Renting Out Property in Bulgaria as a Foreigner: Airbnb, Long-Term Lets & Tax (2026)

If you own a Sofia flat, a Plovdiv apartment, a Sunny Beach studio or a Bansko ski chalet and you let it out, Bulgaria taxes you on three layers — income tax, VAT and a small municipal tourist tax — under two distinct regulatory regimes depending on whether the letting is long-term residential or short-term tourist. The numbers are friendly: an individual landlord pays an effective rate of about 9 percent on long-term rental, a categorised tourist apartment runs on the 9 percent reduced VAT rate, and the operational compliance is modest. But the regulatory map is real, and three traps catch foreign owners every season — failing to categorise a short-term let under the Tourism Act, ignoring the Art. 97a VAT registration triggered by Airbnb and Booking invoices, and assuming long-term and short-term let income is taxed the same way. This guide is the practitioner's view of all three.

The audience is foreign owners of Bulgarian property — EU and non-EU — who already own a Bulgarian apartment, house or holiday unit and are now operating it as a let, or planning to. For the purchase-side legal framework see our companion piece on buying property in Bulgaria as a foreigner. This article picks up where that one ends: the day the property is yours and the first guest is booked.

The Two Regulatory Regimes — Long-Term vs Short-Term

Bulgaria's rental landscape splits into two distinct legal regimes that the foreign owner has to know before publishing the first listing or signing the first long-term lease.

Long-term residential lease — Obligations Act

A lease to a natural person for residential purposes, typically for periods longer than thirty days, is a standard rental contract under the Bulgarian Obligations and Contracts Act. No Tourism Act registration is required, no municipal categorisation, no tourist tax. The rental income is taxed on a personal or corporate level depending on the owner; the supply is VAT-exempt because residential lets to natural persons for residential purposes are outside the VAT base.

Short-term tourist accommodation — Tourism Act

The moment a property is offered as a guest apartment or guest room — Airbnb, Booking, Vrbo, or any platform or direct booking for periods typically under thirty days, often combined with cleaning, linen and check-in services — it falls under the Tourism Act. The property must be categorised under Art. 113 of the Tourism Act with the relevant municipality, the host is treated as carrying out hotel-keeping activity, the supply attracts the 9 percent reduced VAT rate (if categorised) instead of the 20 percent standard rate, and the municipal tourist tax applies per overnight.

Letting a Bulgarian flat? We tell you which regime fits in 15 minutes — free.

Income Tax on Rental Income

Bulgarian income tax on rental is friendly by EU standards. The rate depends on the structure that owns the property.

Individual landlord

Under the Personal Income Tax Act (ЗДДФЛ), rental income received by an individual is taxed at the 10 percent flat personal income tax rate with a 10 percent statutory expense deduction — an effective tax of about 9 percent on gross rent. The deduction is automatic; no documentation of real expenses is needed for the statutory allowance. The individual files an annual personal income tax return with the National Revenue Agency by 30 April of the following year. Where the rental amount is paid by an enterprise (a Bulgarian company tenant), the company withholds the tax monthly; where it is paid by another individual (a private tenant), the landlord pays through quarterly advance instalments.

EOOD-owned rental property

Where the property is owned by a Bulgarian EOOD or OOD — necessary in some configurations for non-EU buyers acquiring land-bearing property, and often chosen by EU buyers for liability and scaling reasons — rental income is taxed at the 10 percent corporate income tax on profit (gross rent less actual deductible expenses including depreciation, maintenance, agency fees, property management, utilities and refurbishment), with the after-tax profit attracting a 5 percent dividend tax on distribution to the owner. The 15 percent combined rate is higher than the individual 9 percent on a gross basis but the deduction of real expenses, the ability to retain profit inside the company for reinvestment, and the limited-liability shield mean the EOOD often wins for higher-yield or multi-unit operations.

Individual vs EOOD — Side by Side

The honest practitioner answer for most foreign owners with a single Sofia apartment or a single coastal flat is individual ownership. The honest answer for non-EU owners of houses with gardens, owners of two-plus units, or active STR operators with material operating expenses is EOOD. We model both before the structure is locked in.

One flat or three? We will tell you which structure fits — free.

Tourism Act Categorisation — Mandatory for Airbnb

This is the regulatory entry ticket for short-term let. Without it the operation is outside the Tourism Act framework, and the consequences cascade into the tax position.

What categorisation gives you

• Class B classification as a guest room (стая за гости) or guest apartment (апартамент за гости) under the simplified procedure of the Tourism Act;
• Access to the 9 percent reduced VAT rate on the accommodation supply;
• Lawful inclusion in the Unified Tourism Register and the right to operate the activity legally;
• The legal basis to collect and remit the municipal tourist tax.

The application process

1. File an application with the municipality where the property is located — Sofia Municipality, Plovdiv, Burgas, Nessebar, Bansko, etc. The application includes property documents, the floor plan, photos of the unit, the operator's identification and the prescribed state fee.
2. Initial decision (preliminary certificate) by the municipality, usually within a defined statutory timeline.
3. Inspection at the property by the municipal commission against the categorisation requirements (room sizes, equipment, sanitary facilities, fire and safety compliance for the relevant class).
4. Final categorisation certificate issued and the property entered into the Unified Tourism Register.
5. Display obligations — the categorisation certificate and the operator's contact details must be displayed at the property and on any platform listing.

For a single guest apartment in a residential block, the simplified procedure is typically a matter of weeks rather than months. We assemble the application file and run the municipality interaction; the client provides the property documents and signs.

VAT — the 9% Reduced Rate and the Art. 97a Trap

The Bulgarian VAT Act applies two different rates to accommodation depending on categorisation status — and a separate registration regime for hosts using foreign platforms.

The 9% vs 20% VAT question

• Categorised tourist accommodation (guest rooms or guest apartments under the Tourism Act) — 9 percent reduced VAT on the supply to the guest.
• Uncategorised short-term accommodation — 20 percent standard VAT, because the supply does not qualify for the reduced-rate carve-out.
• Long-term residential lease to a natural person for residential purposes — VAT-exempt under the Bulgarian VAT Act. No VAT charged, no input VAT deducted.

The 9 percent rate is a material advantage; it is also one of the reasons the Tourism Act categorisation is worth doing properly.

The Art. 97a registration trap

This catches almost every Airbnb and Booking host on first reading. Under Art. 97a of the Bulgarian VAT Act, a Bulgarian recipient of cross-border B2B services from an EU-established supplier must register for VAT regardless of turnover. Airbnb Ireland and Booking.com (Netherlands) invoice their platform commissions to the Bulgarian host as intra-EU B2B services — and Art. 97a registration is triggered on the first euro of platform fees. The host then self-assesses Bulgarian VAT on the platform fees under reverse charge in the monthly VAT return.

Important points:

• Art. 97a registration is a special, limited regime — it is not the same as a full VAT registration above the standard EUR 51,130 threshold. Among other things, an Art. 97a registrant does not generally charge VAT on Bulgarian-source supplies and has limited input-VAT deduction rights.
• Registration is due once you start receiving platform-fee invoices — not "when you hit a turnover number".
• Once monthly turnover crosses the standard EUR 51,130 threshold (rolling 12-month basis), standard VAT registration takes over and the operator charges 9 percent on the accommodation supply.

The Municipal Tourist Tax

Each Bulgarian municipality sets and collects a separate tourist tax (туристически данък) per overnight stay in registered tourist accommodation. The legal basis is in the Local Taxes and Fees Act, with the rate set annually by each municipal council within statutory bands. The amounts are small — the local equivalent of fractions of a euro up to a few euro per overnight, varying by municipality and by the categorisation class of the property.

Practical points:

• The host collects the tourist tax from the guest as a separate line on the invoice or stay confirmation;
• The host remits the tax to the municipality on the statutory cycle (typically monthly or quarterly);
• The tax is separate from VAT, separate from personal or corporate income tax, and separate from social-security contributions;
• The municipality may inspect the records of overnight stays against the Unified Tourism Register and the platform's stay data, which the platforms now report to the NRA under DAC7.

DAC7 and CESOP — What the NRA Already Knows

Two EU reporting regimes have changed the audit posture of Bulgarian short-term rental in the last two years.

DAC7 — digital platforms report hosts

Under Council Directive (EU) 2021/514, EU digital platforms — including Airbnb, Booking, Vrbo and others — report sellers' and hosts' income data to tax authorities each year. The Bulgarian National Revenue Agency receives the Bulgarian data and can reconcile against the host's annual income return. From a host's perspective, DAC7 does not create a new tax — it makes under-reporting structurally harder.

CESOP — payment service providers report cross-border payments

Under Council Directive (EU) 2020/284, EU payment service providers (Stripe, PayPal, Wise and the major banks) report cross-border payments to tax authorities. In Bulgaria the rules took effect on 1 January 2024; the reporting threshold is more than 25 cross-border payments to a single payee per calendar quarter. Bulgarian STR hosts who receive payouts from Airbnb or Booking are within scope; the data lands at the NRA quarterly. For more on the platforms side see our piece on Wise, Stripe and PayPal accounting in Bulgaria.

A Foreign Owner's Map of Bulgarian Rental Markets

Bulgaria is several rental markets in one country. Each carries its own seasonal profile, yield range, regulatory texture and tax considerations.

Sofia — urban year-round

The capital is the largest year-round rental market. Long-term residential let dominates because of the resident population — students, young professionals, expat tech workers. STR works in central districts (Centre, Lozenets, Oborishte, Doctor's Garden) and is more seasonal than the coast — corporate stays, weekend tourism, conference visitors. The Sofia Municipality is well-organised; categorisation, tourist tax and inspection are routine.

Plovdiv — heritage city, growing market

Plovdiv's Old Town and central districts have grown into a serious STR market driven by short-stay heritage tourism. The market is smaller than Sofia and the regulatory rhythm is similar. Yields can be attractive for well-located units; off-season demand is real but lower than Sofia.

Black Sea coast — seasonal STR

Sunny Beach, Nessebar, Pomorie, Sozopol, Burgas and the Varna region together are the largest STR market by volume. The market is intensely seasonal — June to September peak, with shoulder months in May and October — and yields are driven by season-long occupancy and average daily rate. Coastal foreign-owned apartments often combine an STR season with off-season closure or low long-term tenancy. Tourist tax in coastal municipalities is the most visible; categorisation is mandatory and routinely enforced.

Ski resorts — winter STR

Bansko, Borovets and Pamporovo are the Bulgarian ski STR cluster. The winter season is the inverse of the coast — December to March peak — and Bansko in particular has become a year-round destination on the back of its digital nomad scene. Categorisation, tourist tax and the Tourism Act apply in the same way as elsewhere.

Veliko Tarnovo, Sozopol old town, Nessebar UNESCO core — niche

Smaller niches with strong heritage and limited supply. Some carry additional restrictions because of UNESCO or national-heritage classifications.

The right market for a given owner depends on lifestyle, capital, season tolerance and yield target. We do not give investment recommendations; we structure the ownership, set up the operation, and run the tax and legal compliance behind it.

Sofia flat, Sunny Beach studio or Bansko chalet? Each has its own rhythm — ask us.

How We Set Up a Bulgarian Rental Operation

Four blocks of work, regardless of which market or which letting regime.

1. Structure choice. Individual vs EOOD — modelled against owner profile, number of units, type of property (land-bearing or apartment only), nationality (EU vs non-EU), expected income and the long-term plan (sell vs hold, reinvest vs distribute).
2. Regulatory entry. For STR — Tourism Act categorisation at the relevant municipality, entry into the Unified Tourism Register, setup of the tourist-tax cycle with the municipality. For long-term let — drafting of the residential lease aligned to the Obligations and Contracts Act.
3. Tax registration. NRA registration for the chosen structure; Art. 97a VAT registration as soon as the first Airbnb or Booking platform invoice is received; standard VAT registration if and when turnover crosses the EUR 51,130 threshold; setup of the monthly bookkeeping and VAT return cycle with our accounting partners.
4. Recurring operation. Platform reconciliation (Airbnb / Booking / Vrbo against the bank), monthly VAT returns, quarterly or monthly tourist-tax remittance, annual income tax return, end-of-year reconciliation against the NRA's DAC7 and CESOP data feeds.

Common Mistakes Foreign Owners Make

1. Listing on Airbnb without Tourism Act categorisation

It is not "informal" — it is operating outside the mandatory Tourism Act framework. The fix is filing the application with the municipality. Get it done before the first booking is taken.

2. Ignoring Art. 97a VAT registration

The "I am below the EUR 51,130 threshold" intuition is wrong here. Reverse-charge VAT on platform fees is due from the first invoice. Register at the start.

3. Mixing long-term and short-term in the same tax return without separating

The two regimes are taxed differently — VAT-exempt long-term residential vs 9 percent VAT short-term. Mixing them in the books makes the VAT return wrong, the income tax return defensible but uglier, and an audit slower.

4. Forgetting the tourist tax

Small money, big audit signal. A municipality that finds you did not remit tourist tax for a year of operation reads the rest of the file with prejudice.

5. Buying land-bearing property in your own name as a non-EU citizen

This is a purchase-side issue but it lands on the rental side too. Non-EU buyers acquiring property that includes land typically need a Bulgarian EOOD as the owner — see the companion buying property in Bulgaria as a foreigner guide. Where the purchase structure was wrong, the rental structure inherits the problem.

Frequently Asked Questions

Disclaimer: This article provides general information about the Bulgarian rental and short-term-accommodation regime as of 2026. It does not constitute individual legal, tax or accounting advice. Specific tourist tax rates and the precise statutory minimum/maximum insurable bases are set annually at municipal and national level and must be applied to live figures at the time of structuring. Last reviewed: May 22, 2026.