Property taxes in Bulgaria

Real estate purchase and sale tax

In Bulgaria, taxes on the purchase and sale of real estate are the same for both Bulgarian citizens and foreigners. All transaction costs are paid by the buyer, and the seller only prepares the documents. The future owner usually pays 3% of the transaction value to the local municipality. The maximum tax on the purchase of real estate in Bulgaria is 3.3% - the rate depends on the location, for example, in the Burgas region everyone pays 3% of the value of the property or the amount of the tax assessment, whichever is higher. If the transaction amount is 15,000 euros, and the tax assessment is 16,000 euros, then the purchase tax will be calculated according to the second option and amount to 480 euros. Also, a notary fee is paid for entering into the Real Estate Register - it is 0.1% of the value of the object.

Property Ownership Tax

Owners of Bulgarian real estate have to pay real estate tax (dank property or municipal tax) and support tax (dank estimate, collection for garbage collection and recycling of household waste or municipal tax) every year. This applies to both physical and legal owners, both Bulgarian citizens and foreigners. If we compare the tax rates on owning real estate in Bulgaria with other European countries, then here they will be among the lowest. But their size can be different every year - this is determined by the tax authority using formulas that are calculated based on the location of the immovable object, its value, etc.

The final rate is indicated by a specific municipality and its value can range from 0.15 to 0.25% of the tax assessment of real estate, which is usually below the market value of the property. Tax accrual starts from the moment the object was put into operation, and it must be paid regardless of whether the property is used or empty. As mentioned above, together with the real estate tax, it is necessary to pay the communal tax, its rate is determined by a specific municipality, based on a number of certain factors. The utility tax is usually in the range of 0.14 - 0.45% of the property's notary value. In Burgas, the tax is 0.25% of the property tax assessment, in Varna it is 0.15%, in Sofia you will have to pay 0.325%, and in small towns the rate will be lower.

According to average estimates, if we are talking about a studio apartment, then for the year the amount of real estate tax and taxes is about 25 euros (these two taxes must be paid at the same time). The owner of a one-bedroom apartment usually costs 45 euros at these rates. This support tax in Bulgaria consists of the following components: expenses for general electricity around the house, general water (pool), as well as watering plants, landscaping, security, elevator fees, cleaning of territories (usually every day, wet cleaning of all common areas is carried out) , land tax, contribution to the capital repair fund. But its size or its availability depends on the particular residential complex and its services. As elsewhere, there are management companies that work well and not very well, therefore, when choosing an object, it is very important to listen to the opinion of the realtor and potential neighbors.

Individual utility costs are calculated as follows: two-tariff electricity: at night - 0.10 stotinki (0.05 euro cents) per kilowatt / hour, during the day - 0.18 stotinki (0.09 euro cents) per kilowatt / hour. 1 cubic meter of water will cost 2.80 leva (1.4 euros).

Rental tax

In Bulgaria, when renting out real estate, a lease agreement is concluded - next year this agreement is submitted to the tax office until April 30 and an income tax of 10% of the rent for the previous year is paid. If we are talking about renting for a short time to tourists, then you need to go through the categorization procedure, get status and stars. And, depending on the "star rating" of the property, a specific tax to the municipality will be determined. When renting a property for a long time, only income tax is paid.

Renting out real estate in Bulgaria is often carried out with the help of management companies, their cost of services starts from 30% of the proceeds after deducting cleaning costs and paying a maintenance fee - this is the most common scheme of work. Sometimes management companies take a fee of 50% of the proceeds, but this percentage depends on the number of services they provide, including a guaranteed percentage of profitability. There are also options for buying out the rental right before the high season.

Gift and inheritance tax

If the property is donated to first-level relatives, then the tax will be 1%. In all other cases, a 4% tax must be paid.

Terms and methods of paying taxes

It is necessary to pay taxes in Bulgaria on time and in the specified amount. For late payments, penalties are charged, which amount to 4-5% per annum at the refinancing rate of the National Bank of Bulgaria. In the year when the property was first purchased, the property tax is paid in proportion to the remaining months until the end of the current year. There are cases when it is possible to pay a smaller amount of tax, more details can be found in the document "Law for local taxes and taxis" .

For those who permanently reside in Bulgaria, it makes sense to pay the tax in installments. The entire amount is divided into four equal parts and transferred one at a time every quarter. If the entire tax is paid at once before March 30 of the year that follows the reporting year, then the payer will be given a 5% discount. Many people prefer to pay tax in two equal amounts. The first part is transferred from March 1 to June 30, and the remaining amount is paid until October 30. Everyone can choose a convenient payment method, the main thing is not to delay.

Thank you for your help in preparing the material:

Larisa Kostadinova, director of Aurora-Plus

Daria Borzova, Managing Director of Oazis Real Estate

Tatiana Baltakova, managing director of Pr emier Realty Master