Buying a property in Bulgaria is a wise and strategically correct decision. If you have already done this we are sure that you can already see and feel the benefits of this purchase. What you should remember, though, is that you have a whole pile of different obligations and requirements that you need to meet in order to be compliant with the local authorities. In this section you will be able to find an useful list of your main obligations that you need to take into serious consideration. We realise that this may seem con fusing and even frightening (especially to foreigners), but do not worry for a thing! This is what we do, this is what we are good at and this is what hundreds of property owners just like you have already entrusted to us!
Income Tax on rents for non-resident landlord shall be subject to 10% withholding tax on gross rents. According to the law no deductions are allowed for the costs incurred.
Corporate Income Tax shall be payable if property is purchased through a company and is calculated as 10% on the company profits. Full deductions will be given for eligible costs incurred in connection with the property. A corporate income tax return must be filed every year even in cases where a Nil return has occurred!
Capital Gains Tax is payable on any increase in value since acquisition – 10%. The gain is calculated on the difference between the sale price and the higher of the tax estimation and the price of ac quisition (Notary Deeds), corrected by an inflation index. According to the law no Bulgarian CGT shall be owed if property is held for more than 5 years.
Inheritance Tax is payable by non-resident beneficiaries on certain transferred assets. The tax rate depends on the relationship between the parties and the size of the inheritance. The lineal heirs are completely exempt from this tax. For all other beneficiaries the tax rate will apply only on property with tax evaluation above €125,000. Brothers and sisters pay 0.7% Bulgarian IHT on the amount above €125,000; any other person pays 5%.