Local Taxes

Information on the local tax system which covers the immovable property tax, transfer taxes and inheritance tax in Bulgaria...

Local taxes are regulated by the Local Taxes and Fees Act, the most important being the immovable property tax, transfer taxes and inheritance tax.

Immovable property tax

This tax relates to owning immovable property. Some immovable property (including agricultural land, forest land, forests) are not subject to this tax.

The taxable persons are the owners or the holders of limited real rights over immovable property. The tax rate is determines by every municipality independently within a range of 0.1 to 4.5 per mil of the tax valuation of the property.

But there is a reduction of 50 percent of the tax, when the property is used as a main residence or 75 percent when the property is used as a main reseidence by a person with reduced working capacity.

Transfer taxes

This kind of tax is connected with the fact of transferring ownership or limited real rights over properties. Transfer tax shall be levied for acquisition of any properties by donation and for acquisition against payment of immovable properties, limited real rights or motor vehicles, registered in Bulgaria.

The tax rate for acquisition against payment is determined as well by every municipality independently in the amount between 0.1 to 3 percent. The tax rate is defined as (i) the higher of the tax valuation or the sale price for immovable properties and (ii) the insurance valuation- for motor vehicles.

The tax rate for donation is determined by every municipality independently as follows:

  • 0.4 % to 0.8 % on donations between brothers and sisters and their children
  • 3.3 % to 6.6 % on donations in other cases

No tax shall be levied on any properties acquired by donation between lineal relatives and between spouses.

The tax base is defined as the assessed value of the transferred properties.

Inheritance tax

Inheritance tax shall be levied in relation to:

  • the properties of Bulgarian citizens in the country or abroad, inherited by succession or under a will
  • the properties of foreign citizens in Bulgaria inherited by succession or under a will

Inheritance tax shall be paid by the statutory heirs or the heirs under a will. Inheritance tax shall not be paid by the surviving spouse and by lineal heirs (for instance children, parents etc.) without restriction.

All of the heirs shall submit a declaration to the municipality within 6 months after the death of the decedent, in which the decedent had his last residence, or if he had no residence in Bulgaria- to the municipality on whose territory most of the properties included in the inheritance are located.

The inheritance tax rate is defined by every municipality independently within the following limits:

  • 0.4 % to 0.8 % for a hereditary share at the amount over 250 000 Bulgarian levs- for brothers and sisters and their children
  • 3.3 % to 6.6 % for a hereditary share at the amount over 250 000 Bulgarian levs- in other cases
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