The Bulgarian tax authority is the National Revenue Agency. Income tax on individuals is 10%. The seller insists that a lower price is put on the title deed (tax evasion). The VAT rate in Bulgaria is 20%. 2. The rule of thumb: sell one property per year tax free. We offer services to acquire and conclude your tax bill for you for an administrative charge of 50 Euros + … Changes in the law are vividly discussed in order to have small taxes on agricultural land but still nothing is publicly accepted. This website or its third party tools use cookies, which are necessary to its functioning and required toachieve the purposes illustrated in the cookie policy. Any rental income you have from the property is subject to 15% Bulgarian withholding tax. A foreign domiciled person is subject to inheritance tax only on property … Bulgaria applies a worldwide income tax system and residents are taxable on their worldwide income. Obtaining a Bulgarian ID card is a precondition to be granted tax residence of Bulgaria. Once you have established a Bulgarian company, you have to do an annual company tax reports and declaration. In many countries a holding period of less than 5 years results in capital gains being taxable. The tax amount varies from 0.10% to 0.15% of the tax evaluation price of the property. Bulgarian Property repair, renovations. Professionals in Bulgarian Property Sales for Irish and British Investors We have been successfully representing Irish and British investors to Buy, Sell and Manage their properties in Bulgaria for over twelve years. Done this way, there is no Capital Gains tax to pay. If a building is built on a State or municipal plot, the value of the plot will also be included in the tax base. Bulgarian Property Taxes. The income tax is regulated by the Bulgarian personal income tax law. There is an inheritance and gift tax of between 0.4% and 6.6%, depending on the relationship of the beneficiary. This salary constitutes a tax deductible cost for the Bulgarian company and the receiving individual pays 10% Bulgarian personal income tax on that income in Bulgaria. These have no reason to be expensive whilst still effective. Selling your Bulgarian property Selling your house, land or apartment is a very important action, particularly if it is owned by a domestic registered limited liability company in your name. 20% of the income is regarded as non-taxable. use (also known as Act 16) has been issued prior to 60 months are exempt, unless the seller opts out to treat them as VATable. For a flat in a quarter in Bourgas with 45 sq. The tenant pays this tax over to the Bulgarian Authorities, quarterly, on your behalf. The most common mistakes made when buying a property in Bulgaria can be summarized as: Paying a deposit to reserve a property. If you work as an employee with only a labor contract, you are not required to submit a tax return. Employment income earned in Bulgaria is also subject to various social security insurance contributions. Nevertheless, the WHT rate may not … Inheritance law regulates the financial consequences that arise as a result of the death of individuals, as well as the subsequent transfer of their assets. Property Tax. Personal income tax rates. Agricultural land is exempt from all local taxes. After buying a property in Bulgaria you are liable for annual property taxes. Law firm Ruskov & Kollegen ul. Most foreigners buying property in Bulgaria must form a limited company to purchase land, so they will be subject to corporation tax. However, the foreign individual can purchase the, 2) during the Bulgarian tax year the person sells not more than one residential property regardless of the date of its, 3) during the Bulgarian tax year the person sells not more than two properties, if they have been owned for more. 1. The tax legislation in Bulgaria includes the principles of establishment and functioning of the tax system. Brief information on taxation is provided within the Living in Bulgaria guide. For all other beneficiaries, the inheritance tax rates vary, depending on the relationship between the donor and the heir. Option one above is valid only if an apartment or a house is bought without the land. m area they are 30 in total. Inheritance law regulates the financial consequences that arise as a result of the death of individuals, as well as the subsequent transfer of their assets. Bulgaria-domiciled individuals are subject to inheritance tax on inherited property both located in Bulgaria and abroad. If the tenant is an individual, s/he must pay gross rents to the landlord and the landlord must pay income tax @10%, quarterly, to the Bulgarian tax office. Any subsequent property sold in the same year will attract around 10% tax on any profit made. Homestead Exemption is a savings allowed for those property owners who own and live at their primary residence. Withholding tax is deducted by the buyer of the property and paid over to the Bulgarian Tax Authorities by the end of the month following the end of the quarter in which the change of ownership took place (the Notary Deed date is to be considered as the date of the transaction). This transliterates to danŭk kŭshta. Option to pay per Job or time spent. Once you have accepted an offer for your property and a deposit has been collected the conveyancing procedure must get underway. Bulgarian residents are subject to tax on their income from sources in Bulgaria and abroad (including the business as a sole trader) and the incomes of foreign individuals are taxed only if they are acquired from sources in Bulgaria. Everybody who set up a company for the purpose to buy real estate in Bulgaria ( house, land, apartments, etc) have to declare... 25.10.2016 Bulgaria- one of the most preferable destinations to buy holiday residential property It includes a 0.15% Inhabited house duty and a 0.16% Waste Collection duty. Properties that sold for €80,000 10 years ago are widely available now for €25,000. Homestead Exemption is a savings allowed for those property owners who own and live at their primary residence. Several European countries apply an attractive corporate tax regime but tend to neglect the personal income tax aspect. Invest in property which he purchases as an individual. Bulgarian Property repair, renovations. To obtain Bulgarian tax residency you are not required to stay for 183 days in Bulgaria. Specific tax planning advice to your circumstances should be sought. Personal Income Tax- 10% (flat rate taxation) Mandatory Social Security Contributions Employer: - 17.4% Employee: - 12.9% Maximum monthly taxable base - BGN 2,000. This must be done in 3 month period after the purchase date. Everybody who set up a company for the purpose to buy real estate in Bulgaria ( house, land, apartments, etc) have to declare annual company tax reports every year. Capital Gains: The sale of real estate by nonresidents in Bulgaria is subject to 10% withholding tax on the net gains received. Verila 5 1463 Sofia, Bulgarien Tel: (+359) 2 868 45 99 E-Mail: office@ruskov-law.eu The cheap Bulgarian property market attracts many investors from all over the world. The Bulgarian Constitution does not allow foreign individuals to acquire land until 2012. In total the employee pays 12.9% and the employer contributes what corresponds to 17.9%. A non-Bulgarian resident can (i) become professionally active in Bulgaria and (ii) receive a (high) salary from a Bulgarian company as a compensation for these activities. Once the local Tax services have the property declaration they can calculate your annual taxes and waste collection fees. Annual company accounts and tax returns for Bulgarian Ltd. 27.03.2017. Historically Bulgaria property sales included the common practice of under-declaring the actual value of a property on the title deed in order for both the seller and the buyer to save on property taxes. If the tenant is a Bulgarian company, the tenant withholds tax @ 10% from gross rents with no deduction for costs. If you work as an employee with only a labor contract, you are not required to submit a tax return. The withholding tax is levied on the gross amount of the rental income and no expenses can be deducted. The buying process varies in Bulgaria depending on whether you buy an apartment or a landed property. Back to Our Services, Non-residents are taxed in Bulgaria on income arising from Bulgarian sources only. To get around this investors wanting to buy a house or villa must first set up a Bulgarian registered company. You are considered tax resident in Bulgaria if you spend at least 183 days there per year or if your main resident home is located in Bulgaria. Brief information on taxation is provided within the Living in Bulgaria guide. These assumptions are critical. These assumptions are critical. If the tenant is a Bulgarian company, the tenant w ithholds tax @ 10% from gross rents with no deduction for costs. Everybody who set up a company for the purpose to buy real estate in Bulgaria ( house, land, apartments, etc) have to declare... 25.10.2016 Bulgaria- one of the most preferable destinations to buy holiday residential property A double taxation agreement exists between Bulgaria and Ireland / UK. Bulgarian residents in the US: Bulgarian citizens working in the United States must comply with the appropriate visa requirements, labour and tax laws. The value of deceased’s property is defined in the local currency, Bulgarian Leva (BGN), in the following manner: You will also be obliged to file a tax return detailing your worldwide income in your home (tax resident) country. Ongoing property taxes: Bulgarian Capital Gains Tax : For non-residents, withholding tax of 10% is deducted from Income derived from the sale or exchange of property – this is determined as 90% of the difference (if positive) between the selling price and the acquisition cost. The basis tax value deserves special attention. Bulgarian properties for sale. Bulgaria also levies the lowest flat personal income tax rate of 10%. To get around this investors wanting to buy a house or villa must first set up a Bulgarian registered company. It sounds back to front, but this applies to a lot of things in Bulgaria. Some rural properties are billed as little as 15 Euros / year, other regular size Sofia apartments will typically be 150 Euros / year. Bulgarian companies are required to withhold tax on payments of dividends and liquidation proceeds; interest (including that incurred under finance lease agreements and on bank deposits); royalties; fees for technical services; payments for the use of properties; payments made under operating leasing, franchising, and factoring agreements; and management fees payable to non-residents. 1. A foreign domiciled person is subject to inheritance tax only on property … Annual company accounts and tax returns for Bulgarian Ltd. 27.03.2017. Bulgarian Property Taxes. Selling your Bulgarian property Selling your house, land or apartment is a very important action, particularly if it is owned by a domestic registered limited liability company in your name. Explanation and practical tips. Currently foreign ownership of land is not possible in Bulgaria although this is set to change in 2014. Every owner of a building or a plot is obliged to pay annual property tax. Heirs at law or by will are required to pay inheritance tax except from the surviving spouse and heirs in direct line. BULGARIAN PROPERTIES™, BULGARIANPROPERTIES.COM™ and the logos are trade marks of Bulgarian Properties Ltd., registered in Bulgaria under VAT#BG131164582 with address: 22, Zlaten Rog Str., Sofia 1407, Bulgaria. Otherwise you will be charged with a penalty fee. Due to the Integrated Information System for Cadastre and Property Registration (IKAR, founded in 2008) all information on Bulgarian properties are publicly available on the website of the Land Registry Agency. As we told the income tax rate is 10% and you have to submit an annual tax return. These are different in value and depend on the size of populated area and its situation in the country, the neighborhood, the sq. m area they are 30 in total. These laws affected commerce, foreign investments, insurance companies, tax collecting, banking, and more. Bulgaria-domiciled individuals are subject to inheritance tax on inherited property both located in Bulgaria and abroad. Invest in property which he purchases as an individual. Property tax covers the cost of registering the title deeds with the municipality and is equal to 0.15 per cent of the purchase price. In a small town (like Karnobat town) for a house, 65 sq. For example the annual property taxes and the annual garbage taxes for a property in a big Bulgarian city or in a resort area are 50-70 EUR. If you are resident in Ireland or the UK, you will be obliged to declare and file your Bulgarian income in Ireland/ UK also. Once you purchase a property in Bulgaria you have to declare it in the local Tax services. It provides some information on its website in English. As part of the Nyama Problemi Ltd group of sites, it was determined a real need for a property repair service covering the smaller repairs. Obtaining a Bulgarian ID card is a precondition to be granted tax residence of Bulgaria. Bulgarian inheritance tax is levied on property exceeding BGN 250,000 (approximately EUR 125,000) and amounts to 0.7% for property inherited by brothers, sisters and their descendants, and 5% - for other heirs.] Depending on the type of tenant, the tax is paid in different ways: This system has the information structured on two sections, depending on its user: an administrative section and one customer section. According to officials taxes on farm land will revitalize the market for this type of estates. For example the annual property taxes and the annual garbage taxes for a property in a big Bulgarian city or in a resort area are 50-70 EUR. Law firm Ruskov & Kollegen ul. For more details see the Data FAQ The request for issuing this paper could be submitted only by the owner of the property or his legal attorney. Transactions with the underlying plots of the buildings are subject to the same rules. You submit a standard form along with a copy of your notary deed. 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