Legal and Taxation Support

Below, we have summarized basic legal and taxation information on real estate and land  purchase in Bulgaria. For additional details, please consult your independent legal adviser or contact us and we will be delighted to assist you. 

• Legal Information

The Bulgarian Construction and the Foreign Investment Act provide national treatment to foreign investors, which means that foreign persons are entitled to perform business activities under the same conditions as Bulgarian citizens.
Foreign investments in Bulgaria are covered by legal and international guarantees, except minor additional requirements for land purchases as explained below .Each contract will be assigned a registration number, which can be referenced for any inquiries of proof of ownership.

Legal requirements for real estate purchases in Bulgaria in case the buyer is a foreign person /individual or company/:

Purchase of land:
Foreign companies and citizens can buy land in Bulgaria only through a Trade Company formed in Bulgaria. The company will buy the land, and on the other side the same company might be 100% owned by the respective foreign person. Bulgarian participation in the company is not necessary at all. The owner of the company can be its manager as well. Land purchase in Bulgaria is free of VAT.

Foreign companies and citizens can buy buildings and objects in buildings without any restrictions.

What is the stage in the process when the investor becomes official owner of the respective property?

The buyer becomes the official owner of the property in the moment, when the final purchase contract in special notary’s form is concluded. The contract /title deeds/ is prepared by a solicitor and certified via a notary. After the signing of the contract in front of the notary it has to be filled in the special property register in the local Regional court / the register is similar of the cadastre register in some west European countries/.

• Taxation information

Taxation in accordance with the real estate ownership
The taxation of real estate assets is 0.15% of their tax valuation per year. The valuation is in accordance with addendum No 2 of the Law for the local taxes and fees.
Additionally, the owners of real estate properties have a rubbish collection fee which is different depending on the local regulations of each region. The fee is defined every year by the municipality’s council.

Transfer abroad the incomes, realized in Bulgaria
Foreign investors can repatriate their profit realized in Bulgaria without any restrictions after they prove that all due taxes regarding their incomes in Bulgaria
Have been paid.

Taxation of individuals
The taxation of the annual incomes of the individuals in Bulgaria is in accordance with the following progressive table:

Annual income taxation

• Till 1440 BGN free of taxes
• From 1440 BGN. to 1800 BGN. 12 % for the income over 1440 BGN
• From 1800 BGN to 3000 BGN. 43,20 BGN + 22 % for the income over 1800 BGN
• From 3000 BGN. to 7200 BGN. 307,20 BGN + 26% for the income over 3000 BGN
• Over 7200 BGN. 1399,20 BGN + 29 % for the income over 7200 BGN

The dividends accounted from Bulgarian companies in benefit of the shareholders in the respective company will be taxed with final tax which is always in amount of 15%. These incomes, will not be included in the total income described in the table above.

Corporate taxation
The companies pay corporate tax in the amount of 19.5% of the net income for the respective year / on annual basis/.