Property Taxes When Buying or Selling Real Estate in Bulgaria – Complete Guide

Buying or selling real estate in Bulgaria is an important financial step that involves more than just negotiating a price. One of the most common questions among both Bulgarian and foreign clients of blueview.estate is:

What taxes and fees must be paid, and who is responsible for them?

This article provides a clear and practical overview of all property taxes in Bulgaria, explaining what buyers and sellers need to know before completing a real estate transaction.

Taxes and Fees Paid by the Buyer

1. Property Acquisition Tax (Local Transfer Tax)

This is the main tax paid by the buyer when purchasing a property in Bulgaria. The rate is set by the local municipality and usually ranges between 2% and 3% of the higher value between:

• the purchase price stated in the notarial deed;

• the official tax valuation of the property.

  
  

2. Notary Fees

Notary fees are calculated according to a state-regulated tariff and depend on the value of the property. These fees cover the official transfer of ownership before a notary public and are typically paid by the buyer, unless agreed otherwise between the parties.

3. Property Registration Fee

After the transaction is completed, the purchase must be registered in the Bulgarian Property Register. The registration fee is 0.1% of the property value and is paid by the buyer.

4. VAT (Value Added Tax)

In most cases, VAT is not applicable when buying residential property on the secondary market. VAT at a rate of 20% is charged only if:

• the property is newly built;

• the seller is a VAT-registered company or developer.

  
  

5. Annual Property Tax

Once the buyer becomes the legal owner, they are required to pay an annual property tax, determined by the municipality where the property is located. The new owner must declare the property to the local municipality within two months of purchase.

Taxes Paid by the Seller

1. Capital Gains Tax

The seller may be required to pay 10% capital gains tax on the profit from the sale of the property. The taxable profit is calculated as the difference between the sale price and the documented acquisition cost, adjusted for allowable expenses.

Tax Exemptions

The seller is exempt from capital gains tax if:

• one residential property is sold after being owned for more than 3 years;

• up to two properties are sold after being owned for more than 5 years.

  
  

2. Additional Seller Costs

Depending on individual circumstances, sellers may also incur:

• real estate agency commission fees;

• costs for obtaining documents, certificates, and cadastral sketches.

  
  

How to Plan Your Property Transaction Costs

To avoid unexpected expenses, it is recommended to:

• calculate all applicable taxes and fees in advance;

• clearly agree in writing who pays each cost;

• consult a professional real estate agent, notary, or tax advisor.

The team at blueview.estate supports both Bulgarian and foreign clients throughout the entire buying or selling process, ensuring transparency, security, and peace of mind.