Should you buy property in Bulgaria through a company or in your own name? For non-EU citizens who want agricultural land, for investors who want to deduct maintenance and depreciation, and for anyone who wants liability separation between personal assets and real estate holdings, the EOOD (single-member limited liability company) is the standard structure. As a law firm that handles both personal and corporate property purchases for foreign clients, we see the trade-offs every week. This guide covers the real advantages, the real costs, and the process — so you can decide whether an EOOD is the right vehicle for your investment. All figures are in EUR following Bulgaria's euro adoption on January 1, 2026.
Why Buy Through an EOOD?
An EOOD is a Bulgarian legal entity. Under Bulgarian law, it has the same property rights as a Bulgarian citizen — including the right to acquire agricultural land, forests, regulated plots, residential buildings, and commercial property without any restrictions.
This matters for three reasons:
Agricultural Land Access
The Bulgarian Constitution prohibits non-EU individuals from owning land directly. EU citizens gained full land ownership rights after Bulgaria's EU accession, but non-EU nationals still face this restriction. The standard workaround: register a Bulgarian EOOD and buy the land through the company. You own 100% of the company shares, the company owns the land. This structure is fully legal and widely used — it is how the majority of non-EU property investors in Bulgaria acquire land.
Tax Deductions on Expenses
When an EOOD owns property, all legitimate property-related expenses reduce taxable income. Maintenance, renovation, insurance, property management fees, mortgage interest, accounting costs, and building depreciation — all deductible. An individual owner cannot deduct most of these (individuals receive only a flat 10% automatic expense deduction on rental income).
Liability Separation
Property held by an EOOD is a company asset, not a personal asset. Your personal liability is limited to the company's registered capital (typically EUR 1). If you face personal legal claims, creditors cannot directly seize the EOOD's property. Conversely, if a tenant sues over a property issue, your personal assets remain protected behind the corporate veil.
Already have an EOOD? If you registered a company for consulting, IT, or other services, you can use the same EOOD to buy property. There is no legal requirement to create a separate company — though some investors prefer it for cleaner accounting and easier future sale of the property (by selling the company shares rather than the property itself).
EOOD vs Personal Ownership
The choice between corporate and personal ownership depends on your investment profile. Here is a direct comparison:
| Factor | EOOD Ownership | Personal Ownership |
|---|---|---|
| Agricultural land | Yes (all types) | EU citizens only; non-EU prohibited |
| Rental income tax | 10% CIT on net profit (after all expenses) | 10% on gross minus flat 10% deduction (effective ~9%) |
| Deductible expenses | All documented: maintenance, depreciation, insurance, interest, management | Flat 10% automatic deduction only |
| Depreciation | 4% per year on buildings (25-year straight-line) | Not available |
| Capital gains on sale | 10% CIT always (no holding-period exemption) | 0% after 3 years (1 property/year); 0% after 5 years (up to 3/year) |
| Dividend extraction | Additional 5% WHT on distributed profits (15% combined) | N/A — income is yours directly |
| Mortgage access | Harder — banks more cautious with corporate borrowers | Standard mortgage products available |
| Inheritance | Company shares inherited (simpler for foreign heirs) | Property inheritance follows Bulgarian succession law |
| Annual admin costs | EUR 1,500-3,000/year (accountant, address, filings) | Minimal (property tax declaration only) |
| Exit complexity | Sell shares or sell property from company; transfer triggers taxes | Straightforward notary sale |
The key trade-off: An EOOD gives you full expense deductibility and depreciation, but you lose the personal capital gains exemption (0% after 3 years). If you plan to buy, hold, and sell a single residential property — personal ownership is usually better for the exit. If you plan to hold rental property with significant expenses, or if you are a non-EU citizen who needs land — the EOOD is the stronger structure.
Tax Advantages in Detail
Rental Income at 10% CIT
When your EOOD rents out property, the rental income is corporate revenue. You pay 10% corporate income tax (CIT) on net profit — meaning after deducting all legitimate business expenses. If you subsequently distribute profit as dividends, an additional 5% withholding tax applies, giving a combined rate of 15%.
Compare this with personal ownership: individuals pay 10% on rental income minus a flat 10% automatic deduction (effective rate ~9% of gross). The individual rate looks lower — but only because individuals cannot deduct actual expenses beyond the flat 10%. If your real expenses (maintenance, management, insurance, repairs) exceed 10% of gross rental income, the EOOD structure reduces your taxable base further.
Building Depreciation at 4% Per Year
This is one of the most significant tax advantages of the EOOD structure. Buildings held as company assets can be depreciated at 4% per year under the straight-line method (25-year useful life), as set by the Bulgarian Corporate Income Tax Act. Land is not depreciable.
Example: Your EOOD buys a property for EUR 200,000. The building is valued at EUR 160,000 and the land at EUR 40,000. Annual depreciation: EUR 160,000 × 4% = EUR 6,400. This reduces your taxable rental income by EUR 6,400 every year — a tax saving of EUR 640 annually, even though no cash actually leaves the company.
The building-land split matters. Only the building portion is depreciable. When purchasing property through an EOOD, your accountant should establish the correct allocation between building and land value — typically based on the tax assessment or an independent valuation. A higher building allocation means more depreciation and lower tax.
Full Expense Deductibility
The EOOD can deduct all documented, business-related property expenses against rental income:
- Maintenance and repairs — plumbing, electrical, painting, appliance replacement
- Renovation costs — may be capitalized and depreciated if they extend useful life
- Property insurance
- Mortgage interest (if the EOOD holds the loan)
- Property management fees
- Building maintenance fees (common charges in apartment complexes)
- Accounting fees attributable to the property activity
- Advertising costs for finding tenants
- Municipal property tax and garbage collection tax
For a detailed guide on rental income taxation, see our article on Bulgaria rental income tax.
Capital Gains at 10% CIT
If the EOOD sells a property at a profit, the capital gain is taxed at 10% CIT. The gain is calculated as the sale price minus the tax book value (original cost minus accumulated depreciation). If you then distribute the after-tax gain as dividends, an additional 5% WHT applies — 15% combined.
Importantly: there is no holding-period exemption for companies. Unlike individuals, who can sell one residential property tax-free after 3 years, an EOOD always pays 10% CIT on the gain regardless of how long it held the property.
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Get a Free Consultation →The Purchase Process
Buying property through an EOOD follows the same notary-deed process as a personal purchase, with one additional prerequisite: the company must exist before the purchase. The full process typically takes 6-10 weeks.
- Register the EOOD (if you don't already have one). Company registration takes approximately 5-7 business days from filing. You need a founding act, registered address, and bank account with minimum capital deposited (EUR 1 minimum). For the full process, see our guide on registering a company in Bulgaria. Total cost: EUR 700-1,000 in legal fees plus EUR 28 state fee.
- Sign a preliminary contract. The EOOD (represented by you as manager) signs a preliminary purchase contract with the seller. This is legally binding and typically requires a deposit of 10% of the price. Your lawyer should review this contract before you sign — ensure it names the EOOD as the buyer, not you personally.
- Due diligence (2-3 weeks). Your lawyer checks: Certificate of Encumbrances (10-year ownership and lien history), cadastral scheme, tax assessment, Act 16 (occupancy permit), outstanding municipal debts, and building permits. This is where problems surface — hidden mortgages, missing permits, disputed ownership. Never skip this step.
- Notary deed (notarial act of sale). Both parties meet at the notary. You attend as the EOOD's manager (or grant a notarized power of attorney to your lawyer). The notary verifies identities, confirms the seller's title, and executes the transfer. All taxes and fees are paid at this stage — municipal transfer tax, notary fees, and registry fee.
- Registration with the Property Register. The notary submits the deed to the Registry Agency. Once registered (typically 1-2 weeks), the EOOD is the official owner. Your accountant then records the property as a fixed asset on the EOOD's balance sheet and begins calculating depreciation.
Corporate resolution required. Before the EOOD can purchase property, you must adopt a decision as sole owner authorizing the transaction. This is a simple one-page document (protokol), but the notary will require it. Your lawyer prepares this as part of the purchase process.
EOOD Setup + Property Purchase Support
Company registration, due diligence, contract review, notary proceedings, and property registration — handled end-to-end. Fixed-price packages available.
Get a Fixed-Price Quote →Costs Breakdown
Budget for two categories of costs: one-time purchase costs and ongoing annual costs.
One-Time Purchase Costs
| Cost | Rate / Amount | Notes |
|---|---|---|
| Municipal transfer tax | 0.1-3% | 3% in Sofia, Plovdiv, Varna, Burgas; lower in smaller municipalities |
| Notary fees | ~0.4-1.5% | Progressive tariff; higher percentage on lower values. Plus 20% VAT on the fee |
| Registry Agency fee | 0.1% | For property registration |
| Legal fees (due diligence + transaction) | EUR 500-1,500 | Independent lawyer representing the EOOD |
| EOOD registration (if new) | EUR 700-1,000 | Legal fees + EUR 28 state fee. Skip if EOOD exists |
| Total (major city, existing EOOD) | ~4-5% of purchase price (excluding agent commission) | |
Example: EUR 150,000 apartment in Sofia (existing EOOD). Transfer tax (3%): EUR 4,500. Notary fees (~0.6% + VAT): EUR 1,080. Registry fee (0.1%): EUR 150. Legal fees: EUR 800. Total: approximately EUR 6,530 (4.4%).
Tax base for transfer tax: The municipal transfer tax is calculated on whichever is higher: the declared transaction price or the official municipal tax assessment. Declaring a lower price to reduce tax is risky — the NRA can reassess and impose penalties.
Ongoing Annual Costs
| Cost | Annual Amount | Notes |
|---|---|---|
| Annual property tax | 0.1-0.45% of tax assessment | Set by municipality; tax assessment is typically below market value |
| Garbage collection tax | EUR 50-200 | Municipal, varies by area and property size |
| EOOD accounting | EUR 1,200-3,000 | EUR 100-250/month depending on activity level |
| Registered address | EUR 180-480 | Virtual office or your own address |
| KEP (electronic signature) | EUR 25-50 | Required for all NRA filings |
| GFO publication | EUR 15 | Annual financial statement filing |
| Total annual EOOD running cost | EUR 1,500-3,800 (on top of property tax) | |
For a detailed breakdown of all EOOD running costs, see our guide: Total annual cost of running an EOOD in Bulgaria.
Disadvantages of the EOOD Structure
The EOOD is not always the right choice. Here are the genuine downsides:
No Personal Capital Gains Exemption
This is the biggest trade-off. Individuals in Bulgaria can sell one residential property per year completely tax-free after holding it for 3+ years (and up to 3 properties per year after 5+ years). An EOOD never qualifies for this exemption — every sale triggers 10% CIT on the gain, plus 5% dividend WHT if distributed. For a buy-and-hold investor planning to sell one property, this can be a significant cost.
Higher Running Costs
An EOOD requires monthly accounting, annual financial statements, tax returns, and compliance filings. Budget EUR 1,500-3,800 per year in administrative costs that a personal owner would not have. If the property is your only investment and generates modest rental income, these costs may outweigh the tax savings from deductions and depreciation.
Exit Complexity
Transferring property out of an EOOD (to yourself or anyone else) is treated as a sale or distribution in kind. This triggers:
- Municipal transfer tax (0.1-3%) on the transfer
- Notary fees and registration costs
- Corporate income tax on any capital gain in the EOOD
Alternatively, you can sell the EOOD's shares rather than the property itself — which avoids transfer tax but requires more complex due diligence for the buyer and may affect their financing options.
Mortgage Challenges
Bulgarian banks are more cautious when lending to corporate borrowers, especially foreign-owned EOODs. Expect higher interest rates, lower loan-to-value ratios (meaning a larger down payment), and more documentation than for a personal mortgage application. Many EOOD property investors fund purchases with equity rather than debt for this reason.
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Book a Free Call →Common concerns about buying property through an EOOD:
"Is it legal for a foreigner to own 100% of a Bulgarian EOOD that holds land?" Yes, completely legal. There are no restrictions on foreign ownership of Bulgarian company shares. The EOOD is a Bulgarian legal entity regardless of who owns the shares — and Bulgarian legal entities can buy any property type without restriction.
"What if I want to live in the property myself?" The EOOD owns the property, not you. If you use it personally, this must be structured properly — either as a rental agreement between you and the EOOD, or as a benefit in kind (which has tax implications). Your accountant should advise on the correct treatment.
"Can I just buy through an EOOD now and transfer to myself later?" You can, but it triggers transfer tax, notary fees, and potential CIT on any gain. The "buy corporate, transfer personal later" strategy only makes sense if you needed the EOOD initially (e.g., for agricultural land) and the transfer costs are justified by your changed circumstances.
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Frequently Asked Questions
Can a Bulgarian EOOD buy agricultural land?
What are the tax advantages of buying property through an EOOD?
Is it better to buy property personally or through an EOOD?
What is the depreciation rate for buildings in a Bulgarian EOOD?
Does the EOOD lose the personal capital gains exemption?
Can an EOOD get a mortgage in Bulgaria?
How much does it cost annually to maintain an EOOD that holds property?
Can I live in a property owned by my EOOD?
Disclaimer: This article provides general guidance on buying property through a Bulgarian EOOD based on current legislation as of April 2026. Municipal transfer tax rates, notary fee tariffs, and annual property tax rates are set by local municipalities and may vary. Corporate income tax is 10% and dividend withholding tax is 5%, giving a combined rate of 15%. Building depreciation is capped at 4% per year for tax purposes under the Corporate Income Tax Act. This article does not constitute legal or tax advice. For personalized guidance on your specific property investment, consult a qualified Bulgarian lawyer. Last updated: April 8, 2026.