"I'm transferring the flat, but I keep the right to live in it for the rest of my life." This is one of the most common arrangements between parents and children in Bulgaria, and sometimes even in sales to an unrelated buyer. Legally it is a reserved lifelong right of use (запазено пожизнено право на ползване) — in essence a usufruct. Here is how it works in practice, how it is valued, and when it makes sense.
A right of use is a limited property right over someone else's property. It entitles the holder to use the property for its intended purpose and to take its yields, without substantially altering it (Art. 56 of the Property Act). The holder can live in the property or earn income from it, but cannot transfer the right itself to anyone else.
The transaction splits the ownership:
The right is reserved in the notarial deed of sale or gift itself — for example, "the seller reserves a lifelong right of use over the property". Contracts transferring ownership or creating property rights over real estate must be made by notarial deed (Art. 18 of the Obligations and Contracts Act), and the deed is entered in the Property Register. The right is therefore visible to any future buyer, bank or creditor.
It can cover the whole property or part of it, one or both parents, for life or for a fixed term.
By law the user (Arts. 57–58 Property Act):
If the user damages or substantially alters the property despite a warning, the owner can ask a court to end the right (Art. 61 Property Act).
Where a right of use has been created, the user, not the owner, is liable for building tax (Art. 11(3) of the Local Taxes and Fees Act, LTFA). The waste fee is payable by the same persons (Art. 64(1) LTFA). So while the parent uses the property, the parent receives the notices and pays. For how both are calculated and the deadlines, see property tax and the waste fee.
The tax value of a right of use is set by Annex 2 to the LTFA (Art. 23):
Value of the right = tax valuation of the property × Kс, where Kс = 1 − 1.05⁻ⁿ (capped at 0.900) and n is the number of years the right is granted for.
For a lifelong right, n = 70 minus the user's age; with more than one user, the youngest counts. If the user is over 70, n = 5.
The tax valuation of the ownership is reduced by the value of the right of use for the remaining period (Art. 24 of Annex 2). For a property with a tax valuation of €60,000:
| User's age | n | Kс | Right of use | Bare ownership |
|---|---|---|---|---|
| 45 | 25 | 0.705 | €42,300 | €17,700 |
| 55 | 15 | 0.519 | €31,140 | €28,860 |
| 60 | 10 | 0.386 | €23,160 | €36,840 |
| over 70 | 5 | 0.216 | €12,960 | €47,040 |
Indicative example; the actual tax valuation comes from the municipality's certificate.
Why it matters: the local tax on acquisition is charged on the agreed price, or the tax valuation if higher (Art. 46 LTFA). On a sale, each municipal council sets the rate between 0.1% and 3% (Art. 47(2) LTFA), so it differs by municipality. Gifts between lineal relatives and between spouses are exempt (Art. 44(6) LTFA). The seller's income tax is a separate matter — see tax when selling property.
The right of use is extinguished (Art. 59 Property Act):
The user can also renounce the right — the renunciation is made before a notary and registered. A court can terminate it under Art. 61. Once it ends, the owner holds full ownership with no further transaction.
For a cash buyer with a long horizon, this can be an investment. For someone looking for a home to live in, it usually is not.
A transfer of property in exchange for maintenance and care (издръжка и гледане) is a different contract: the acquirer undertakes to look after the transferor. It is often combined with a reserved right of use. If the care is not provided, the contract can be terminated, but only through the courts (Art. 87(3) Obligations and Contracts Act). A reserved right of use on its own obliges nobody to care for the user.
This is general information, not legal or tax advice for a specific case. Verified October 2026.
If you are considering a transfer with a reserved right of use, or have been offered such a property, call us or visit our office. We will review the documents and work out the tax valuation with you before you go to the notary.
