Higher tax assessments on Bulgarian property: what changes and who pays

Bulgaria's parliament is considering a proposal to revalue property tax assessments in three steps: raising baseline values by 30 percent in 2027, then by 35 percent in each of 2028 and 2029, effectively doubling them by the end of that cycle. The changes would be written into the Law on Local Taxes and Fees, Capital reports. The move would be the first such update in roughly two decades, affecting owners of flats, houses, and holiday properties across the country.

A 20-year freeze

Bulgaria introduced property tax assessments about thirty years ago as an administrative stand-in for real market values, covering buildings, land, and agricultural plots. They were last updated between 2007 and 2009. Since then, successive governments kept them unchanged, largely for electoral reasons, as any increase would affect a large number of voters. The gap between assessed and market values has grown steadily. Market prices have risen by 157 percent over that period, while assessed values have fallen as far as nine times below market price for older buildings and around two times below for newer ones, according to Capital. One investor quoted by Capital paid 1.5 million euros for a plot in central Sofia that carried a tax assessment of just 16,000 euros. In 2025, Bulgarian municipalities collected roughly 244.8 million euros from property taxes. Across the EU, property taxes account for an average of 4.5 percent of total tax revenue; in Bulgaria the figure is 2.1 percent.

The stated case for the reform is that more accurate assessments would direct more revenue into municipal budgets, which fund roads and local infrastructure. The mayor of Pomoriye, cited by Capital, told Bulgarian National Radio that residents should expect the higher revenue to return to them in the form of streets and a better urban environment.

What it means in practice, and why diaspora owners should pay attention

The reform will affect anyone who owns property in Bulgaria, but Capital notes the impact will be felt more sharply by people holding more than one property. For diaspora Bulgarians keeping a home in the country, or for foreign buyers who purchased apartments during the early-2000s boom, annual property tax bills will rise in three steps starting in 2027. Municipalities have the legal option to lower their own tax rates to soften the impact, but whether they will do so before local elections in 2027 is unresolved.

Rents are also expected to rise as landlords factor in higher holding costs. Purchase costs will increase incrementally because the assessed value is also the base for transfer taxes and inheritance tax. The assessed value is set administratively and the rate is applied by municipalities, a system that works similarly to council tax in the UK or the Grundsteuer in Germany.

The broader fiscal context is relevant. Bulgaria is simultaneously debating a proposed 33-percent windfall-profits tax on certain sectors for 2027, a measure that has drawn public disagreement between Finance Minister Galab Donev and the governor of the Bulgarian National Bank, as Capital analyses. For property owners, the assessment reform is the measure most likely to produce a larger municipal tax notice, starting in 2027.