Taxes and charges related to the purchase and maintenance of real estate in Bulgaria
Income tax
At the moment a 10% income tax rate is valid in Bulgaria. This amount is paid to the state budget on a monthly basis. Until the 15th day of each month, you need to make an advance payment in the amount of 1/12 of the total amount for the previous period. At the end of the year recalculations and the amount of correction are done.
As of the 2007 for foreigners who sell one apartment per year, the income is not taxed.
Value added tax
VAT is levied on legal entities, if their income exceeds 50 000 BGN. The total VAT rate in Bulgaria is 20%, for hotels it is 7%. Sale of agricultural objects is not taxed.
Insurance of immovable or movable property
The object of the insurance may be your immovable or movable property. The immovable property includes not only residential buildings but also commercial buildings, other special function buildings and also the fencings of the building, the outside grounds, the swimming pools, etc. The movable property includes the furniture, all kind of electronic devices and appliances.
The basic insurance coverage includes loss and damage resulting from:
- Fire (incl. consequences of extinguishing thereof);
- Lightning, explosion or implosion, aircraft, parts or cargo therefrom;
- Natural calamities (incl. storm, hail, torrential rain, flood, snow and ice pressure, freezing, falling trees, branches, or other external objects following storm or hail);
- Water supply and sewerage damages;
- Landslide or collapse of earth mass, earthquake, short circuit and/or over-voltage, malicious acts by third parties, loss and damages resulting from transportation upon change of address;
- Removal of debris, relocation, protection and storage of insured property and/or loss of rent;
- Glass breakage with option for ‘All Risks’ basis;
- Third party liability following insured event (incl. damages caused to third parties as a result of fire, drenching as a consequence of extinguishing thereof or of flooding of the site insured which the Policyholder is obliged to compensate on the basis of tort);
- Breaking and entering;
- Armed robbery, vandalism.
The insurance premium is set on the basis of the insurance agency tariffs and depends on the type of the property insured, its insurance price, the agreed size of the insurance coverage and the specific risk factors.
Healthcare and medical insurance for foreigners in Bulgaria
Medical insurance is a very important issue, especially when it comes to a long-term or permanent stay in Bulgaria. All foreigners residing or staying in Bulgaria for a long term (over 3 months) should be advised that it is necessary to make a medical insurance in Bulgaria if they haven’t got one from their home country that covers medical risks in Bulgaria.
This means that they have 2 options – either to make a medical insurance in the home country, which should cover Bulgaria, or they can make insurance in Bulgaria. There are a number of global insurance companies which operate in Bulgaria and offer very good conditions for medical insurances.
It should be noted that for a short-term stay in Bulgaria another type of medical insurance can be made – very often this type of insurance is also covered by the bank if people pay for their trip abroad by credit card and it is not necessary to make an additional insurance – this can be checked with their banks or insurance brokers.
Our Insurance advisors from INSURANCE BULGARIA – a company, which is a partner of BULGARIAN PROPERTIES – have prepared some information about the available insurance options:
- A compulsory medical insurance for people staying in Bulgaria for 3 months or more – valid only on the territory of Bulgaria for people up to 70 years of age. This insurance covers the following risks:
- medical expenses due to an accident or an acute disease
- repatriation due to an accident or an acute disease
- urgent dental care
- death due to an accident
Transport expenses for taking to a hospital or moving from one hospital to another are also included in the insurance. The insurance will cover all the expenses for a hospital stay and medications needed due to the above described events.
