Local Tax on Property Purchase: Who Pays It and How It Is Calculated
When you buy a property in Bulgaria, a local tax on the acquisition of property is due. Its rate is set by each municipality within limits laid down by law, and the tax base depends on the price and the tax assessment.
Property Guide •Published: 28 October 2026 •Updated: 30 October 2026 •Reading time: 4 min read •Views: 20
What the tax is
The tax on the acquisition of property is a local tax regulated by the Local Taxes and Fees Act (LTFA). It applies to property acquired by donation, as well as to real estate and limited property rights over it acquired for consideration (Art. 44, para. 1 LTFA). In other words, every ordinary purchase of an apartment, house or plot of land falls within its scope.
The tax is paid in the municipality where the property is located (Art. 49, para. 1 LTFA), and at the time of the transfer (Art. 49, para. 2). The amount therefore needs to be calculated and ready by the day of signing.
Who pays
By law, the tax is paid by the acquirer, that is, the buyer, unless the parties have agreed otherwise (Art. 45, para. 1 LTFA). If it is agreed that the tax is owed by both parties, they are jointly and severally liable. If it is agreed that the seller will pay it, the buyer acts as guarantor.
When the buyer is located abroad, the seller is liable for the tax (Art. 45, para. 2 LTFA). The rule depends on where the acquirer is located, not on their citizenship. It is therefore a good idea to describe the allocation of costs clearly in the preliminary contract.
What amount it is charged on
The tax base is the valuation of the property in euro at the time of the transfer (Art. 46, para. 1 LTFA). For real estate, it is the agreed price, or, if that is lower than the tax assessment, the tax assessment under Annex No. 2 to the act (Art. 46, para. 2, item 1).
The tax assessment is certified by a certificate issued by the municipality. According to the Registry Agency, it is valid until 30 June or until the end of the calendar year if the taxes for the whole year have been paid.
What the rate is
For acquisition for consideration, the tax is set by the municipal council at 0.1 to 3 percent of the valuation of the transferred property, and in the case of an exchange, of the valuation of the property with the higher value (Art. 47, para. 2 LTFA). Each municipality adopts the specific percentage in its local taxes ordinance, so it may differ in Sofia, Varna or a small municipality.
For donations the rates are different: 0.4 to 0.8 percent between siblings and their children, and 3.3 to 6.6 percent between persons outside that circle (Art. 47, para. 1 LTFA). Donations between relatives in the direct line and between spouses are not taxed (Art. 44, para. 6 LTFA), and the law also provides for other exemptions, for example for property acquired by the state and municipalities (Art. 48).
An example with hypothetical figures
Suppose you are buying an apartment for 150,000 euro, its tax assessment is 90,000 euro, and the municipal council has set a rate of 2.5 percent. The price is higher than the tax assessment, so the base is 150,000 euro and the tax is 3,750 euro.
If in the same example the agreed price were 80,000 euro, that is, lower than the tax assessment, the base would be the tax assessment of 90,000 euro and the tax would be 2,250 euro. The rate in the example is only an illustration – check the current percentage in your municipality's ordinance.
After the purchase: the annual tax
The purchase is not your last payment to the municipality. As an owner, you owe an annual tax on real estate, the rate of which the municipal council sets within limits of 0.1 to 4.5 per mille of the tax assessment (Art. 22 LTFA), as well as a household waste fee. The rates are adopted by the municipal council and may change, so check the current ordinance every year.
- Check the rates in the local taxes ordinance of the municipality where the property is located.
- Agree in writing who pays the tax, especially if the buyer is abroad.
- Request the tax assessment certificate in good time, because it is part of the documents submitted at the transaction.
- Keep the document for the tax paid together with the notarial deed.
Sources
- Local Taxes and Fees Act (Art. 22, 44–49) – Ministry of Finance
- Registry Agency – How to register a deed for real estate
This article is not legal or tax advice. The information is general and current as of the publication date; check the specific rate with the municipality where the property is located.
