On 23 September 2026 Bulgaria's Ministry of Finance published the draft tax amendments that accompany the 2027 budget. Most of the headlines went to property tax valuations, which we have covered in a separate article. The draft VAT Act amendments, however, contain a second measure aimed squarely at the property market: mandatory VAT registration for anyone selling a new building or a regulated plot of land, regardless of turnover.
This is a draft, not law. It still has to go through the Council of Ministers and Parliament, and the wording may change.
As presented by Deputy Finance Minister Lyudmila Petkova and reported afterwards:
"This measure is aimed at preventing opportunities to conceal and not pay VAT," Petkova said.
In the same package, the general mandatory VAT registration threshold is proposed to rise from €51,130 to €75,000 from 1 January 2027. For sales of new buildings and regulated plots, that threshold would be irrelevant.
Today the obligation to register arises once taxable turnover exceeds the threshold for the calendar year, and the application is filed within 7 days after that. According to the Ministry, this leaves room for a scheme in which a company puts up a building, sells every unit in a single day before it is registered, and then has nothing left to sell — with no VAT charged on the sales.
Under the new rule, registration has to be in place before the first sale, and the tax authority learns about it at least a week in advance.
Developers and builders. Established construction companies have long been VAT-registered, and for them little changes. The measure targets one-off project companies and the "sell it all in a day" scheme.
Landowners. The draft also covers regulated plots and the granting of building rights. As reported, the measure applies to persons carrying out an independent economic activity. A private individual selling their own home is not, as a rule, carrying out such an activity — but the line depends on the facts, for example where someone builds or buys in order to resell. When selling a plot or agreeing compensation under a building-rights deal, it is worth taking advice before signing the preliminary contract.
Buyers of new homes. VAT on a new building is not a new concept. Under §1, item 5 of the Supplementary Provisions of the VAT Act, a building is "new" if it is at the rough-construction stage or if fewer than 60 months have passed since the permit for use, and its sale is taxable at 20% VAT — we covered this in detail in our comparison of new-build and resale. What changes is that a seller will no longer be able to lawfully sidestep VAT by selling before registering.
Until the draft is adopted, the current rules apply. Our practice is the same either way:
The draft goes through public consultation, approval by the Council of Ministers and a vote in Parliament alongside the budget. The intended start is 2027, but the final wording and effective date will only be certain once it is adopted. We will update this article when the bill is tabled.
The Ministry of Finance proposes that anyone selling a new building or a regulated plot must register for VAT at least 7 days before the deal, whatever their turnover. The aim is to close the "every flat in one day, before registration" scheme. For buyers purchasing from a bona fide developer, the price should not change; for one-off projects and land sales, the arithmetic may look different.
If you are buying a new home or selling a plot and want to be sure how the transaction will be taxed, call us or visit our office. We will go through the contract with you before you sign.
Based on the draft VAT Act amendments published by the Ministry of Finance on 23 September 2026 and reporting by Economic.bg and Infoz.bg on the same date. Verified as of 25 September 2026. The text is a draft and may change; this article is not tax advice on any specific case.
