Overview of Bulgarian Tax System

Municipal tax of up to 3% of market value depending on the location of the property. It is also payable on completion.

Capital Gains Tax – some buyers are concerned with lower tax estimated prices and its impact on Capital Gains tax implications over the coming years and particularly when they come to resell. Whilst we aren’t qualified to advise you on tax issues we can quote below relating to foreign buyers:

Capital Gains Tax: The new Personal Income Taxes Act has been promulgated and entered into force as of 1st January 2007 and the situation with regards to capital gains tax is clearer now. In principle for foreign persons (who do not reside in BG more than 183 days within one year) it is 10 % of the profit (the balance between the declared purchase price and the declared sale price minus 10 % recognised by the law as expenses that reduce the taxable profit) but there will be no capital gains tax, if the following conditions are met

During the calendar year the person has sold only one real estate in Bulgaria (i.e. for more than one property there will be capital gains tax)

During the calendar year the person has sold up to 2 real estates but more than 5 years have passed since the person has acquired the estates in question

For tax purpose the person is considered resident of a member state of EU or another state from the European Economic Area, i.e. the tax relief is only for European citizen

Property tax is payable by anyone who owns a building or building plot.

Value Added Tax – Value Added Tax (VAT). VAT rate applicable to the purchase of real estate in Bulgaria is 20%. In the event that the apartment was bought  through a Bulgarian company, the buyer, after pre-registration for VAT, may require repayment of VAT paid.

Wealth Tax – There is no wealth tax in Bulgaria.

Latest Kobalt Law Tweet

Latest Kobalt Law Client Testimonials

English, French and Portuguese Re-mortgages

Thank you for completing complex mortgage repayments simultaneously in three countries. David and Stefano were excellent, remaining calm and efficient in trying circumstances. I was very satisfied with their service, and would not hesitate to use Kobalt Law again.  

Visit Testimonials Page