EU Regulation 2024/1028 is the first pan-European mechanism that forces online platforms to act as state tax intermediaries. Until now, the authorities have been regulating the short-term rental market almost blindly without reliable data on the real number of facilities and revenue volumes. Now, instead of chaos, order will come.
The main innovation is the mandatory registration number for each object. Since May 20, platforms (Airbnb, Booking and others) are required to automatically check this number in real time through the Bulgarian Unified Travel Information System (ESTI). If the number is invalid or missing, the ad will be hidden, and the owner of the object will be notified of the need to enter data. In addition, the platforms provide the state with information on the number of overnight stays and the number of guests on a monthly basis. This makes it impossible to conceal income.
According to estimatesSergey Basin, director of the Alternative agency, member of the Bulgarian Bar Association, from 30 to 50% of active ads in the country are currently in the gray zone. After May 20, they will simply disappear from the platforms if the owners do not have time to register. Prices for overnight stays are also projected to rise from 10 to 40% in the short term, as the costs incurred by legalized landlords will fall on the shoulders of guests, and illegal competitors will leave the market.
The regulation was adopted by the European Parliament back in April 2024, but there was a two-year transition period, explainsAneta Vodenicharova, director of the agency Eltrade. "We knew about the need to register, because we work in this market," says the expert. But many people did not know about it, especially foreigners, and even now many do not know. Now the whole market will be in the light."
What the owner needs to do to legally rent an apartment
The new rules are mandatory for all Bulgarians and foreigners without exception.
The first thing to do is contact the community (municipality) by the location of the apartment, for example, in the community of Burgas or Sozopol. There it is necessary to submit an application in which to indicate whether the apartment is rented in its entirety or only a room, as well as what is the maximum number of guests. Registration in the community is quite fast. The amount of the one-time fee depends on the municipality.
Evgenia Peshkova, director of the agency Oazis Real Estate, notes that the municipality is also "categorizing" the object, that is, assigning "stars". You will need to specify the exact characteristics of the property: the number of beds, the area, and the amenities offered. "In fact, this is all the same data that is indicated when posted on the platforms, but with the difference that now the information will be publicly available to the state," she explains.
The registration number is issued by the community once and does not change thereafter. If the owner has changed his mind about renting out the apartment, the registration can be deleted; if the characteristics of the object have changed (for example, a sleeping place has been added), the data can be adjusted, but the number remains the same.
Another important nuance that Evgenia Peshkova draws attention to: in many residential buildings, it will be necessary to obtain the consent of neighbors to rent an apartment for short-term rent (if this is provided for by the rules of Floor ownership). This can be a problem for some landlords, especially in older complexes, where residents may be against the flow of tourists.
The second step is to register with the Tourism Agency, that is, in the Unified System of Tourist Information (EST). This can be done online, but an electronic signature will be required. After registration, the owner has a personal account.
The third step is working with the system during the delivery process. After each check-in, the owner is required to enter information about tourists into the system. "This data must match the information on the platform," explains Aneta Vodenicharova. For example, four people came to you for five days, and an Airbnb reservation is also four people for five days. After the tourists have moved out, you should note that they were there and indicate how many days they lived. After the departure of the guests, you will need to pay the tourist tax: the amount, account number and payment deadline will be indicated on the website.
Taxes and real expenses
Legal short-term rental of an apartment in Bulgaria involves several types of payments.Firstly, it is a income tax. There are two modes. The first and most profitable for small facilities is the patent tax: a fixed amount per year (from 12 to 120 euros), which does not depend on real income. It is suitable if the annual turnover is below 51,130 euros, the apartment has less than 20 rooms, and the object has a tourist category. If these conditions are not met, the activity is recognized as trading, and then the income tax rate is 10% for individuals or 15% for legal entities.
Secondly, the tourist tax. It is charged per guest per night, from 0.10 to 1.53 euros per person.
Third, social contributions;(about 27-28% of the selected monthly base, at least about 550 euros per month). They are mandatory only for residents of Bulgaria.
Let's look at a typical example for clarity: the owner rents out a one- or two-bedroom apartment in Burgas, designed for three or four guests, with an average occupancy of 15 nights per month. If the owner lives in Russia and is not a Bulgarian resident, his monthly mandatory payments (patent tax, tourist tax, VAT from the platform's commission) will amount to about 60-70 euros (social contributions do not need to be paid). If the same owner has received a residence permit and actually lives in Bulgaria, monthly social and medical contributions are added to this amount, that is, he pays at least about 170-180 euros per month. Thus, the real tax burden for a Bulgarian resident may be 3-4 times higher than for a non-resident with the same rental income.
How to be a foreigner: two options
The first option - rent independently as an individual.&It requires a lot of involvement. "We recommend hiring an accountant who will handle financial affairs for you, especially if you are abroad," advises Aneta Vodenicharova. "We need a competent person who knows the legislation and how everything works."
The second option Transfer the facility to the management of a professional agency.This is the easiest way for those who do not want to plunge into bureaucracy. "Usually, foreigners themselves do not want to engage in short-term rental and management," the expert explains. "Then they sign a contract with the agency, and it performs all the functions for them."
To do this, the owner needs to issue a notarized power of attorney - it is possible in Bulgaria, it is possible in his own country. The agency takes care of everything: utility bills, taxes according to the scheme for legal entities. The company pays VAT at a discounted rate of 9% for the tourism sector (this applies only to accommodation services; cleaning, administration, repairs can be taxed at a rate of 20%). At the same time, as the expert clarifies, "there is no need for a tourist tax, no insurance tax, and no patent tax."
Aneta Vodenicharova believes that the net income of the owner renting out an apartment in Bulgaria will decrease by about 15-20% in the first time.
Fines for renting out housing without registration are substantial. For individuals, they range from 250 to 2500 euros, for legal entities - up to 5000 euros, and in case of repeated violations - up to 7500 euros.
"Information from online platforms will be provided to regulatory authorities not only for new facilities, but also for those that have been located for a long time," Evgenia Peshkova emphasizes.
What will happen to the market: forecasts and risks
Experts expect that after May 20, the supply on the platforms will sharply decrease by 30-50%, according to various estimates. Those who stay and legalize will be able to raise prices due to reduced competition. The rates, according to the expert's forecasts, will increase by about 10%.
Long-term lease remains for nowIt is outside the strict control of the new regulations, but its profitability is 2-3 times lower, and many owners will try to maintain the possibility of daily rent. In addition, "do not forget that long-term leases are also regulated by Bulgarian and European legislation and involve the payment of taxes," recalls Evgeny Peshkov.
Sergey Basin from the Alternative agency comments: "It is possible that gray deposit schemes will begin to actively develop through telegram channels and Facebook."* However, the expert warns that such a path is fraught with serious risks. Those who want to save money or do not have documents are often looking for housing on social networks, which increases your risks as a landlord. The platforms provide insurance and arbitration, and outside of them, the owner is left alone with the problem. In addition, the Bulgarian tax service is already monitoring large rental groups, and illegal activities without registration in the system are a direct route to administrative penalties.
Basin advises using legalization as a filter: to accept decent, solvent tourists from Airbnb in your apartment, and leave the risks associated with gray schemes to those who do not value their time and property.What is the result
EU Regulation 2024/1028 is not the end of short-term rental business in Bulgaria. This is the end of the "wild" market. Yes, income will decrease at first, but in return, the owner will receive transparent rules of the game, platform protection and access to paying tourists.
Those who hope to wait it out or go into the shadows risk running into heavy fines and confiscation of income. It's better to legalize without waiting for a deadline. It's time to act!*The Facebook social network belongs to Meta, whose activities are recognized as extremist and banned in the Russian Federation.
Thank you for your help in preparing the article.:
Aneta Vodenicharova, director of the agency Eltrade
Evgeny Peshkov, director of the agency Oasis Real Estate
Sergey Basin, director of the agency "Alternative"
Sources:
EU Regulation 2024/1028 EUR-Lex
Clarifications of the European Commission
Bulgarian Tourism Law Ministry of Tourism
Unified System of Tourist Information (EST)
Law on Local Taxes and Duties explanation
Law on the management of floor Property Rusty bulletin
National Register of Tourist Sites
