I. Overview of Transaction Costs
The acquisition of real property in Bulgaria gives rise to four principal cost items beyond the purchase price itself: the local transfer tax (данък при придобиване на имущество), the notary fee (нотариална такса), the property registration fee (такса вписване), and, where applicable, VAT (данък върху добавената стойност). In addition, the buyer will typically incur legal fees for title investigation and transaction management, and may incur real estate agent commissions. Together, the mandatory fiscal and notarial costs typically amount to between three and four percent of the higher of the agreed purchase price and the tax valuation of the property.
II. Local Transfer Tax
The local transfer tax is levied by the municipality in whose territory the property is located, at a rate set by the municipal council within the band of 0.1% to 3% of the tax base. In Sofia — the municipality most frequently relevant to foreign buyers — the current rate is 3%. The tax base is the higher of the agreed purchase price and the official tax valuation (данъчна оценка) of the property as determined by the municipal tax authority. The tax valuation is an administratively determined figure that is typically below market value for most Sofia properties, meaning that the tax base is usually the agreed purchase price.
By convention — though not by statutory obligation — the transfer tax is paid by the buyer. It is payable on the day of the notarial transaction, at the notary's office, before the deed is executed. The notary will not proceed with the transaction until evidence of payment of the transfer tax is presented. The tax is paid to the municipal revenue authority of the municipality where the property is located.
III. Notary Fee
The notary fee is calculated according to a statutory scale set by the Notary Chamber of Bulgaria, applied to the tax base (the higher of the purchase price and the tax valuation). The scale is progressive — the percentage rate decreases as the value increases — and is capped at a maximum of €3,068 per transaction, to which VAT is added, irrespective of the property value. The following table illustrates the fee scale:
| Tax base (EUR) | Notary fee |
|---|---|
| Up to €51 | €15 flat |
| €52 – 511 | €15 + 1.5% on the amount above €51 |
| €512 – 5,113 | €22 + 1.3% on the amount above €511 |
| €5,114 – 25,565 | €82 + 0.8% on the amount above €5,113 |
| €25,566 – 51,130 | €246 + 0.5% on the amount above €25,565 |
| €51,131 – 255,646 | €374 + 0.2% on the amount above €51,130 |
| Above €255,646 | €783 + 0.1% on the amount above €255,646 (max €3,068) |
The notary fee is payable by the party who initiates the transaction — in practice, the buyer — on the day of execution of the notarial deed. It does not include VAT (notarial services are exempt from VAT). Where the transaction involves services in addition to the execution of the deed — such as the preparation of the deed text, identity verification, or translation services — supplemental fees apply according to the Notary Chamber's tariff.
IV. Property Registration Fee
The property registration fee is charged by the Registry Agency for the entry of the notarial deed in the Property Register. The fee is 0.1% of the tax base, with a minimum of €5.11. It is payable by the party applying for registration — in practice, the notary acts as agent for the parties and submits the registration application on their behalf on the day of execution of the deed.
V. VAT
Most residential property transactions in Bulgaria are exempt from VAT. The principal exemptions cover: the sale of residential buildings (or parts thereof) more than five years old; the sale of undeveloped land that is not "regulated" for construction; and the sale of agricultural land. The standard VAT rate of 20% applies to: the sale of new residential buildings (less than five years old) by a VAT-registered developer; the sale of commercial property (offices, retail, industrial) by a VAT-registered vendor; and the sale of "regulated" building plots.
Where VAT applies, it is charged on top of the agreed price and is borne by the buyer unless the parties agree otherwise. The notary fee and transfer tax are calculated on the VAT-exclusive price. For buyers acquiring new construction directly from a developer, VAT is a material additional cost that must be factored into the budget from the outset.
VI. Additional Costs to Budget For
Beyond the mandatory fiscal and notarial costs, a prudent buyer should budget for the following:
- Legal fees: A pre-acquisition title investigation and transaction management service by a Bulgarian attorney typically costs between €250 and €1,000 depending on the complexity of the transaction and the value of the property. For transactions involving corporate buyers, agricultural land, or off-plan acquisitions, fees will be higher.
- Real estate agent commission: Where a real estate agent has been involved, the agent's commission (typically 2–3% of the purchase price, payable by the buyer, the seller, or both) is agreed in the agency contract and is payable on completion.
- Certified translation: Where the buyer is a foreign national whose identity documents are not in Bulgarian, a certified translation will be required for the notarial transaction. Translation costs vary but are typically modest.
- Bank charges: Where the purchase price is paid by bank transfer from a foreign account, the buyer's bank and the receiving bank may levy transfer charges and currency conversion fees.
VII. Who Bears Each Cost?
As a matter of Bulgarian law, the transfer tax is payable jointly by the buyer and the seller. In practice, it is almost universally agreed that the buyer pays the transfer tax, and this allocation is confirmed in the preliminary contract and the notarial deed. The notary fee and registration fee are by convention paid by the buyer. VAT, where applicable, is charged by the seller (as the VAT-registered supplier) and borne by the buyer. These conventional allocations are subject to negotiation and may be varied by agreement between the parties.