🌿In summary: Rental property taxation and taxes in Bulgaria. Owning and managing real estate assets in Bulgaria is highly optimized by an exceptionally light and straightforward tax framework in 2026. Local annual property taxes (Danak Imot) and household waste taxes (Taksa sbit) remain negligible, rarely exceeding €50 to €150 for a standard apartment since they are calculated on municipal assessed values rather than real market prices. Furthermore, rental income generated by individual investors benefits from a 10% flat tax rate combined with an automatic 10% business expense allowance, reducing the effective income tax rate to just 9% of gross rents.
Bulgaria’s real estate appeal isn’t solely based on low purchase prices or strong rental yields. The tax framework established by the Bulgarian state is a compelling argument for international investors. To maximize the net profitability of your real estate investment in Bulgaria, it’s essential to understand how property tax works in Bulgaria, as well as the taxes related to owning and managing your real estate assets.
Here is the complete guide to Bulgarian real estate taxation for 2026.
Property Tax in Bulgaria: Extremely Low Rates
Unlike in France, where local taxes weigh heavily on homeowners’ budgets, property tax in Bulgaria (locally called Danak Imot) remains negligible.
A Favorable Tax Base
Property tax is not calculated based on the property’s actual market value, but on its assessed value as determined by the municipal administration (the tax assessment, or Danachna Otsenka). This value is generally much lower than the actual market price of the property.
Rates set by municipalities
The Bulgarian Tax Code sets a national range, but allows each municipality to determine its own rate. In 2026, this rate varies between 0.1% and 0.45% of the property’s assessed value. In Sofia, Varna, or Burgas, the annual property tax for a standard two- or three-room apartment rarely exceeds €50 to €150.
The household waste tax: The second local tax
In addition to the basic property tax, every property owner in Bulgaria must pay the household waste tax (Taksa sbit).
It is collected at the same time as the property tax and calculated using the same method (a percentage of the property’s assessed value, or based on the volume of waste for commercial premises). Its rate also varies depending on the municipality, but its cost remains very marginal for a residential investor.
Taxation of Rental Income: The Advantage of the 10% Flat Tax
If you buy real estate in Bulgaria to generate rental income, your earnings will be subject to income tax. Here again, the system is remarkably simple and efficient.
Calculating Net Tax
Rental income received by individuals is taxed at the single flat tax rate of 10%. Even better, the Bulgarian state automatically grants you a 10% allowance for business expenses (without you having to provide invoices for work or management).
The calculation is as follows:
- You receive €10,000 in annual rent.
- The tax authorities deduct a 10% allowance (€1,000).
- The taxable base is €9,000.
- You pay 10% tax on this amount, or €900.
The effective tax rate on your gross income is therefore only 9%.
Key takeaways for your property owner budget:
The low property tax burden in Bulgaria, combined with very moderate rental income tax, allows you to maintain a net return very close to the gross return. This minimal tax friction makes Bulgaria one of the best investment havens in Europe for investors in 2026.