FAQ ABOUT Taxes and expenses when buying real estate in Bulgaria

Purchasing property in Bulgaria can be attractive for non-residents due to favorable conditions and relatively low prices.

However, it is essential to understand all the taxes and expenses that may arise during the acquisition, ownership, and sale of property.

Property prices in Bulgaria vary depending on the region and type of property. On average, the cost per square meter in the capital city Sofia and major cities such as Varna and Burgas can be higher compared to less populated areas of the country.

In resort areas and coastal regions, prices also tend to rise, especially during popular tourist seasons. This increase in prices is driven by high demand for properties in these desirable locations.

• Three-Bedroom Apartment in a Resort Area: approximately €800 000
• Penthouse in Central Sofia: Around €400 000
• Apartment in Central Sofia or Varna: About €200 000
• Apartment in Burgas: Prices start at €100 000 and can vary based on the location and condition of the property

• Property transfer tax: This tax ranges from 0.1% to 3% of the purchase price, depending on the region. For example, in Sofia, this tax may be around 2% of the property's value
• Notary fees: The notary charges for certifying the transaction, which can range from 0.1% to 1.5% of the transaction amount

• Registration fee: The fee for registering the property ownership in the Property Registry is approximately 0.1% of the property value
• Agency fee: This fee can vary from 2.5% to 6% of the transaction amount and is often shared between the seller and the buyer depending on the contract terms.

Each property owner in Bulgaria is required to pay an annual property tax. This tax ranges from 0.1% to 0.45% of the cadastral value of the property, depending on the region.

The specific rate can vary based on local municipal taxes and property valuation.

When selling property in Bulgaria, owners must pay a capital gains tax. The tax rate is 10% on the difference between the sale price and the purchase price of the property.

This tax applies only if the property is sold within 3 years of purchase. If the property has been owned for more than 3 years, no capital gains tax is due.

• Utility bills: These include payments for water, electricity, gas, heating, and waste collection. These costs can range from €60 to €150 per month, depending on the size and type of the property

• Internet and television: Additional communication costs are around €8 to €15 per month
• Maintenance and repairs: These costs depend on the property's condition and location

If you rent out your property, you must pay tax on rental income. In Bulgaria, the tax rate on rental income is 10%.

Property owners are required to file a declaration of income and pay the tax within the specified deadlines.

The return on investment  from renting out property in Bulgaria can be quite attractive. Depending on the type and location of the property, rental income can range from 4% to 8% annually. Seasonal variations and demand for rentals, especially in tourist and resort areas, play a significant role in maximizing rental yields.

Mercury Group experts handle the entire process of purchasing property in Bulgaria, from selecting the property to preparing a comprehensive set of documents "turnkey," and also assist our investors by providing a full range of concierge services.