1. Law firm Ruskov & Kollegen ul. There are usually two property taxes to be paid: property tax and garbage collection (which is optional), which are paid at the local municipality. Transfer tax – Transfer tax is imposed on the sale or exchange of immovable property and motor vehicles, at rates ranging from 0.1% to 3%, determined by the municipality. Law firm Ruskov & Kollegen ul. If the tenant is a Bulgarian company, the tenant withholds tax @ 10% from gross rents with no deduction for costs. ... Bulgarian Property Insurance. Bulgarian inheritance tax is levied on property exceeding BGN 250,000 (approximately EUR 125,000) and amounts to 0.7% for property inherited by brothers, sisters and their descendants, and 5% - for other heirs.] Professionals in Bulgarian Property Sales for Irish and British Investors We have been successfully representing Irish and British investors to Buy, Sell and Manage their properties in Bulgaria for over twelve years. 20% of the income is regarded as non-taxable. The governing legislation in Bulgaria regulating the legal aspects of the subject is the Bulgarian Inheritance Act (Bulgarian: Закон за наследството). Property tax covers the cost of registering the title deeds with the municipality and is equal to 0.15 per cent of the purchase price. On local level property taxes as well as various fees are collected. In a small town (like Karnobat town) for a house, 65 sq. If you want to know more or withdraw your consent toall or some of the cookies, please refer to the Privacy Policy, Buying a quality property preserves the capital, Obligations for Companies without activity in Bulgaria 2018, Bewitched by Bulgaria's Rhodopes mountains. An annual return is due by 31 March following the relevant tax year end. If the real estate and/or the movable property are owned by more than one person, the income is divided in proportion to the participation in the ownership. As we told the income tax rate is 10% and you have to submit an annual tax return. Once you have established a Bulgarian company, you have to do an annual company tax reports and declaration. The tax amount varies from 0.10% to 0.15% of the tax evaluation price of the property. Invest in property which he purchases as an individual. A foreign domiciled person is subject to inheritance tax only on property … Income tax on individuals is 10%. The rule of thumb: sell one property per year tax free. The fine is also very small. There is a double taxation agreement between the Bulgaria and Ireland / the UK so relief for certain Bulgarian taxes will be given against Irish/ UK taxes payable on your Bulgarian income. Depending on the type of tenant, the tax is paid in different ways: Withholding tax is levied on: Any dividends and shares in a liquidation surplus, as distributed (apportioned) by any resident legal person in favour of: Verila 5 1463 Sofia, Bulgarien Tel: (+359) 2 868 45 99 E-Mail: office@ruskov-law.eu Everybody who set up a company for the purpose to buy real estate in Bulgaria ( house, land, apartments, etc) have to declare annual company tax reports every year. The last time the basis tax value was recalculated was in 2002.This makes Bulgaria the country with lowest property tax in the whole European Union. Every owner of a building or a plot is obliged to pay annual property tax. Heirs at law or by will are required to pay inheritance tax except from the surviving spouse and heirs in direct line. These have no reason to be expensive whilst still effective. Once you have established a Bulgarian company, you have to do an annual company tax reports and declaration. This must be done in 3 month period after the purchase date. This system has the information structured on two sections, depending on its user: an administrative section and one customer section. Selling Bulgarian property involves a variety of bureaucratic procedures that must be followed to enable the vendor to legally complete the transfer of the ownership to any new owner. Due to the Integrated Information System for Cadastre and Property Registration (IKAR, founded in 2008) all information on Bulgarian properties are publicly available on the website of the Land Registry Agency. The rate on capital gains from securities is equal to one half of the applicable rate as per the national legislations of Bulgaria and Israel. footage and the floor, the year and the type of the construction, extras in the interiors etc. The most common mistakes made when buying a property in Bulgaria can be summarized as: Paying a deposit to reserve a property. Inheritance law regulates the financial consequences that arise as a result of the death of individuals, as well as the subsequent transfer of their assets. You will also be obliged to file a tax return detailing your worldwide income in your home (tax resident) country. Should You Buy Or Build A House In Bulgaria. Specific tax planning advice to your circumstances should be sought. The exact percentage depends on the local Municipality. If the tenant is a Bulgarian company, the tenant w ithholds tax @ 10% from gross rents with no deduction for costs. In total the employee pays 12.9% and the employer contributes what corresponds to 17.9%. For more details see the Data FAQ If you buy a property with land in Bulgaria, you must form a limited company and pay corporation tax. The property was worth US$250,000 or 250,000 at purchase. Every owner is liable to pay annual municipal property tax to the government. The rule of thumb: sell one property per year tax free. Option to pay per Job or time spent. Ongoing property taxes: Notary Public’s Fees. The withholding tax regime is regulated in Articles 194-203 of the Corporate Income Tax Act. According to the Bulgarian legislation you can claim Bulgarian tax residency if 1. Currently foreign ownership of land is not possible in Bulgaria although this is set to change in 2014. You are considered tax resident in Bulgaria if you spend at least 183 days there per year or if your main resident home is located in Bulgaria. Ongoing property taxes: Bulgarian Income Tax: For non-resident individuals, the applicable tax on rental income will depend on whether the tenant is an individual or a company. Other – Insurance contracts covering risks in Bulgaria are subject to a 2% tax … For a solid house, 90 sq.m area in the Super Center Zone in Bourgas the annual real property tax is around 55 BGN and the waste collection fee is 60 BGN. Additionally, in 1997 the government of Bulgaria began paying closer attention to the transactions of foreign companies who were doing business within Bulgaria. To obtain Bulgarian tax residency you are not required to stay for 183 days in Bulgaria. You must do it if you are freelancer or work both like employee and freelancer. Bulgaria-domiciled individuals are subject to inheritance tax on inherited property both located in Bulgaria and abroad. The buying process varies in Bulgaria depending on whether you buy an apartment or a landed property. The taxable base for Bulgarian inheritance tax is equal to the value of the inherited property (e.g., an apartment, shares of a company, and a car). How to Buy Property in Bulgaria, the Safe Way The most common mistakes when buying real estate in Bulgaria. The property was worth US$250,000 or 250,000 at purchase. 2) during the Bulgarian tax year the person sells not more than one residential property regardless of the date of its acquisition; 3) during the Bulgarian tax year the person sells not more than two properties, if they have been owned for more than 5 years. Bulgaria-domiciled individuals are subject to inheritance tax on inherited property both located in Bulgaria and abroad. Annual company accounts and tax returns for Bulgarian Ltd. 27.03.2017. Change in any of those parameters leads to change in the tax evaluation price. Homestead Exemption is a savings allowed for those property owners who own and live at their primary residence. For a flat in a quarter in Bourgas with 45 sq. That is why it is extremely difficult to keep up to day with market values. Valid Tax Evaluation Document - This paper is issued by the Local Tax services Office in the Municipality where your property is located. As part of the Nyama Problemi Ltd group of sites, it was determined a real need for a property repair service covering the smaller repairs. If a building is built on a State or municipal plot, the value of the plot will also be included in the tax base. Done this way, there is no Capital Gains tax to pay. The flipside is that Bulgarian property is now remarkably affordable and probably appropriately priced. This transliterates to danŭk kŭshta. Bulgarian Corporate Tax 2. Properties that sold for €80,000 10 years ago are widely available now for €25,000. Bulgarian Income Tax : For non-resident individuals, the applicable tax on rental income will depend on whether the tenant is an individual or a company. The tax evaluation price is calculated with a formula that includes a basis tax value per sq m and correctional coefficients for location, quality of infrastructure, individual characteristic, height and age of the property. Bulgaria also levies the lowest flat personal income tax rate of 10%. According to officials taxes on farm land will revitalize the market for this type of estates. If you sell a property in Bulgaria and you have a switched-on agent, it should be declared as your single and sole Bulgarian residence. Moreover it will make owners of small plots sell or re-allot with others. If you sell a property in Bulgaria and you have a switched-on agent, it should be declared as your single and sole Bulgarian residence. All income earned in Bulgaria is taxed on a flat rate of 10%. Heirs at law or by will are required to pay inheritance tax except from the surviving spouse and heirs in direct line. It is not their sole or principal residence. These assumptions are critical. The basis tax value deserves special attention. The income tax is regulated by the Bulgarian personal income tax law. use (also known as Act 16) has been issued prior to 60 months are exempt, unless the seller opts out to treat them as VATable. Fraud A foreign domiciled person is subject to inheritance tax only on property … The agency was founded in 2002 by Bulgarian property experts Nic Stoyanov and Orlin Orestov. If you work as an employee with only a labor contract, you are not required to submit a tax return. Our skill set covers all areas of work from Electrics to Bathrooms and roof repairs. Becoming a Bulgaria Tax Resident, you can benefit from the lowest tax rates in the entire European Union. While this may appear more tax efficient than if the property was purchased in an individual's own name, consideration must be given to the treatment of gains in a Bulgarian company and more significant the extraction of any profits or gain from the company which could be taxed in your home country at income tax rates eg 41% (Ireland) rather than capital gains tax at 20% (Ireland). Bulgaria levies a real property tax of between 0.01% and 0.45% on the tax value of the property. There is an inheritance and gift tax of between 0.4% and 6.6%, depending on the relationship of the beneficiary. Changes in the law are vividly discussed in order to have small taxes on agricultural land but still nothing is publicly accepted. Certain exemptions apply, among them that profits of CFCs with substantive economic activity will not be subject to Bulgarian tax. It provides some information on its website in English. Option one above is valid only if an apartment or a house is bought without the land. 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