"We'll give you our three-bedroom flat in the centre, you give us your house outside Sofia, and we'll pay the difference." Offers like this come up more often than you might think — between relatives, between co-owners, between the owner of an old flat and a developer. Bulgarian law calls it an exchange (замяна). It can save fees and taxes compared with two separate sales, but it has rules of its own that are worth knowing before you go to the notary.
Under an exchange contract the parties transfer ownership to each other of things or rights (Art. 222 of the Obligations and Contracts Act, ЗЗД). The rules on sale apply, with each party treated as the seller of what it gives and the buyer of what it receives (Art. 223 ЗЗД). In practice, both of you are liable for legal and physical defects in the property you hand over — exactly as in a sale.
For real estate, the exchange is made by notarial deed (Art. 18 ЗЗД) and entered in the property register.
Exchange with a cash top-up. If the two properties are not of equal value, one party can pay the difference in money. The contract is then mixed — an exchange plus a sale for the part paid in cash. If the difference is not paid but given as a gift (between parents and children, say), the contract combines exchange and gift, and each part has to meet its own legal requirements.
What these have in common: both sides want precisely the other's property. If one side really wants cash, two sales are the more honest and safer route.
This is where the exchange earns its keep.
Local transfer tax. Acquiring property for consideration triggers a municipal tax set by each council at 0.1% to 3%. In an exchange the tax is charged only once — on the valuation of the higher-value property (Art. 47(2) of the Local Taxes and Fees Act, ЗМДТ). In two separate sales, each buyer pays tax on the property they buy.
Who pays? By law, the party acquiring the higher-value property, unless agreed otherwise. If you agree that both pay, you are jointly and severally liable (Art. 45(1) ЗМДТ). The base is the agreed value, but not less than the tax valuation (Art. 46(2)(1) ЗМДТ).
Notary fee. The material interest in an exchange is the market price of the more expensive property (Art. 96(1)(2) of the Notaries Act, ЗННД) — one fee, not two. If the agreed price is higher than the valuation, the fee is charged on the higher figure. You can get an indicative figure for notary costs from our notary calculator.
Registration fee. The Registry Agency charges 0.1% of the price on which the deed was charged.
Illustration: you swap a flat valued at €150,000 for a house valued at €180,000 and pay a €30,000 top-up. Local tax is paid once on €180,000, not on €150,000 + €180,000. At a 2.5% rate, that is about €3,750 less tax than two sales — plus one notary fee fewer.
Bulgaria's Personal Income Tax Act expressly puts exchange on the same footing as sale (Art. 13(1)(1) ЗДДФЛ). No tax is due if, in the tax year, you exchange:
Property received by inheritance or bequest is exempt with no minimum holding period and no limit on the number (Art. 13(1)(26)).
If no exemption applies, the taxable income is the difference between the "sale" price and the acquisition price, less 10%. In an exchange, the sale price includes everything you receive, the property included, valued at market price (Art. 33(5) and Art. 10(4) ЗДДФЛ). If you pay a top-up, it is added to your acquisition price (Art. 33(6)(2)).
A useful detail for later: when you eventually sell a property you received in an exchange, its acquisition price is its market value on the date of the exchange (Art. 33(6)(6)). Keep evidence of that value — a valuation, or the agreed value stated in the deed. More on tax when you sell in our guide to tax when selling property.
Where one party is a VAT-registered developer and the other receives a new building, the law treats the deal as two counter-supplies (Art. 130 of the VAT Act, ЗДДС). The supply of the new home is subject to VAT, and the tax base is the agreed money value; if the parties have not set one, it is determined under the special rules of Art. 26(7) ЗДДС and, failing that, at market price.
A private individual making a one-off swap of their old flat is normally outside the VAT system. But before signing a preliminary contract with a developer, get it in writing whether the stated value is inclusive or exclusive of VAT and who owes it.
Spouses. Property held in the marital community can be exchanged only by both spouses together (Art. 24(3) of the Family Code, СК). If you exchange personal property, what you receive stays personal (Art. 23(1) СК). Be careful with top-ups, though: if the difference is paid from joint money, a corresponding share of the new property becomes joint, unless it is insignificant (Art. 23(2) СК). More in our guide to spouses and property.
Mortgages. A mortgage follows the property, whoever owns it (Art. 173(1) ЗЗД). If you give a mortgaged property, the other side takes it with the charge. Loan agreements usually deal with what happens if the collateral is transferred — read yours and talk to the bank before you sign anything. In most cases the cleanest solution is to repay the loan or substitute the collateral before the deal.
Co-owners and the right of pre-emption. A co-owner who wants to sell their share to an outsider must first offer it to the others (Art. 33 of the Property Act, ЗС). The provision speaks only of sale, and according to legal commentary and case law pre-emption generally does not apply to an exchange — the other co-owners cannot offer the same counter-performance. Two important caveats: if the "exchange" in fact disguises a sale, a court can declare it simulated; and in an exchange with a top-up where the cash part predominates, there is a real risk that Art. 33 ЗС applies. On co-ownership and partition, see our guide to co-owned and inherited property.
Minors. Disposing of a child's property, exchange included, requires the permission of the district court (Art. 130(3) СК).
If you are considering an exchange — within the family, with a co-owner or with a developer — call us or come into the office. We will value both properties, run the checks and tell you whether an exchange or two separate sales is the better route for you.
This is general information, not legal or tax advice. Verified as of November 2026 against ЗЗД, ЗМДТ, ЗННД, ЗДДФЛ, ЗДДС, the Family Code and the Property Act. The local tax rate is set by each municipality — check the rate in force where the property is. The example is illustrative.
