Property Taxes and Expenses in Bulgaria: What You Need to Know Before Buying

The cost of real estate isn’t just the price per square meter. When buying, it’s important to factor in additional taxes, notary fees, annual payments, and maintenance costs. Having a clear understanding of all these costs helps you plan your budget effectively and avoid unexpected expenses after the transaction.

Real Estate Acquisition Tax (Местен данък при придобиване)

This tax is levied by the municipality upon the purchase of real estate. The rate varies by municipality and ranges from 2% to 3% of the value stated in the notarial deed (or the assessed value, if higher).

Example:
When purchasing an apartment for €100,000, the tax will range from €2,000 to €3,000.

Payment is made in a single installment—at the time the notarized deed is signed, through the notary.

Notary and registration fees

In addition to the purchase tax, you must pay for notary services and the registration of the transaction with the Imoten Register.

On average:

• Notary fees amount to approximately 0.1–1.5% of the transaction amount (depending on the property’s value and the fee schedule).
• Registration fee: 0.1% of the price.
• Legal and administrative fees: €50–100.

Tip: Notary fees can often be estimated in advance if the exact transaction amount is known. Some notaries provide a preliminary estimate.

Annual Property Tax (Danak vrakhneite imoti)

After registering the property, the owner pays property tax annually.

Rate:
0.1% to 0.45% of the assessed value (set by the local municipality).

Payment is due once a year, usually by June 30.
A 5% discount is often offered for paying the full amount in advance.

Household Waste Tax (Smet Tax)

This fee is also collected by the municipality and is used to cover the costs of cleaning the area and garbage collection.

The rate is set by the municipality and averages 0.1–0.3% of the property’s assessed value.
Payment is due annually, along with the property tax.

Residential complex maintenance fees (Maintenance fee)

If the property is located in a gated community or an apartment hotel, the owner pays an annual fee for the maintenance of common areas.

What’s included:

• cleaning and security of the premises;
• lighting, elevators, swimming pool, landscaping;
• expenses for management, accounting, and internet access in common areas.

Intermediate level:

• from €6 to €15 per square meter per year — for resort complexes;
• 2 to 5 euros per square meter — for urban buildings.

Before making a purchase, it is important to clarify:

• Who manages the complex (a management company or the building itself);
• what exactly is included in the service;
• Is there a reserve fund, and how is it established?

Utility costs

Monthly payments depend on the type of housing and the region. Average estimates for a 60–80-square-meter apartment:

When purchasing a home that you don’t live in full-time, it’s important to factor in the costs of security, an alarm system, and basic heating during the winter.

Rental Income and Taxes

If the property is rented out, tax is paid on the income received.

Rate:
10% of net income (income minus 10% of recognized expenses).

Example:
If the rent is 1,000 BGN per month, the tax will be approximately 90 BGN.

Separate reporting requirements apply to companies or individuals registered for VAT.
It is recommended to enter into formal lease agreements and register them with the municipal registry—this provides protection for both the landlord and the tenant.

Real Estate Sales Tax

If the property is subsequently sold, a capital gains tax (Danak pechalba ot prodazhba) may apply.

The following are exempt from tax:

• properties owned for more than 3 years (primary residence);
• or more than 5 years, if the owner owns no more than one other property.

If the conditions are not met, the tax rate is 10% of the difference between the sale price and the purchase price.

Insurance expenses

Property in Bulgaria can be insured against fire, flooding, natural disasters, theft, and other risks.
The cost of an insurance policy ranges from 50 to 150 euros per year, depending on the type of property and the coverage.

Banks often require mortgage insurance.

Additional legal and banking expenses

• Opening a bank account: free or 5–10 BGN
• Account maintenance fee: 2–6 BGN/month
• International transfers: a fee of 0.1–0.2% of the amount.
• Legal services: €300 to €600 for transaction support.

If the property is purchased through a company, accounting fees (100–200 BGN/month) are added.

How to Optimize Expenses

• Pay your taxes early and get a discount.
• Check the actual assessed value: sometimes it is significantly lower than the market value, which means the tax base will be lower.
• Compare maintenance fees across different complexes—a difference of 2–3 euros per square meter can significantly impact your annual costs.
• When purchasing a property during the construction phase, be sure to confirm whether VAT and fees are included in the contract price.
• Use a single bank account for all transactions—this will simplify record-keeping for future tax returns.

How We Help Our Clients

Our company supports clients at every stage of the investment process—from property selection and document review to tax planning and after-sales service.
We help you calculate the total cost of ownership, optimize your taxes, and choose the right purchase structure—whether as an individual or a business entity.