Bulgaria to implement phased property tax assessment increases

The Bulgarian government is preparing a series of tax reforms that include a phased increase in property tax assessments starting January 1, 2027. According to Silvia Georgieva, Executive Director of the National Association of Municipalities, assessments could rise by up to 30% in the first year. She noted that while the state determines the assessment updates, local municipal councils retain the authority to set the exact tax rate paid by citizens.

Experts suggest the increase will be implemented gradually over three years: an initial 30% jump, followed by a 25% increase in the second year, and a 35% increase in the third. This measure aims to address outdated assessment formulas that currently fall far below real market prices. The impact is expected to vary between major cities like Sofia and smaller villages, where many properties currently sit near the tax-exempt minimum.

In addition to property tax changes, the Ministry of Finance is considering new taxes on banking profits. Tax expert Plamen Donev noted that while such measures might affect borrowing costs, they could serve as a necessary market correction for an overheated real estate sector. Currently, the tax burden on banks in Bulgaria is significantly lower than in other economic sectors.