Bulgaria is overhauling property tax assessments for the first time in two decades

Property owners in Bulgaria face the prospect of tax bills rising by as much as 30 percent as the government prepares to rewrite the formula used to calculate official property valuations for the first time in roughly 20 years.

A working group inside Bulgaria's Ministry of Finance is drafting a new methodology for calculating property tax assessments, according to 24 Chasa. These assessments form the base for two levies every property owner pays: the building tax and the household-waste fee. Both Standart and 24 Chasa report that the current figures have not been meaningfully revised for roughly 20 years, leaving them far below actual market prices.

Two decades without an update

The reform became public after Prime Minister Rumen Radev reportedly pledged the change on 18 June at the anniversary meeting of the National Association of Municipalities. The head of that association, Veliko Tarnovo mayor Daniel Panov, argued that the gap between tax valuations and real-world prices has created a serious imbalance, penalising owners of newer buildings while leaving luxury properties in fast-growing city districts lightly taxed. Those districts were largely open fields 20 years ago and were assessed accordingly. 24 Chasa reports that Radev agreed and raised the possibility of progressive taxation linked to the number of properties a person owns.

What the numbers look like

Under current law, municipal councils set the building-tax rate somewhere between 1.5 and 4.5 per mille of the official tax assessment. Standart reports that most municipalities apply rates in the 2-to-3 per mille range. The underlying problem is that the assessments themselves are well below market value, so even a standard rate produces little revenue for local councils.

24 Chasa reports that once the new methodology is applied, some homeowners could see their tax bill rise by up to 30 percent. Progressive Bulgaria MP Stefan Belchev has said the update is coming this year, and the reform is targeted for completion within 2026.

What this means for diaspora property owners

For Bulgarians abroad who kept a flat in Sofia or inherited a house in a smaller town, higher tax assessments will directly raise annual building-tax bills and may affect how properties are valued for inheritance, sale, or notarial transactions. Those who rely on a local accountant or municipality to manage Bulgarian property should ask them to flag any correspondence about reassessment.

Mayors across the country broadly support the reform, as it would restore municipal income that has been eroding for two decades. The details of the new formula are still being written.