by 50%. Tax exemption also applies to certain categories of property owned by government agencies, religious organisations, schools and charitable foundations, provided that the properties are not used for commercial activities.

In addition to property tax, owners are required to pay an annual municipal waste collection fee. The amount is determined by local authorities and calculated based on the size of the property or the number of residents. This fee is charged at the same time as property tax, and both payments are indicated on a single bill. Foreign property owners must notify the municipality of the purchase of a property within two months of signing the notarial deed so that the tax authorities can calculate the annual liabilities. Late registration may result in fines and penalties.

Overall, the tax burden on property ownership in Bulgaria remains one of the lowest in the European Union. A simple calculation system, no hidden fees and moderate rates make property ownership attractive to foreign investors, especially in the long term.

Taxes on short-term property rentals in Bulgaria

Short-term property rentals in Bulgaria, i.e. for less than six months, are considered a business activity and are subject to taxation in accordance with the country’s legislation. Owners, whether individuals or companies, are required to declare rental income and pay the corresponding taxes. If the property is rented out by an individual who is not registered as an entrepreneur, the rental income is subject to income tax at a rate of 10%. In this case, a deduction of 10% of the income received is allowed without documentary evidence. Thus, the tax base is 90% of the actual income. For example, if the owner received €5,000 for the year, the taxable amount would be €4,500 and the tax payable would be €450.

If the owner rents out the property regularly and for profit, they are required to register with the tax authorities as a sole trader or set up a legal entity. In this case, the income is subject to corporate tax at a rate of 10% and is also subject to VAT if the annual turnover exceeds 100,000 levs (approximately £51,000). When registering for VAT, the landlord is required to charge value added tax at a rate of 20% on the services provided.

The same tax rules apply to owners who rent out their properties through online platforms (such as Booking.com or Airbnb). The Bulgarian tax authorities have the right to request information about income received through such platforms and to monitor its declaration. Failure to pay tax may result in fines and penalties. In addition to income tax, owners are required to pay an annual property tax and municipal waste collection fee, even if the property is used exclusively for rental purposes. These payments are levied at the location of the property and do not depend on the number of rental days per year.

If the property is rented out on a short-term basis as tourist accommodation, it must be registered with the municipality and a permit for tourist activities must be obtained. In some regions, it is also necessary to register the property with the Bulgarian Ministry of Tourism. Failure to do so may result in fines and a ban on renting out the property. Taxation of short-term rentals in Bulgaria is transparent and flexible: the income tax rate is 10%, which makes renting profitable even with low occupancy rates. At the same time, with proper registration and compliance with tax requirements, the owner can use a number of legal ways to optimise the tax base.

 Taxes on long-term property rentals in Bulgaria

Long-term rental of real estate in Bulgaria, i.e. for a period of more than six months, is regulated by tax legislation and requires income to be declared. Unlike short-term rentals, which are considered a business activity, long-term rentals are more often viewed as private income from property ownership and do not require mandatory registration as a sole trader. Income received by an individual from long-term property rental is subject to income tax at a fixed rate of 10%. At the same time, the Bulgarian tax system provides for the possibility of applying a standard deduction of 10% of the amount of income received without the need to submit supporting documents. Thus, 90% of the actual income is subject to taxation. For example, with an annual rental income of €10,000, the tax base will be €9,000 and the amount of tax payable will be €900.

The tax is calculated on the basis of the tax return, which must be submitted to the tax authorities by the end of April of the year following the reporting year. Payment is made either in a lump sum or in two instalments, depending on the amount and the chosen payment method. The taxation rules are identical for Bulgarian residents and non-residents who own property in the country.

If the property owner enters into long-term lease agreements on a systematic basis or manages several properties, the tax authorities may recognise such activity as entrepreneurial. In this case, registration as a natural person – entrepreneur or the creation of a legal entity will be required, with the payment of corporate tax at a rate of 10%. If the annual income exceeds BGN 100,000 (approximately €51,000), there is also an obligation to register as a VAT payer, although this rule does not apply to most private landlords.

It is important to note that, in addition to income tax, the property owner continues to pay annual property tax and a waste collection fee, regardless of whether the property is rented out or not. These taxes are mandatory and are levied by the municipality where the property is located. In Bulgaria, landlords have the right to conclude a written lease agreement, which can be notarised for greater legal protection. This is particularly relevant for long-term leases, as notarisation ensures that the agreement can be quickly registered and protects the interests of the parties in the event of a dispute.

Bulgaria’s tax system makes long-term rentals a financially advantageous form of investment: the tax rate is low, and reporting is simple and transparent. With properly drafted contracts and timely income declarations, foreign investors can earn a stable income from renting out property without facing an excessive tax burden.

Taxes on the sale of real estate in Bulgaria

When selling real estate in Bulgaria, the owner is obliged to take into account the tax obligations associated with receiving income from the transaction. Taxation depends on the status of the owner (natural or legal person), the term of ownership of the property and the nature of its use. Individuals who own real estate are subject to capital gains tax at a rate of 10%. The tax is calculated on the difference between the sale price and the documented purchase price, increased by the amount of expenses related to the acquisition and improvement of the property (e.g., repairs, notary fees, purchase taxes). For example, if the property was purchased for €100,000 and sold for €130,000, and the documented expenses amounted to €5,000, the tax base would be €25,000 and the tax payable would be €2,500.

Bulgarian law provides for a number of exemptions from tax on income from the sale of real estate. Owners are exempt from taxation in two cases: if one residential property that has been owned for more than three years is sold, or if no more than two properties that have been owned for more than five years are sold. These exemptions apply only to individuals and provided that the sale is not systematic. If the property belongs to a legal entity, the income from its sale is subject to corporate tax at a rate of 10% on the total amount of profit. In this case, legal entities are required to maintain accounting records and provide financial statements in accordance with the requirements of Bulgarian law. For companies that have owned real estate for a long time, income tax may be reduced by deducting depreciation or accounting for expenses incurred.

Non-residents of Bulgaria who sell real estate in the country are also required to pay capital gains tax at a rate of 10%. The tax is withheld and transferred to the Bulgarian budget, regardless of the seller’s country of residence. If there is a double taxation agreement between Bulgaria and the owner’s country of residence, the amount of tax paid in Bulgaria may be credited in the country of residence when filing the annual tax return. In addition to income tax, standard administrative costs, including notary and registration fees, are also payable on the sale of real estate. The notary checks the documents certifying ownership, the absence of debts and encumbrances, and certifies the transaction. All expenses related to the sale can be taken into account when calculating taxable income.

The sale of real estate is subject to mandatory declaration. The seller is required to file a tax return by the end of April of the year following the year of the transaction. The tax authorities have the right to request documents confirming the costs of acquisition and improvement of the property, and in the absence of such confirmation, the tax is calculated based on the full difference between the purchase and sale price. Overall, Bulgaria’s tax system makes the sale of real estate quite transparent: a flat rate of 10% and clear exemption criteria allow owners to plan transactions with minimal risk. Ownership of real estate for more than three or five years effectively exempts most individuals from paying capital gains tax.

 Taxes on the sale of real estate by individuals in Bulgaria

The sale of real estate by an individual in Bulgaria is subject to capital gains tax. This tax applies to the difference between the price at which the property was sold and the price at which it was purchased, adjusted for documented expenses incurred in the purchase and ownership of the property. The tax rate is uniform and amounts to 10%. The tax base is determined as the positive difference between the sale price and the purchase price, increased by the amount of expenses for notary fees, purchase taxes, real estate agent fees, repairs or capital improvements, if these expenses are confirmed by relevant documents. For example, if an individual purchased a property for €120,000, invested €10,000 in repairs and sold the property for €150,000, the profit of €20,000 would be taxed and the tax amount would be €2,000.

Bulgarian law provides tax breaks for individuals who have owned property for a long time. Exemption from income tax on the sale applies in two cases: if one residential property that has been owned for more than three years is sold, or if no more than two properties that have been owned for more than five years are sold. In these situations, income tax is not levied, provided that the sale is not of a regular commercial nature. If an individual owns several properties and carries out frequent purchase and sale transactions, the tax authorities may classify their activities as entrepreneurial, in which case taxation will be carried out according to the rules applicable to individual entrepreneurs. In this case, the income from the sale is also taxed at a rate of 10%, but with the obligation to keep records and submit reports in a different manner.

For non-residents of Bulgaria, the tax rules are identical: income from the sale of real estate located in the country is taxed at a rate of 10%. After the transaction is completed, the seller is required to file a tax return with the National Revenue Agency (NRA) by the end of April of the year following the year of sale. The tax is payable within the same time frame. If there is a double taxation agreement between Bulgaria and the seller’s country of residence, the tax paid in Bulgaria may be credited in the country of tax residence. When selling real estate, standard notary and registration fees are also payable, which in most cases are borne by the buyer, but the parties may agree on a different distribution of costs. All expenses incurred by the seller in connection with the transaction, including legal support, preparation of documents and payment for the services of an appraiser, may be taken into account when determining taxable income.

Taxation of individuals when selling real estate in Bulgaria is considered one of the simplest and most advantageous in the European Union. A flat rate of 10%, no complex deductions and clear exemption criteria make the system transparent and convenient for foreign investors.

 Taxes on the sale of real estate by a company in Bulgaria

When selling real estate owned by a company, tax obligations in Bulgaria are governed by corporate tax legislation. All income from the sale of property by a legal entity is considered part of the company’s profits and is subject to taxation at a rate of 10%. This tax is a single corporate tax that applies to the total profits of the organisation, including both operating income and profits from the sale of assets such as buildings, land or commercial property. When determining the tax base, expenses related to the acquisition of real estate, as well as depreciation accrued during the period of ownership, are deducted from the sale amount. If the property was recorded as a fixed asset, its residual book value is deducted from the sale price, and tax is calculated only on the positive difference. For example, if a company purchased a property for €200,000, accrued depreciation of €50,000 over several years, and then sold the property for €230,000, the taxable profit would be €80,000 and the tax payable would be €8,000.

If the transaction is carried out by a Bulgarian resident company, the tax is paid as part of the general corporate tax, which is calculated at the end of the financial year. Companies are required to file an annual income tax return by 31 March of the year following the reporting year. Non-resident companies that do not have a permanent establishment in Bulgaria are also subject to taxation at a rate of 10% on income received from the sale of Bulgarian real estate. In this case, the tax is withheld in Bulgaria, even if the calculations are made abroad. If the sale takes place within a short period after the acquisition of the property, the tax authorities may classify the transaction as a speculative operation, and the same rules apply, but with a more thorough check of the sources of income and the economic justification for the transaction. Companies engaged in the systematic purchase and sale of real estate are required to be registered as VAT payers if their annual turnover exceeds BGN 100,000 (approximately €51,000). In this case, the sale of real estate may be subject to VAT at a rate of 20% if the property falls into the category of new buildings or land for development.

For companies that have owned real estate for more than two years, there is the possibility of VAT exemption on the sale if the property falls into the secondary market category. However, this exemption does not cancel the payment of corporate income tax. Additional expenses, such as notary services, registration fees, legal support and property valuation, can be included in the company’s costs and reduce the tax base. All expenses must be documented and reflected in the accounting records. The sale of real estate by a legal entity in Bulgaria is a transparent and financially predictable procedure. The fixed corporate tax rate of 10% makes the Bulgarian system one of the most advantageous in the European Union for real estate transactions.