On 4 November 2026 Bulgaria's Council of Ministers approved the bill amending the Local Taxes and Fees Act, together with changes to several other tax laws. It is the next step in a story we have followed since the summer — most recently in our 1 October article on the Finance Ministry's published draft.
In short: the government has kept the timetable from the draft. The law has not been passed yet, though — it still has to go through the National Assembly.
According to the government's announcement, property tax valuations are updated in three consecutive years:
The update covers buildings, land, improvements and agricultural land.
In the draft published for consultation on 23 September, the steps are written as coefficients applied to today's valuation — 1.3 for 2027, 1.65 for 2028 and 2 for 2029. In other words the steps add up rather than compound: by 2029 the valuation is double today's. The approved version follows the same logic.
Some media also quoted a figure of "about 118%". It cannot be derived from the coefficients in the published draft, so we have not used it. We will check the exact wording once the bill is filed in Parliament.
The tax valuation is the base. The tax itself also depends on the rate, which each municipal council sets between 0.1 and 4.5 per mille of the valuation. A higher valuation therefore does not automatically mean the same rise in the tax — municipalities can adjust their rates.
If the rate stays the same, the arithmetic is simple. An illustrative example with a valuation of €40,000 today and a rate of 2 per mille:
| Year | Tax valuation | Tax at 2‰ |
|---|---|---|
| 2026 | €40,000 | €80 |
| 2027 | €52,000 | €104 |
| 2028 | €66,000 | €132 |
| 2029 | €80,000 | €160 |
Indicative only; it ignores the early-payment discount and any change in rates.
Two details from the September draft matter to owners: the household waste fee was expressly shielded from the increase, and the 2027 tax was to be notified by 30 April, with a 5% discount for payment by 31 May. The government's 4 November announcement does not mention either — we will confirm whether they survive in the final text. How the tax and the waste fee work today is explained in our guide to property tax and the waste fee.
On an ordinary sale, the local transfer tax and the notary fee are calculated on the higher of the agreed price and the tax valuation. For most market transactions in the big cities the price will remain above the valuation even after 2029, so transaction costs will not change much.
The effect is more noticeable on gifts, inheritance and transfers between relatives, where the valuation is often the only base. If you are planning such a transfer, it makes sense to know which year falls under which valuation. You can estimate the costs with our notary fee calculator.
The cabinet also approved the VAT Act amendments. Sellers of new buildings and regulated plots will have to register for VAT before the first supply — the measure we described in our 25 September article. The aim is to stop quick resales structured to stay just under the registration threshold.
The general VAT registration threshold has changed from the original draft. Instead of jumping straight to €75,000 in 2027, it will rise in stages: €60,000 in 2027, €70,000 in 2028 and €75,000 in 2029.
Other approved changes to the Local Taxes and Fees Act: the provisions on patent tax for companies in catering and entertainment are repealed (after a European Commission opinion that they amounted to state aid), and fines and penalties are updated.
The proposals will be filed in the National Assembly as part of the 2027 budget package. There the bill goes through two readings and can still be amended — including the steps, the deadlines and the waste-fee protection. We will update this once the law is passed.
General information, not tax advice. Based on announcements of 4 November 2026 and the draft of 23 September 2026, verified 5 November 2026. The bill may be amended in Parliament.
If you would like us to work out what the change means for a specific property or transfer, call us or visit our office.
