Bulgaria taxes the gain on a property sale at a flat 10%, but whether you pay at all depends on how long you held it and where you are tax resident. What to work out before you list.
Buying in Bulgaria is cheap enough that many foreign owners plan to sell after a few years. Before you do, it is worth knowing what the exit costs. The short version: the gain is taxed at a flat 10%, but a holding-period exemption can bring that to zero, and who qualifies for it depends on your tax status.
How the tax is calculated
The taxable amount is the positive difference between the sale price and what you paid, as documented in the notarial deed. You can add documented improvements, such as renovation invoices issued in your name. Bulgarian tax residents also get a statutory 10% allowance on the gain, which brings the effective rate to about 9%. A loss on one sale is reportedly not carried forward against another.
The holding-period exemptions
Bulgarian law exempts gains in three cases, assessed per calendar year:
- one residential property held for more than 3 years
- up to two properties, residential or not, held for more than 5 years
- agricultural and forest land held for more than 5 years, with no limit on the number of sales
For property received by inheritance or gift, the clock runs from the date of the notarial deed, not from the original owner's purchase.
Non-residents: where the sources differ
An international law-firm guide describes a split. EU and EEA residents can use the same 3-year and 5-year exemptions. Non-residents from outside the EU and EEA are described as paying a flat 10% final tax without those exemptions. Other commentary treats all non-residents on the same footing as residents. The two readings lead to very different bills, so confirm your own status with a Bulgarian accountant before you price a sale.
Filing and paying
For residents, the gain is declared in the annual tax return, by 30 April of the year after the sale, using the annex for income from property sales. The notary does not collect the seller's income tax for you, so do not assume the sale closing settles it.
Your home country
Bulgaria has double-tax treaties with many countries. Whether you owe more at home, or can credit the Bulgarian tax, depends on your country of residence and the treaty, so ask your home adviser before you sell, not after.
Before you sign a sale contract
- gather the notarial deed of purchase and every renovation invoice in your name
- count the holding period from the notarial deed date
- confirm whether you are a Bulgarian tax resident, an EU/EEA resident or neither
- ask an accountant to model the tax under the exemption and without it
- note the 30 April deadline for the following year
FAQ
What is the rate? A flat 10% on the gain, about 9% effective for residents after the 10% allowance. Is a sale after three years tax-free? For one residential property per year, yes for residents and EU/EEA residents, subject to the conditions; non-EU non-residents are described as not qualifying. Can I deduct renovation costs? Yes, if documented and invoiced to you. When do I declare? By 30 April of the year after the sale. Does the notary handle my tax? No, plan to file yourself or through an accountant.
How we help
We put you in touch with Bulgarian tax advisers and help gather the documents a sale needs. Informational only, not tax or legal advice; rules and thresholds change, and treatment depends on your tax residency, so confirm with a qualified adviser before relying on any figure here.