Real estate transaction costs and taxes in Bulgaria

Cost

Variable depending on the particular municipality.

VAT

Nil

Cost

N/A

VAT

Nil

Cost

Online database search of Land Registry is BGN 1 or EUR 0.50 per single search; Encumbrance certificate´s price depends on: the criteria set for search and the term the encumbrance certificate will be issued for and vary from BGN 5 (approx. EUR 2.5) to BGN 30 (approx. EUR 15); Land Registry search made in the Real Estate Registry office is BGN 2 (approx. EUR 1) and for the documents issued additionally BGN 1 (approx. EUR 0.5) for the first page and BGN 0.1 (EUR 0.05) for the next pages.

Obtaining copies of relevant documents online costs BGN 2,50 (EUR 1,25)

VAT

Nil

Cost

No charge is collected for online search. An official excerpt of the Commercial Registry is EUR 2.50 for the first page and EUR 1 per each subsequent page.

Obtaining copies of relevant documents online costs BGN 2,50 (EUR 1,25) for the first page and BGN 1,50 (EUR 0,75) for subsequent pages

VAT

Nil

Cost

Survey: negotiable
Valuation: negotiable, usually starting from EUR 130 and depending on the area.

VAT

20%

Cost

Negotiable

VAT

20%

Cost

VAT exempt are transfers of ownership that are not “new” (i.e. put into operation for more than five years) however, the transferrer has the option to charge 20% VAT.

VAT

Nil or 20%

Cost

Each municipality determines the amount of the transfer tax in the beginning of each calendar year. The amount of the transfer tax could vary between 0.1% to 3% of the property’s purchase price or tax assessment, whichever is higher.

Transfer of shares in a limited liability company requires notarization of the parties’ signatures and the content of the agreement. The notary fees are capped at EUR 3.000. Transfer of shares in a joint-stock company or a limited liability company may trigger Commercial Registry fee (approx. EUR 12.5) and/or Depositary Registry fee (depending on circumstances, min. EUR 25 plus 20% VAT). As of 1 October 2015 Bulgaria has started to levy penalties on certain corporate entities possessing agricultural land plots. Affected entities are those non-EU/EEA which: (i) have direct or indirect corporate shareholders registered in tax havens, or (ii) have non-EU/EAA shareholders, unless resident in jurisdiction with which Bulgaria applies a special bilateral treaty allowing possession of land; or (iii) joint stock companies issuing bearer shares. Penalties are: initial penalty of EUR 50 per decree, and EUR 150 per decree for each following calendar quarter until disposal of the land. Under the Off-shore Companies Act, entities registered in tax haven jurisdictions and their related parties (including direct or indirect Bulgarian based subsidiaries) should register in a exertions apply – e.g. in case the entities shares are traded on a EU/ EEA regulated stock exchange, or company is part of a group having an EU/Double tax treaty justification based Holding Company. Failing to register renders acquisition of land void without right to claim back purchase price /damages and declaring untrue evidence to apply exception from the restrictive regime, triggers penalties ranging from EUR 25,000 to EUR 500,000.

Capital gains of companies:

• residents – included in the taxable profit, which is subject to 10% corporate income tax;
• non-resident – subject to 10% final tax, if not attributable to a permanent establishment in Bulgaria

Capital gains of individuals:

• residents – included in the aggregate taxable income, subject to 10% personal income tax; 10% allowance is deductible from the gain;
• non-residents – subject to 10% final tax; 10% allowance is deductible from the gain;
• gains from the sale/exchange received by EU/EEA residents in a calendar year are exempt for (i) one residential property, if three years passed from acquisition, and (ii) up to two immovable properties, and/or agricultural and forest properties irrespective of their number, if more than five years passed from acquisition.

Capital gains of companies:

• residents – included in the taxable profit, which is subject to 10% corporate income tax;
• non-resident – subject to 10% final tax, if not attributable to a permanent establishment in Bulgaria; Capital gains of individuals:
• residents – included in the aggregate taxable income, subject to 10% personal income tax; possible deduction of capital losses;
• non-residents – subject to 10% final tax

Capital gains realized on regulated stock markets in EEA are exempt.