Property Taxes In Bulgaria

Every owner of a building or a plot is obliged to pay annual property tax. In addition to the real estate tax, owners also pay waste-collection fees unless they are unsubscribed from it.

Once you purchase a property in Bulgaria you have to declare it in the local Tax services. You submit a standard form along with a copy of your notary deed. This must be done in 3 month period after the purchase date. Otherwise you will be charged with a penalty fee. Once the local Tax services have the property declaration they can calculate your annual taxes and waste collection fees.

If a building is built on a State or municipal plot, the value of the plot will also be included in the tax base. The tax amount varies from 0.10% to 0.15% of the tax evaluation price of the property. The garbage collection tax varies from 0.025 to 0.027 of the tax evaluation price. The exact percentage depends on the local Municipality. The investors should be aware that the tax evaluation price is times less than the market one.

The tax evaluation price is calculated with a formula that includes a basis tax value per sq m and correctional coefficients for location, quality of infrastructure, individual characteristic, height and age of the property. Change in any of those parameters leads to change in the tax evaluation price.

The basis tax value deserves special attention. It’s a practice worldwide this basis to be as close to the market value as possible. However in Bulgaria property prices show growth of more than 20% every year. That is why it is extremely difficult to keep up to day with market values. The last time the basis tax value was recalculated was in 2002.This makes Bulgaria the country with lowest property tax in the whole European Union.

For example the annual property taxes and the annual garbage taxes for a property in a big Bulgarian city or in a resort area are 50-70 EUR.

For a solid house, 90 sq.m area in the Super Center Zone in Bourgas the annual real property tax is around 55 BGN and the waste collection fee is 60 BGN. For a flat in a quarter in Bourgas with 45 sq. m area they are 30 in total. In a small town (like Karnobat town) for a house, 65 sq. m the property tax plus waste-collection fee is 20 BGN . For a house with yard in a village the total payment would be 5-6 BGN per year.

Agricultural land is exempt from all local taxes. Changes in the law are vividly discussed in order to have small taxes on agricultural land but still nothing is publicly accepted. According to officials taxes on farm land will revitalize the market for this type of estates. Moreover it will make owners of small plots sell or re-allot with others.