Headline yields in Bulgaria and Portugal look similar. After tax, buying costs and empty months the gap shrinks to a few tenths of a percent. A side-by-side calculation on 150,000 euro, with the assumptions shown.
Searches for income property in Bulgaria and in Portugal usually end with a headline yield, 5 or 6 percent for a city flat. What matters is what is left in your account. This guide puts the two countries side by side on the same budget, using the gross yields from our single-country guides (Bulgaria, Portugal), the tax rules in each country and a stated set of assumptions. The arithmetic is ours, an illustration and not market data. Figures are indicative as of October 2026.
The headline numbers
- Bulgaria: gross yield of about 4.2 percent in Sofia, about 4.3 to 5.2 percent in Varna and about 5.1 to 5.3 percent in Burgas. Global Property Guide shows Sofia at about 3.84 percent and Varna at about 4.29 percent for Q3 2026. Resorts are quoted higher but depend on a short season.
- Portugal: gross yield of about 3.8 to 4.3 percent in Lisbon and about 4.0 to 4.8 percent in Porto, with 6 to 8 percent in thin inland markets. Idealista puts the national average at 6.2 percent on asking prices, falling year on year, while Global Property Guide gives about 4.3 percent.
On gross yield alone, Bulgaria's large cities and Portugal's coastal cities are close. The inland Portuguese cities and the Bulgarian coast are higher, and both come with a catch described below.
Tax on rent: the main difference
- Bulgaria: a non-resident is reported to pay 10 percent of gross rent, with no deduction for costs, withheld by the tenant if the tenant is a company or paid by the owner if the tenant is a private person. Residents of the EU and EEA can elect to file an annual return and be taxed as a resident, which gives a 10 percent allowance and an effective rate of about 9 percent of gross rent. Your home country may tax the same income, see tax on foreign rental income for Polish residents if you are one.
- Portugal: a non-resident landlord is generally taxed at a flat 25 percent on net rental income, after deductible expenses. The 2026 housing tax package introduces a reduced 10 percent rate for qualifying moderate-rent leases (a rent cap of about 2,300 euro a month; sources differ on the minimum lease term). We could not confirm whether a non-resident can use it, so treat it as an upside to check with a Portuguese accountant, not as the base case.
Bulgaria's tax is lower in rate but charged on gross rent; Portugal's is higher in rate but charged on net. When your costs are small the Bulgarian rule is lighter, and when your costs are high the difference narrows.
The same 150,000 euro in both countries
Assumptions, identical in each case: purchase price 150,000 euro; one empty month a year; running costs (condominium fees, insurance, repairs) of 1 percent of the price a year; no management fee and no mortgage; property tax of 0.15 percent of the price a year in Bulgaria and 0.2 percent in Portugal; buyer costs of 6 percent in Bulgaria (the middle of the 4 to 8 percent in our Bulgaria prices guide) and 9 percent in Portugal (the middle of the 8 to 10 percent in our Portugal prices guide). Tax is the non-resident base case in each country.
- Sofia, gross yield 4.2 percent: rent 6,300 euro, 5,775 euro collected. After running costs (1,500), property tax (225) and 10 percent tax on collected rent (578) about 3,470 euro is left: 2.3 percent of the price and 2.2 percent of the 159,000 euro actually spent.
- Varna or Burgas, gross yield 5.2 percent: rent 7,800 euro, 7,150 euro collected. After costs and tax about 4,710 euro is left: 3.1 percent of the price and 3.0 percent of the 159,000 euro spent.
- Porto, gross yield 4.4 percent: rent 6,600 euro, 6,050 euro collected. After running costs (1,500), property tax (300) and 25 percent tax on the remainder (about 1,060) about 3,190 euro is left: 2.1 percent of the price and 2.0 percent of the 163,500 euro spent. If the 10 percent rate applied, about 3,825 euro would be left: 2.6 percent of the price and 2.3 percent of the amount spent.
- A thin inland Portuguese market, gross yield 6.5 percent: rent 9,750 euro, 8,940 euro collected. After costs and 25 percent tax about 5,350 euro is left: 3.6 percent of the price and 3.3 percent of the 163,500 euro spent. At 10 percent tax it would be about 6,420 euro, or 4.3 percent of the price.
The pattern is simple. A headline gap of one point or more shrinks to a few tenths of a point once tax and costs are counted, and the coastal and capital cities of both countries land at roughly 2 to 3 percent of the price. The higher results (3 to 4 percent) appear only in the Varna and Burgas case and the Portuguese inland case, which are exactly the thinner markets. These figures exclude management fees (typically needed if you live abroad), mortgage interest, tax in your home country and any change in the price of the flat.
Where each country works
Bulgaria works best for a small, cash-bought flat in a large city with a deep tenant pool, bought at a fair price and let long term. Sofia has students and professionals; the Burgas and Varna coast has a larger summer market but, as our Bulgaria guide shows, resort owners face a short season, rising fees and, in 2026, falling transaction volumes. Rents in the centre of Sofia for a two-bedroom are quoted at about 800 to 1,100 euro a month in agency guides; we found no reliable figure for Plovdiv.
Portugal works best where you value liquidity, a larger and more international tenant base and the chance of price growth over headline yield. Prices rose 16.5 percent year on year in the second quarter of 2026, while rents were flat to falling, and a one-bedroom in Porto has a median rent of about 1,003 euro a month and in Lisbon about 1,409 euro (idealista, Q2 2026). Inland cities show higher yields but are thin, slow to resell and slow to appreciate.
Risks that the yield does not show
- Regulation: Portuguese short-term lets are tightly regulated, see Portugal short-term rental rules; Bulgarian lets have their own rules, see Bulgaria short-term rental rules. Do not budget on holiday income before checking the specific unit.
- Exit: Bulgarian prices have risen fast, with a cooling holiday segment in 2026, and Portuguese prices have risen faster than rents. A sale is taxed separately, see capital gains tax in Bulgaria and capital gains tax in Portugal.
- Buyer costs: Portugal's are higher, and from May 2026 non-residents pay a flat 7.5 percent IMT on residential purchases, with exceptions (sources differ on the exact start date).
- Specific risks of each market: investing in Bulgaria and investing in Portugal.
Which to choose
- If your priority is a higher net yield from a modest budget and you accept a thinner, more local market, Bulgaria's Varna and Burgas or a well-bought Sofia flat come out slightly ahead on these numbers.
- If your priority is a liquid asset in a recognised market with more international demand, and you accept a yield of roughly 2 percent net, Portugal's Porto or Lisbon fits better, and the 10 percent tax rate, if available to you, would help.
- If neither number is enough for you, consider that financing, currency and your own tax residence can change the picture more than the choice of country. See mortgages for foreigners in Bulgaria and in Portugal.
FAQ
Is yield higher in Bulgaria or in Portugal? On headline gross yield, they are close in the large cities and higher in thin markets in both. After tax and costs on our example, Varna and Burgas come out a little ahead of Porto, and Sofia and Porto are close.
Do I pay tax in both countries? You pay tax on rent where the property is. Whether you also owe tax at home, and whether the treaty gives you credit, depends on your country of residence. Ask an adviser.
Does Portugal's 10 percent rent tax apply to me? It was reported in 2026 for moderate-rent leases. We could not confirm that non-residents qualify, so check it before you count on it.
Is short-term letting a way to raise the yield? Sometimes, but it is the most regulated and most seasonal part of both markets. See short-term vs long-term rental.
How we help
We shortlist rental properties in Bulgaria and Portugal against your budget and goal, model the net yield with real local costs and coordinate lawyers and tax advisers. Browse the markets on the Bulgaria page and the Portugal page.
Informational only, not legal, tax or investment advice. Yields, taxes and rules are indicative and change.