Tax lawyer for property sellers in Pomorie

Selling property in Pomorie: what tax risks do you face?

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You’ve decided to sell your holiday apartment in Pomorie. The real estate agent has found a buyer, the preliminary contract (предварителен договор) is signed, and you're expecting the notary appointment next month. But then you start wondering — are there any taxes due on the sale? Will you need to declare anything to the National Revenue Agency? Could you be selected for a tax audit?

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These are common concerns we hear from English-speaking property owners across the Pomorie region. Many clients contact us seeking tax lawyer consultations in Pomorie only after receiving unexpected letters from the tax authorities or discovering they’ve triggered a tax liability after a sale. Whether you're an individual seller or acting through a company, Bulgarian tax law imposes specific reporting and payment obligations that can become serious legal risks if not handled properly.

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Do I owe taxes when selling my property in Bulgaria?

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Yes — in many cases, selling real estate in Bulgaria creates a tax obligation. The key question is whether the income from the sale is taxable, and if so, under what conditions.

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Under Article 33(1) of the Bulgarian Personal Income Tax Act, capital gains from the sale of real estate are exempt only if:

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“The property has been owned for more than three years, if it concerns one residential property, or more than five years, if it concerns more than one.”

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This means that if you sell a second property in Pomorie within five years of purchase, the gain is generally taxable.

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For foreign nationals and non-residents, the situation can be even more complex — especially if Bulgaria is not your primary tax residence, or if the funds from the sale are kept abroad. In these cases, the Bulgarian authorities may treat the income as part of undeclared income, potentially triggering tax audits and investigations.

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We assist clients by:

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• Reviewing the ownership history and use of the property
• Calculating any taxable gain and available exemptions
• Filing the necessary annual tax declarations
• Advising on legal ways to reduce or defer tax liability 

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If you're unsure whether your sale triggers liability, we offer full representation before the tax authorities to clarify your position and prevent penalties.

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Can I appeal a tax assessment after selling a property?

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Yes, if the National Revenue Agency (NRA) issues a tax notice or assessment that you believe is incorrect — for example, overestimating your sale income or denying an exemption — you have the right to appeal.

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According to Article 117 of the Bulgarian Tax and Social Insurance Procedure Code (TSIPC):

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“An administrative act may be appealed within 14 days of its notification before the authority that has issued it or before a higher administrative authority.”

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This short deadline is crucial. Many foreign sellers in Pomorie miss opportunities to challenge assessments because they are unaware of the time limits or the procedure.

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At BSLC, we support clients in:

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• Appealing tax assessments issued after real estate transactions
• Preparing formal objections with legal and factual arguments
• Gathering the documentation to prove market values, acquisition costs, and exemption eligibility
• Participating in administrative and court proceedings, including tax penalty appeals in Pomorie

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In some cases, local tax offices may attempt to levy fines for late declarations or insufficient documentation. Prompt legal action can prevent these from becoming enforceable debts.

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What if I sold the property through a company?

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Many foreign owners choose to hold property in Bulgaria through a limited liability company (OOD) for inheritance or investment purposes. However, this changes the tax treatment significantly.

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If a company sells real estate, the income is subject to Bulgarian Corporate Income Tax, currently at a flat rate of 10%. Additionally, if you’re charging or receiving rent prior to the sale, or if the property is subject to VAT, you may face VAT registration and disputes under the Value Added Tax Act.

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Under Article 96 of the Value Added Tax Act:

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“Every taxable person shall be obliged to register for VAT if the taxable turnover for a period not exceeding twelve consecutive months exceeds BGN 100,000.”

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If your company rents the property or conducts additional business activities in Pomorie or nearby areas like Burgas or Nessebar, VAT registration may be mandatory — even before sale.

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We help business clients with:

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• Full corporate tax compliance in Bulgaria
• Evaluating whether VAT applies to the sale or rental income
• Preparing correct invoicing and VAT declarations
• Defending against audits when turnover or VAT compliance is questioned

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Importantly, failing to properly report company sales can trigger serious obligations — including representation in tax fraud investigations in Pomorie if authorities suspect intentional avoidance.

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What are the risks of not declaring the sale?

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Failing to declare a property sale can lead to a finding of undeclared income, even if the transaction was notarised and recorded in the Registry Agency. Bulgarian law requires both parties to declare taxable transfers in their annual income reports or corporate accounts.

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The consequences can include:

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• Penalties equal to up to 25% of the unpaid tax
• Late interest charges
• Random or targeted tax audits and investigations
• Risk of being classified as engaging in “continuous economic activity” (which can trigger VAT obligations)

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In cross-border scenarios, things become even more delicate. Bulgarian sellers residing in the UK, Germany or the US often ask about cross-border tax planning to minimise exposure in both jurisdictions. We regularly support such clients by coordinating with home-country accountants and ensuring the Bulgarian transaction is properly reflected in both systems.

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Conclusion

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Selling property in Pomorie might feel like a simple transaction, but the tax implications can be surprisingly complex — especially for foreign owners and companies. Whether you need assistance with preparing a declaration, appealing a revenue decision, or navigating an audit, our team at BSLC provides clear, experienced tax counsel across Pomorie and the surrounding Black Sea region.

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If you’re planning — or already involved in — a property sale and want legal certainty, don’t hesitate to contact us for expert, practical support.

Can the Bulgarian tax authorities audit a property seller years after the sale?

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A British national who owned an apartment near the Pomorie beach sold the property in 2020 and relocated to Germany. In 2023, he received a notice from the Bulgarian National Revenue Agency (NRA) requesting additional documentation and opening a retrospective tax audit relating to the sale. The client was surprised, believing that all taxes had been properly handled at the time. He now faces the burden of proving that the sale complied with all applicable tax obligations, despite having left Bulgaria over two years earlier.

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Under the Bulgarian Tax and Social Insurance Procedure Code, the NRA may initiate tax audits for up to five years after the end of the year when a tax obligation became due. This statute of limitations can be interrupted or extended in certain cases — for example, if there was no declaration filed or if procedural errors are found. For property sellers, this means that a transfer registered years ago may still be open to investigation, especially when the tax exemption thresholds are not clearly met.

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Our team assists clients in responding to retrospective audits, particularly where sellers are no longer residing in Bulgaria. We review the transaction history, compile supporting evidence (such as notary deeds, bank transfers, and valuation reports), and represent clients before the NRA. Where needed, we apply for legal suspension of enforcement measures under Article 150 of the Bulgarian Tax and Social Insurance Procedure Code. If appeals become necessary, we act in both administrative and judicial proceedings. For property disposals, such audits often focus on underreported capital gains or untaxed short-term sales.

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Do I need to pay tax if I received the property as a gift from a relative?

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A client living between Nessebar and Pomorie inherited a seaside house from her aunt, who had gifted it to her through a notary deed (нотариален акт) before passing away. Two years later, the client decided to sell the house. Her real estate broker informed her that a capital gains tax may apply, since the property was acquired by donation and then sold within a short period. The client had assumed that receiving the property as a gift would exempt her from all related taxes.

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Gifts and inheritance are treated separately under Bulgarian tax law. While gifts from direct relatives are typically not taxable at the time of transfer, subsequent sales of such properties may still trigger a tax obligation. The Personal Income Tax Act, under Article 33, provides exemptions only when the property has been held for more than three years (for a single property) or five years (for multiple properties). Since the donation was recent, the property was not exempt from capital gains tax at disposal.

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We advise clients on planning the timing of property sales acquired through donations or inheritances. In this case, we calculated the capital gains tax base using the donation value entered in the notary deed. We then filed a complete annual personal income tax return on the client’s behalf (Article 50 of the Bulgarian Personal Income Tax Act). Where applicable, we also consider whether the donor’s acquisition cost can be carried over to reduce the taxable gain. Advice in these cases also requires a review of potential foreign tax liabilities, and we often coordinate with UK or German tax advisors under applicable double taxation agreements.

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How does tax residency affect the reporting of property sale income?

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A French national who had lived intermittently between Burgas and France sold a commercial building in central Pomorie through her Bulgarian company. She considered herself a French tax resident and did not include the sale proceeds in her Bulgarian tax filings. Months later, her company was contacted by the Regional Tax Office regarding a suspected case of undeclared corporate income and possible withholding tax issues relating to distributions.

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Determining tax residency is central to handling property-related income. Under Bulgarian tax rules, both individuals and legal entities must report worldwide income if they are considered tax residents. The Bulgarian Corporate Income Tax Act applies to companies registered in Bulgaria irrespective of the shareholder's domicile. For individuals, criteria under Article 6 of the Personal Income Tax Act include duration of stay, permanent address registration, and centre of life interests — any of which can make someone liable in Bulgaria for taxation purposes.

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We provide tax residency determination services, especially where property sales involve foreign nationals or cross-border elements. In corporate cases like this, we assess whether income qualifies as part of regular business activity and ensure it is reported under annual financial statements and profit declarations. Where applicable, we also address withholding tax issues if income has been transferred abroad. We further assist with queries arising under bilateral double taxation agreements, most notably when clients reside in France, the Netherlands or the UK but conduct business in Pomorie.

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What tax law services does BSLC provide to property sellers in Pomorie?

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We provide end-to-end legal representation to individuals and businesses selling real estate across the Pomorie region, including specialised assistance in property-related tax matters. Property disposals are subject to scrutiny under national tax law and may trigger multiple obligations – from VAT registration to annual declarations, capital gains taxation, and even audits or penalties.

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Our tax lawyers assist clients in Pomorie with:

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• Legal analysis of capital gains tax exposure under the Personal Income Tax Act  

• Preparation and filing of income tax returns for sales of residential and commercial properties  

• Review and resolution of real estate tax disputes in Pomorie, including retroactive audit defence  

• Guidance on cross-border implications using applicable double taxation agreements  

• Strategic support for sellers engaged in corporate restructuring or using holding entities  

• Compliance planning for digital professionals through customised tax planning for digital nomads  

• Formal legal opinions on tax residency and its effect on real estate income

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Whether you're selling a vacation apartment, inherited property, or commercial unit, we ensure that your tax obligations in Bulgaria are correctly handled, reducing legal risk and maximising compliance under both domestic and international standards.