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Local Taxes Local Taxes

Local taxes in Bulgaria are regulated by the Local Taxes and Fees Act and the most important is the Immovable Property Tax, Transfer Taxes and Inheritance tax.

 

Immovable Property Tax

In Bulgaria this tax relates to owning immovable property. Immovable property tax is levied on buildings and plots of land. Some immovable property, such as agricultural land and forest land are not subject to this tax.

The tax liable persons in Bulgaria are the owners or the holders of limited real rights over immovable property. The tax rate is 0.15 percent of the tax valuation.

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 residence by a person with reduced working capacity. 

 

Transfer taxes

This kind of tax in Bulgaria 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 and motor vehicles, registered in Bulgaria.

The tax rate for acquisition against payment is determined by every municipality in Bulgaria independently in the amount between 1.3 % to 2.6 %. The tax base is defined as the higher of: (i) the tax valuation; or (ii) the sale price for immovable properties and the insurance valuation - for motor vehicles.

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

  1. 0.4 % to 0.8 % on donations between brothers and sisters and their children
  2. 3.3 % to 6.6% on donations in other cases

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

 

Inheritance tax

Inheritance tax in Bulgaria shall be levied in relation to:

  1. the properties of Bulgarian citizens in the country or abroad, inherited by law or will
  2. the properties of foreign citizens in Bulgaria inherited by law or will

Inheritance tax shall be paid by the heirs by law or will. Inheritance tax shall not be paid by the surviving spouse and by lineal heirs without restriction.

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

  1. 0.4 % to 0.8 % for a hereditary share in the amount over 250,000 Bulgarian levs - for brothers and sisters and their children
  2. 3.3 % to 6.6% for a hereditary share in the amount over 250,000 Bulgarian levs - in other cases.

Call us on 00359 2 4432519 for a VAT advise or e-mail to tax@intrapartners.net.

Intra Partners Accountancy, the Accountants for Tax Advice.