Value Added Tax – paid once
20% VAT is chargeable on the sale of real estate in Bulgaria. Normally this is included in the purchase price of the property. The seller submits then the VAT to the state. All of Tebsa properties are inclusive of VAT but be careful as this is not the case with all properties.
Property Tax – paid annually
The tax is due from the month following the month of acquisition of the property and is calculated on the basis of the tax evaluation. The tax evaluation of the property is determined by the tax authorities and depends on factors including the type of the property, its location, the total area and construction type. The rate for residential purposes is fixed by the local authorities. The real estate tax is due regardless whether the property is used or not. The tax can be paid in one sum at the beginning of the year or quarterly in four installments. This tax usually represents 0.25% of half the tax evaluation for your property.
Rental Income Tax (Capital Gain tax) – paid annually
Non-residents are taxed as per their annual Income Tax Declaration, that needs to be submitted to the tax office up to 30 April of the year following the year in which the income occurred. Income over 2400 BGN for the year is taxed at 10%. Non-residents pay tax only on the income gained in Bulgaria, no tax is due on foreign income.
Corporate Tax – paid annually
The companies are liable for this tax on its income. From 2007, standard corporate tax in Bulgaria is 10%. Foreign companies with no income arising in Bulgaria do not owe corporate tax.
Income tax for Individuals on Property Sale – paid annually
Both residents and non-residents do not owe income tax as physical persons on the sale of one residential property, regardless of the date of acquisition, and on the sale of up to two residential properties, provided that the properties have been acquired more than five years ago.
Non-Double taxation agreement
Bulgaria has signed a non-double taxation agreement with most of the EU countries. This means that any taxes paid in Bulgaria will be deducted from the taxes you have to pay when bringing your capital gain back to your country of residence.
Taxes can be subject to change.
Notary and Municipality Fees – paid once
At the date of signing the Notary Deed, around 3,5% of the sales price is due as Notary and State taxes – a legal requirement for notary fees and tax on acquiring a property in Bulgaria.
Garbage Collection Fees – paid annually
The garbage collection fee is paid together with the property tax and as the property tax the amount is based on half the official property tax evaluation and is in the region of 150 Euros annually.
Water and Electricity Fees – paid once
A small registration fee for electricity and water in your name is applicable.