Property and Waste Collection Tax. The annual property tax is 0.15 % of the declared value of your property, although this is often lower than the actual value of the property. There is also a waste collection tax, which is 0.15 – 0.5 % of the property’s value.
Value Added Tax (DDC in Bulgarian) is 20 %. If you buy a property from a company then the purchase price is subject to VAT. Check whether VAT is included in prices quoted by developers or estate agents. Bulgarian companies with an annual turn-over over 50 000 leva, including those set-up by foreigners to buy property, must be VAT registered. Generally you do not pay VAT on land purchases, or when you buy property from an individual.
Income and Corporate Tax. The tax you pay on money earned in Bulgaria, including rental income, depends on your tax status and whether you bought the property through a Bulgarian company. If you are a Bulgarian tax resident your income tax bill is calculated on a progressive scale, with the highest rate currently 24 %. Bulgarian companies pay a 15 % corporation tax on profits.
Capital Gains Tax. You will need to pay income tax on any capital gain when you sell your property. You are permitted to own one property that is exempt from this tax. Classed as your main residence, you must have owned it for at least three years before the sale. Bulgarian companies pay the 15 % corporation tax on any capital gain. Seek expert advice about your tax situation before making any property purchase.