Friday, 25 September 2026
Bulgaria is preparing a broad overhaul of its tax system for 2027–2029 that includes higher property tax assessments, changes to VAT rules for real estate transactions and a temporary levy on exceptional corporate profits. The Ministry of Finance expects the package to generate approximately €1.4bn in additional revenue.
One of the measures with the greatest significance for the property market is a planned increase in the assessed values used to calculate real estate taxes. The adjustment would be introduced over three years, with the government intending to double the assessment base by 2029. The changes are scheduled to begin with a 30% adjustment in 2027, followed by further increases in 2028 and 2029. Charges for household waste would not be included in the measure.
The government is also proposing changes to VAT rules affecting property transactions. Taxable supplies involving land and buildings would become subject to mandatory VAT registration, a step intended to reduce opportunities for avoiding VAT obligations in real estate transactions. Separately, the general turnover threshold requiring businesses to register for VAT would rise to €75,000.
Another major component is a temporary additional tax on profits in selected industries during 2027. Banks, insurance and reinsurance companies, telecommunications businesses, currency exchange operators, short-term lenders and food retailers operating at least five outlets would fall within its scope.
For companies affected by the measure, average profits recorded between 2020 and 2025 would provide the starting point for determining the additional liability. That average would be increased by 20%, with profits earned in 2027 above the resulting threshold subject to a 33% tax. Companies would be required to pay 90% of the expected liability during 2027 rather than waiting for the final annual assessment.
The package would also change several elements of corporate taxation. Businesses would be allowed to carry tax losses forward for ten years instead of five, although the amount offset in an individual year would be limited to 70% of the relevant financial result. The minimum value at which an item is treated as a fixed tangible asset for corporate tax purposes would increase from BGN 700 to €1,000.
Bulgaria is additionally preparing to introduce electronic invoicing for domestic transactions from 2028, once the National Revenue Agency’s supporting digital infrastructure is operational. Other proposals cover gambling taxation and licensing, electronic food vouchers and a new excise charge on vehicles with engines exceeding 250 kW.
The planned reforms would have implications extending beyond corporate taxation into property ownership, development and investment. In particular, the gradual increase in real estate tax assessments and tighter VAT treatment of transactions involving land and buildings could raise costs for parts of the property market from 2027, while the wider package would increase the government’s tax take across several sectors over the following three years.
Source: CMS
