VAT and tax valuation

The transfer of ownership in Bulgaria is done with a title document called Notary Act or Notary Deed signed before a licensed Notary Public official and in the presence of the Seller and the Buyer (or their legal representatives).

Prior to signing the Notary Act, the Local Municipal Council performs a tax evaluation of the property subject of the sale.This valuation represents the minimum value that must be reflected on the Notary Act. It is this value that appears on the Notary Act in the majority of property transactions in Bulgaria.Tax Valuation Rates vary by municipality across Bulgaria but in general they are between 20 - 50% of the full market value.

If a buyer wishes, at his discretion, to register a value higher than the Tax Valuation on the Notary Act, then he/she will incur some extra costs. These extra costs include extra notary fees, municipal taxes and VAT. In the case of newly built and off-plan properties, a higher Notary Act price can increase the purchase price significantly.

The same system for Tax Valuation prior to the Notary Act applies when an individual sells a property in Bulgaria. However, VAT is not owed on transactions conducted between individuals.

Current VAT Rate: 20% (nationwide)

Notary fees

• Valuation from 101 – 1000 BGN - notary fee 30 BGN + 1.5% for the sum above 100 BGN.
• Valuation from 1001 – 10 000 BGN - notary fee 43.50 BGN + 1.3% for the sum above 1000 BGN.
• Valuation from 10 001 – 50 000 BGN - notary fee 160.50 BGN + 0.8% for the sum above 10 000 BGN.
• Valuation from 50 001 – 100 000 BGN - notary fee 480.50 BGN + 0.5% for the sum above 50 000 BGN.
• Valuation from 100 000 – 500 000 BGN - notary fee 730.50 BGN + 0.2% for the sum above 100 000 BGN.
• Above 500 000 BGN - notary fee 1530.50 BGN + 0,1% for the sum above 500 000 BGN, but not more than 6 000 BGN.
  

Taxation of EU citizens

Income (capital gains) received from the sale or exchange of one residential property per year is not taxed.

Income (capital gains) received from the sale or exchange of 2 residential properties as well as agricultural land or forests if owned by a physical person for more than 5 years is not taxed.

Taxation of non EU citizens

All income and capital gains derived from the sale, exchange or rent received by persons who are not local and are not citizens of EU countries are taxed. The current tax rate is 10%.

Rental income

All rental income is taxable for both EU and non EU citizens.

Foreign ownership

Under the Bulgarian Act on Foreign Ownership, foreigners are allowed to buy buildings but not land. This restriction is simply avoided by setting up a Bulgarian company that owns the land.

Our off-plan developments do not require company incorporations and when you buy an apartment, you buy a section of the building. This section of the building is freehold and there is no lease, the apartment is yours forever, or until you sell.

Hiring a legal counsel

Even though retaining a lawyer is not a requirement, it's always advisable to have one who has experience with property transactions in Bulgaria to review the paperwork and contracts the developers and sellers propose.

Disclaimer

NTC International, Inc. is not a party to any contractual agreements between buyers and sellers. All specifications, prices, promotions and features are determined by the developers and are subject to change without notice.

The information contained herein is not ment to be exhaustive. Please do not hesitate to contact us with specific questions related to these matters.