Registering Bulgarian real estate at the tax office. Payment of annual council property taxes and tax debts towards the local municipality.

Edited 27.03.2015

Real estate buyers – foreign individuals probably know that they should obtain tax id (Bulstat) and declare newly bought real estate at the local Tax Authorities not later than 2 months after signing the Title Deed. So the regular payment of the annual council taxes for property owned in Bulgaria can follow. Tax registration of the individual and their property is something every real estate owner has to take care of once they’ve acquired ownership. Subject of council property taxes are apartments, houses/villas and regulated plots within the borders of towns/villages. Liable to pay these annual property taxes are their registered legal owners – private individuals and corporate bodies. Even if ownership has been acquired in the name of registered local company, there is also obligation for payment of the annual council property taxes. These taxes in their nature are the same as the annual council estate taxes applicable everywhere and it represents a regular tax payment to the local municipality/district when owning real estate in the area. The precise amount of the annual property tax in Bulgaria, as established by the local Act for local taxes and charges, depends of several criteria, including, but not only how much is the area of the property, where the property is situated and what are its surroundings, how old is the building, etc.

Registration of your property at the local Tax Authority is also a necessary condition which legally enables you one day to re-sell it, where lack of any tax liabilities is required (check also our section – real estate selling). Correct payment on time of annual property taxes towards the local municipality, if made until1st of April, receives 5% discount given by the Municipality.

Non-payment of the annual council taxes in Bulgaria especially by corporate bodies, may lead to execution procedures initiated by the Municipality, before the local bailiff. Many foreign owners have contacted us since they have experienced troubles on this matter and received writs of execution by the bailiff on their company registration address. So if you are a foreign real estate investor, who has purchased a property in Bulgaria in the name of your own local company, but you have rarely or never visited your property, neither having direct contact with the local address of registration of your company, then please ensure you have properly paid the annual council taxes for your property towards the Municipality.

We agree that sometimes it may be difficult for overseas property owners who do not live permanently in Bulgaria, to register their purchased real estates and to deal with payment the council taxes every year on their own, as they have to follow deadlines and to check annually at the tax authority the amount of the tax, to arrange cash or wire payments, to keep records of the paid by them taxes, etc. So what we offer is to check tax debts and perform a correct payment on time on behalf of the property owner the annual council taxes due for their real estates for the taxable year. We can collect, fill in the needed documents and register on your behalf your property at the local tax authorities. At the end of the process, we forward to the client proper receipt for the above paid by us taxes. If you need help with the above matters, do not hesitate to contact us and to get a quotation and guidance.

*Note that the annual council property taxes due to the local municipality have no relation or equality with any maintenance fees payable to private maintenance companies which take care of common parts of complexes/facilities; they have different origins.

Differences between
* The annual council property tax and
* The annual maintenance fee.

Holiday or residential apartments in Bulgarian resorts are still attractive for foreign property, and as the number of these newly built increased a lot in the last 7-8 years, the ownership of apartment because a huge part of the Bulgarian real estate pot. Along with the aspects of the good investment made, the apartment owners met several new and unknown for them obligations in relation to the owned by them properties. These are on one hand, the annual council property tax, and on the other, the annual maintenance fee. We have had many questions by members, asking if these are one and the same debt; but these are not. Also we have had many requests for help by owners of local companies, which have been chased by the Taxmen for non-paid real estate taxes. On the other hand, there are many apartment owners, who contacted us because been illegally chased by maintenance companies for their fee in particular situations where it is not due according to provisions in our legislation.
This is why we will try to outline below in an understandable way the differences between these two legal terms in Bulgaria, according to our legislation:

1) The annual council property tax is legal obligation by a property owner towards the local Taxmen. It is imposed by the local Municipality, when you own on apartments, houses and regulated plots of land within its territory.
- On the other hand, the maintenance fee is (annual) contractual fee, which the apartment owner pays to private local company which maintains the common parts of the building, where the apartment is situated. This type of voluntary agreed maintenance fee between the owner and the maintenance company, does not relate to the apartment itself, but only to the related to it common parts of the building.
2) BASE: To create an obligation for payment of annual property tax, there must be a real estate bought and declared at the Authorities in your name, via your BULSTAT number.
- On the opposite, to raise obligation for payment of maintenance fee, there should be a maintenance contract signed between you and the maintenance company; or
- Alternatively a decision by the General Meeting,
3) Annual council property tax is payable directly to the local Municipality against receipt.
- On the other hand, the annual maintenance fee is payable towards the maintenance company against receipt, or in cases where there acts General Meeting - only towards the bank account of the General Meeting (not directly to the maintenance company).
4) For non-payment of due annual council tax, the local Municipality will chase you via the public bailiff, where seizing your assets and taking it to a public auction. Practice shows this is valid especially for corporate bodies which own real estates (lands mostly) but do not pay on time their annual property taxes.
- On the opposite, non-payment of your agreed contractual maintenance fee may lead to civil liability, pursued at local civil court by the maintenance company.

So, considering the above, if you believe that:
1) You have not declared properly your Bulgarian real estate after your property purchase, or
2) You are missing your BULSTAT number,
3) You have not paid the annual council property taxes up to present moment, or
4) You are experiencing problems in relation to the maintenance of your complex, then we can help you. Contact us