Sellers usually work out their net proceeds as "price minus commission". In most cases that is accurate enough. But not in all: on some transactions the state takes 10% of the gain, and in one particular case — a gifted property sold too soon — almost the entire sale price becomes the taxable base.
The subject is unusually live right now. Through 2025 the approach of euro adoption pulled a large volume of purchases forward, including from buyers who bought intending a quick resale. Those properties are now coming back to market — and less than three years have passed between purchase and sale. That threshold is precisely what decides whether tax is due.
The provisions and figures below were verified as of July 2026.
Three provisions of the Personal Income Tax Act (ZDDFL) exempt the income entirely. If a transaction falls under any of them, you owe no tax and file no return for that income.
One residential property held for more than 3 years. Under Art. 13(1)(1)(a) ZDDFL, income from the sale of one residential property is exempt if more than three years have passed between the date of acquisition and the date of sale. The rule covers residential property only — apartment, house, villa. A garage, office, shop or studio does not qualify. The limit is one property per calendar year.
Up to two properties held for more than 5 years. Under Art. 13(1)(1)(b) ZDDFL, income from the sale of up to two properties — of any type — is exempt if more than five years have passed. Agricultural and forest land is counted separately, regardless of how many such plots are involved.
Property acquired by inheritance or bequest. Under Art. 13(1)(26) ZDDFL, the sale of inherited property is exempt regardless of when it was acquired or what type it is. Such a sale also does not count towards the "one" or "two" property limits above. The same applies to property restored under restitution legislation.
The three and five years are not counted from the day you moved in, nor from the preliminary contract.
For a home bought off-plan, the relevant date is that of the notarial deed, not the preliminary contract with the developer or the date the building was brought into use.
Where the transaction does not qualify for an exemption, the taxable base is the difference between the sale price and the acquisition price, less 10% statutory deductible expenses (Art. 33(1) ZDDFL). A 10% tax is applied to that base. Effectively, that is 9% of the gain.
Tax = (sale price − acquisition price) × 0.9 × 10%
An example: you buy an apartment for €120,000 and sell it two years later for €150,000. The gain is €30,000, statutory expenses €3,000, taxable base €27,000, tax payable €2,700.
The 10% deduction is granted without receipts. The reverse holds too: actual costs above that percentage — renovation, furnishing, commission — are not deductible on top.
If the sale price equals or falls below the purchase price, there is no gain and no tax. The filing obligation nonetheless remains where the transaction is not exempt under one of the three rules.
This is where the most expensive mistake in a residential sale is made.
Under Art. 33(6)(3) ZDDFL the acquisition price is zero where no documented price exists — including for property acquired by gift. A gift is not a purchase; there is no price paid in the deed to subtract from the sale price.
In practice: a parent gifts you an apartment. A year later you sell it for €100,000, having gained nothing. For tax purposes, however, the gain is the full €100,000, less the 10% statutory expenses, and the tax is €9,000.
The fix costs only time: wait until three years have passed from the date of the gift. The sale then falls within the exemption in Art. 13(1)(1)(a) and no tax is due.
Note the contrast with inheritance. An inherited property can be sold tax-free immediately. A gifted one cannot.
Part of the split is set by law; the rest is a matter of agreement. In Bulgarian practice it looks like this:
| Cost | Usually borne by |
|---|---|
| Tax on the gain (ZDDFL) | Seller — only where the sale is not exempt |
| Acquisition tax (0.1–3%) | Buyer |
| Notary fee per the statutory scale + 20% VAT | Buyer |
| Registration fee (0.1%) | Buyer |
| Tax valuation certificate | Seller |
| Encumbrance certificate | Seller |
| Energy performance certificate | Seller |
| Agency commission | By agreement |
The notary fee is capped at roughly €3,068 plus VAT, whatever the value of the property (indicative, as of July 2026). For a preliminary estimate on a specific price you can use the notary calculator. We cover the buyer's side of the costs in detail in our guide to legal checks before buying.
This step catches sellers out regularly.
Since May 2024, following an amendment to the Tax and Social Insurance Procedure Code, notaries, registration judges and the relevant officials are required to check with the National Revenue Agency whether the transferor has unpaid public liabilities. If any exist, the transaction cannot be completed until they are settled.
The scale is not trivial. Per revenue agency data, more than 1.6 million such checks were run in under a year, and liabilities were identified for 286,329 of the people checked — close to 17.5%.
If the liability cannot be paid in advance, the law allows it to be settled by the buyer out of the sale price. But that has to be agreed in the preliminary contract, not discovered on the morning of completion. This is why the liability search belongs at the start of the process, not the day before the notary. It is free of charge and can be run online through the revenue agency portal with a PIN or electronic signature, or in person at any of its offices.
If sales become systematic, the tax regime changes entirely.
The revenue agency can reclassify the activity as a business. The indicators used in that assessment are several sales in a short period — three or more within 12 months is the figure commonly cited — together with active steps taken for profit: buying, renovating and reselling quickly, that is, flipping. This is not a statutory threshold but a judgement on the facts of each case.
There are three consequences: the income is taxed as business income rather than at the effective 9%; an obligation arises to pay social contributions as a self-insured person; and once the VAT registration turnover is reached, 20% VAT applies to the sales.
There is a concrete change here this year. From 1 January 2026 the compulsory VAT registration threshold is €51,130, and turnover is now measured over the calendar year (1 January – 31 December) rather than the previous 12 months. The application must be filed within 7 days of exceeding it. At current housing prices in the major cities, a single transaction clears that threshold.
A separate rule: the sale of a new building — within 5 years of it being brought into use — by a VAT-registered person is subject to 20% VAT.
If a property was bought as an investment and a quick resale no longer looks attractive, letting it is the alternative — the tax regime there is different and lighter, and we cover it in our landlord's guide.
Recording a price below the real one in the notarial deed — typically "at the tax valuation" — lowers the buyer's acquisition tax and the seller's income tax. It creates three separate risks. The revenue agency can challenge the price. If the transaction is unwound, the buyer can claim only the recorded amount. And on any subsequent sale, that low recorded figure becomes your acquisition price and inflates the taxable gain.
With the tax valuation reform now in preparation, which we covered separately, the gap between valuation and market price will narrow — and with it the apparent benefit of the practice.
The seller's tax position is part of the conversation when we first take a property on, not something that surfaces at the notary's office. On every transaction we check the date and the instrument by which the property was acquired, whether it falls within an exemption, and if not, we run the specific numbers on the gain and the tax — so you know your net proceeds before you start negotiating on price. We file for the tax valuation certificate and the encumbrance certificate, and we flag the revenue agency liability search early enough that it does not become an obstacle on completion day. The return itself is filed by you or your accountant — we prepare the figures and documents it needs.
Whether waiting makes sense also depends on where the market is heading. We set out the current data in our H1 2026 market report
Most residential sales in Bulgaria are tax-free: one home after three years, up to two properties after five, inherited property always. Tax is chiefly payable in two situations — a quick resale, and a gifted property sold before the third year. In the first, the bill is 9% of the gain; in the second, 9% of almost the entire sale price.
If a sale is coming up and you want to know exactly what you will be left with — call us or come into the office. We will check the date and manner of acquisition, run the numbers on the specific property, and tell you whether waiting is worth it.
Provisions as of July 2026 under the Personal Income Tax Act, the VAT Act, the Local Taxes and Fees Act and the Tax and Social Insurance Procedure Code. Amounts are indicative and subject to change. This material is for information only and does not replace individual tax, accounting or legal advice.
