Bulgaria proposes phased increase in property tax assessments through 2029

Bulgaria is proposing a phased increase in property tax assessments, aiming for a total increase of approximately 118% by 2029. The Ministry of Finance's plan involves three steps: a 30% increase next year, followed by 35% increases in each of the subsequent two years.

The reform introduces higher valuations for specific property improvements, including swimming pools, sports courts, luxury flooring, fences, and public parking spaces. For example, luxury permanent flooring could increase assessments by up to 35.79 euros per square meter by 2029. While assessments are rising, the actual property tax impact depends on municipal councils, which have the authority to adjust tax rates between 0.1 and 4.5 per mille to mitigate the effect.

In cities like Varna, experts suggest these changes may not significantly shift market prices, as tax assessments often remain much lower than real market values. However, the increase could impact owners of multiple properties or unused “dark homes,” potentially prompting them to renovate, rent, or sell. Additionally, the changes affect real estate transactions, as acquisition taxes are calculated based on the higher of the sale price or the tax assessment. New rules also require sellers of new buildings or regulated land to register for VAT before a transaction.