Buying Property in Bulgaria — Complete Guide (2026)

Real estate market in Bulgaria (2026)

The Bulgarian real estate market has demonstrated sustained growth in recent years, with prices in Sofia reaching an average of approximately EUR 2,250 per sq.m. by early 2026 — an increase of approximately 100 % from 2020 levels.

The main factors driving the market include:

• Euro adoption — since 01.01.2026, Bulgaria is part of the eurozone, eliminating currency risk and boosting foreign investor confidence.
• Schengen membership — since 2025, Bulgaria is a full member of the Schengen area, facilitating free movement.
• Low taxes — the tax on rental income and capital gains is 10 %, significantly below the EU average.
• Growing tourism sector — Black Sea and mountain resorts generate stable income from short-term rentals.

The forecast for 2026–2027 is for moderate growth of 2–5 % annually, supported by a stable macroeconomic environment and growing demand from foreign buyers.

Who can buy property in Bulgaria?

The rules for acquiring real estate depend on the buyer's nationality:

Citizens from non-EU countries can acquire buildings and apartments freely, but not land (including land attached to the building). The standard practice is establishing an EOOD (single-member LLC), which acquires the property. Incorporating a company with minimum capital of EUR 1 and notary fees does not represent a significant financial burden.

5 steps when buying property

1. Property search and agent selection

   Working with a licensed real estate broker is recommended, though not mandatory. The agent's commission is typically 2.5–3.6 % of the purchase price and is paid by the buyer (in some cases shared between the parties). Make sure the agent is registered and holds valid professional liability insurance.

2. Legal due diligence

   A mandatory step that includes: verification of ownership in the Property Register; check for encumbrances, mortgages, and seizures; cadastral map verification; review of building permits and occupancy documents (Act 16); and verification of the seller's tax status. We strongly recommend engaging a lawyer specializing in real estate law.

3. Preliminary contract

   The preliminary contract sets the essential terms of the transaction: price, payment method, deadline for executing the notarial deed, and penalties. The standard practice is for the buyer to pay a 10 % deposit of the purchase price upon signing. The preliminary contract does not require notarization but is legally binding.

4. Notarial deed

   The transfer of ownership is executed through a notarial deed signed before a notary in the district of the property. The notary verifies the identity of the parties, the right of ownership, and the absence of encumbrances. Payment of the remaining price is usually made by bank transfer on the day of execution.

5. Registration in the Property Register

   The notarial deed is registered in the Property Register at the Registry Agency. Registration ensures the enforceability of the buyer's rights against third parties. The registration fee is 0.1 % of the material interest.

Costs of buying property

Total transaction costs range between 5 and 10 % of the purchase price. Below is a detailed table:

VAT on real estate transactions

VAT liability depends on the type of property and the seller's status:

• New buildings (up to 5 years from issuance of occupancy permit) — taxable supply, 20 % VAT.
• Regulated building land (UPI) — taxable supply, 20 % VAT.
• Old buildings (over 5 years) — exempt supply under Art. 45 of the VATA. The seller may opt for taxation.
• Dwellings — a reduced rate of 9 % VAT applies to the supply of dwellings that are part of state housing policy when purchased by an individual as a primary residence.

When buying from an individual (not VAT-registered) or in the case of an exempt supply, VAT is not charged.

Annual real estate tax

Real estate owners in Bulgaria owe an annual tax of 0.01 to 0.45 % of the property's tax assessment value, set by the respective municipality. The tax is paid in two installments — by 30 June and by 31 October of the current year. Paying the full tax by 30 April qualifies for a 5 % discount.

Capital gains tax and mortgage financing

Capital gains tax

When selling real estate, the capital gains tax is 10 % on the positive difference between the selling price and the purchase price (reduced by documented acquisition costs and improvements).

Important exemption: individuals do not owe tax on the sale of:

• Primary residence — regardless of the holding period, if the property was the seller's primary residence.
• Up to two properties — if held for more than 3 years before the sale.
• More than two properties — if held for more than 5 years before the sale.

Mortgage financing

Bulgarian banks offer mortgage loans to both local and foreign citizens under the following approximate conditions:

• Financing amount — 60–80 % of the appraised property value (LTV).
• Interest rates — 3–5 % annually (fixed for the first 1–3 years, then floating).
• Term — up to 30 years.
• Currency — since 01.01.2026, loans are disbursed in euro.
• Requirements — proven income (last 6–12 months), credit history, property appraisal by a licensed appraiser.

For foreign citizens without income in Bulgaria, the LTV may be lower (50–60 %), and documentation requirements may be more extensive.

Frequently asked questions