Taxation in Bulgaria

Bulgaria boasts one of the most favorable tax regimes in Europe.

I. Individual Income Tax in Bulgaria: applicable to individuals who own apartments in Bulgaria.

The Bulgarian residents and citizens of EU member countries are treated differently than the citizens of other countries.

1. Taxation of BG residents and citizens of EU countries

The following income is exempt from tax:

(i) Income from the sale of one property in Bulgaria during the same calendar year (i.e. for more than one property there is capital gains tax);

(ii) Income from the sale of up to two properties during the same calendar year when more than 5 years have elapsed after the acquisition of the properties.

Income – subject to taxation:

(i) Income from the sale or exchange of more than one residential property per calendar year, unless 1(ii) applies.

(ii) Property rental income.

2. Taxation of individuals who are not BG residents and EU citizens

Income from sale, exchange or rent is taxed at a rate of 10%.

II. Other Taxes and Fees Incurred when Buying & Selling Property in Bulgaria:

Property Transfer Fees

The transfer is subject to notary and municipal fees. The total transfer expenses related to the purchase of a property are approximately 4% of the price of the property and include the property transfer tax, the Notary fee and the Land Registry fee.

Annual Real Estate Tax

There are two property taxes payable yearly: property tax and garbage collection fee. The tax rates are set by the Municipality where the property is located. InVarnaregion the taxes are 0.2% property tax and  0.1%– 0.18% garbage collection fee. The tax base is the assessed value of the property as calculated by the local tax authorities.