Letting a property looks like the simplest form of property income — find a tenant, sign a lease, collect rent each month. In practice this is where most administrative slips happen, precisely because each obligation is small on its own and easy to forget.
This guide brings the tax arithmetic, the deadlines and the contract clauses that matter into one place, for anyone letting residential property in Bulgaria in 2026. Figures verified as of July 2026.
Rental income received by an individual is taxed under the Personal Income Tax Act. The calculation runs in two steps:
The result is an effective rate of 9% on rent received. On a rent of €600 per month, or €7,200 a year, the tax is €648 for the year.
One point to note: the 10% deduction is fixed. If your actual costs on the property are higher — repairs, fees, furnishing — they are not deductible on top. The reverse holds too: the deduction stands even if you spent nothing.
This is the distinction most often missed.
If the tenant is a private individual, the obligation is entirely yours. You calculate, declare and pay the advance tax quarterly.
If the tenant is a business or a self-insured person — a company, sole trader, lawyer, notary — then the tenant withholds the tax on each payment and remits it on your behalf. They must issue you a statement of amounts paid covering the income paid and the tax withheld. You file no quarterly return for that rent; the withheld amount goes into your annual return and is credited against your annual liability.
If you own two properties — one let to a family, the other to a company — both regimes run in parallel, differently, for each.
Where the tax is your own obligation, it is declared on a return under Art. 55(1) of the Personal Income Tax Act and paid by the end of the month following the quarter:
| Quarter | Filing and payment deadline |
|---|---|
| Q1 (Jan – Mar) | 30 April |
| Q2 (Apr – Jun) | 31 July |
| Q3 (Jul – Sep) | 31 October |
| Q4 (Oct – Dec) | no advance tax due |
The fourth quarter is a statutory exception — no advance payment is made, and the position is settled through the annual return instead.
If you are reading this at the end of July, 31 July is the deadline for the second quarter of 2026. The return can be filed electronically through the National Revenue Agency portal using an electronic signature or a PIN.
By 30 April of the following year you file an annual return under Art. 50 of the Personal Income Tax Act, with Appendix 4 covering rental income. It consolidates all rent for the year, credits both the advance payments you made and the tax withheld by business tenants, and settles the difference either way.
If you file electronically and pay what is due by 31 March, you qualify for a 5% discount on the balance payable. The discount is subject to a statutory cap, is available only if you have no other enforceable public liabilities, and is not applied automatically — you enter it yourself in the return.
Letting the property does not transfer the owner's obligations. Property tax and the waste collection fee remain payable by you to the municipality, regardless of who lives there. Rates are set by ordinance of each municipal council and differ between cities.
The lease can pass utilities to the tenant — electricity, water, heating, internet, building service charges — but not municipal tax liabilities.
If you let by the night through a platform rather than on a long lease, this is no longer "rent" for tax purposes but a tourism service. It requires:
An annual personal income tax return is still filed in this case. Which of the two regimes works out better for a given property depends on occupancy and local rates, not on a general rule.
For orientation: average gross yield on long-term letting nationally is around 4.6%, with net yield around 3.2% after tax and costs (indicative, per market reviews as of Q1 2026). Short-term letting can reach higher figures, but against substantially more work, greater seasonality and additional administration.
Rents kept rising through 2025 and 2026 — Sofia saw growth of around 20% over 2025, with Burgas and Varna between 10% and 15% (indicative). Combined with rising purchase prices, though, this means percentage yields move within a narrow band: numerator and denominator are both climbing.
If you are buying specifically to let, the decisive calculation is the financing rather than the rent — we cover lending conditions in our mortgage guide, and the current state of the market in the H1 2026 report.
A residential lease needs no notarial form in Bulgaria, but several clauses are expensive to omit:
One rule is worth knowing separately. Under Art. 237 of the Obligations and Contracts Act, if you sell the property, a lease entered in the Property Register binds the new owner for the remainder of its term. An unregistered lease bearing a certain date binds the buyer for at most one year from the transfer. Registration is chiefly in the tenant's interest — but for a landlord who may sell within a few years, it is a practical consideration when negotiating the term.
If you are also buying the property you intend to let, the pre-purchase document review is a separate subject — we cover it in our guide to legal checks before buying.
On the properties we manage under lease, the administration does not fall to the owner. Our standard scope covers: screening the tenant and their ability to pay; drafting the lease and the handover inventory; collecting and accounting for the deposit; transferring utility accounts; monitoring payments and the condition of the property; and preparing the figures you need for the quarterly and annual returns. We do not file returns on your behalf — that is an accountant's work — but we organise the numbers so filing takes minutes.
The tax arithmetic on long-term letting is simple: 9% effective, quarterly deadlines in April, July and October, an annual return by 30 April. The complexity lies in the details — who remits the tax, what stays with the owner, and what the lease says before a dispute arises.
If you are about to let a property and want a lease that holds up, or you are considering a purchase to let — call us or come into the office. We will look at the specific property, run the numbers on it, and tell you what rent is realistic.
Tax rules as of July 2026 under the Personal Income Tax Act, the Local Taxes and Fees Act and National Revenue Agency guidance. Market indicators are indicative and subject to change. This material is for information only and does not replace individual accounting or legal advice.
