Sometimes the simplest solution is a swap: a one-bedroom flat in the centre for a larger home further out, a Sofia apartment for a house in the countryside, the parents' home for the children's. Instead of two separate sales, Bulgarian law allows a single exchange contract (договор за замяна).
An exchange has real advantages — above all a lower local tax bill — but also pitfalls worth knowing in advance. Here they are, step by step.
Under an exchange contract the parties transfer ownership to each other of things or rights (Art. 222 of the Obligations and Contracts Act). The rules on sale apply accordingly (Art. 223): each party is treated as the seller of what it gives and the buyer of what it receives.
In practice, each party is liable to the other if its property has legal or hidden defects — exactly as in a sale.
Because ownership of real estate is transferred, the exchange must be made in notarial form and entered in the Property Register. Both properties are described in one notarial deed.
Two properties are rarely worth exactly the same. So the parties often agree a top-up — whoever receives the more valuable property pays the difference in cash.
The deal is still an exchange. The deed should state clearly:
This is the main financial advantage.
On an ordinary sale, the local tax on acquisition (0.1% to 3% depending on the municipality; 3% in Sofia) is charged on the higher of the agreed price and the tax valuation. With two separate sales the tax is paid twice — once for each property.
On an exchange, the Local Taxes and Fees Act provides that the tax is calculated on the value of the property with the higher value (Art. 47(2)). It is paid by the party acquiring the higher-value property, unless the parties agree otherwise; if they agree to share it, they are jointly and severally liable (Art. 45(1)). The value is the agreed one, but not less than the tax valuation (Art. 46(2)(1)).
Example (indicative, Sofia, 3% rate): property A is worth €150,000, property B €200,000, both above their tax valuations.
| Two sales | Exchange | |
|---|---|---|
| Tax on property A | €4,500 | — |
| Tax on property B | €6,000 | €6,000 |
| Total local tax | €10,500 | €6,000 |
The €4,500 difference is real, but depends on the municipality's rate. If the properties are in different municipalities, check in advance with the municipality where and at what rate the tax will be paid.
The notary fee and the registration fee are calculated under their respective tariffs. Ask the notary for an exact figure for your exchange before booking the deal; for a rough guide to an ordinary sale you can use our notary fee calculator.
For personal income tax, an exchange is treated as a sale — for both parties.
Income is tax-exempt if it comes from the "sale or exchange" of (Art. 13(1)(1) of the Personal Income Tax Act):
Income from the sale or exchange of inherited property is also exempt (Art. 13(1)(26)).
Where no exemption applies, taxable income is the difference between the value of what you receive (including any top-up paid to you) and what you originally paid for your property, reduced by 10% for expenses. The tax rate is 10%. The full calculation is in our guide to tax when selling property.
Watch the clock after the exchange. The property you receive is treated as acquired on the date of the exchange. In a 2022 opinion the National Revenue Agency accepted that exchanging an inherited property was tax-free, but that a later sale of the properties received in the exchange was taxable. If you might sell the new home soon, work out the tax in advance.
If the other party is a company (for example a developer taking your old flat in exchange for a new one), for VAT purposes the exchange is two reciprocal supplies (Art. 130 of the VAT Act). Ask the developer how the price was set and whether it includes VAT.
A mortgage follows the property. If one of the properties is mortgaged, the mortgage does not disappear with the exchange — the new owner would receive a property secured for someone else's debt. So the loan is normally repaid and the mortgage cancelled as part of the deal, with the bank's agreement. How this works on a sale is covered in our article on selling a property with a mortgage on it.
Spouses take part together. If the property was acquired during the marriage and is held in the marital community, both spouses must take part in the exchange. The reverse matters too: a property received in exchange for personal property generally remains personal — but a top-up paid from joint funds can change that. More in our guide to spouses and property.
In an exchange you are both seller and buyer, so you need a full check of the property you are receiving:
The full checklist is in our guide to legal checks before buying. Prepare your own documents too — the other side will check you in the same way.
An exchange works well when each party wants exactly the other's property — most often between relatives, or when the parties find each other directly. There is one deal, a lower tax bill, and nobody is left between two homes.
When there is no such counterparty, or a bank loan is needed, the more realistic path is two synchronised deals. How to sequence them safely is covered in our guide selling to buy.
If you are considering swapping properties and would like us to work out the costs and check both properties before the notary — call us or come into the office.
General information, not a substitute for specific legal advice. Verified November 2026; local tax rates are set by each municipality and may change.
