How to Buy Property in Bulgaria Through Your Company to Access Tax Benefits?
Purchasing property in Bulgaria through a company can offer significant tax benefits. To take advantage of them, you must follow certain rules and consider key factors. See the steps and advantages of this strategy! In this article by T&G Consulting, you will learn more on the topic.
Can Your Company Buy Property in Bulgaria?
Yes, a Bulgarian company can acquire land, apartments, and commercial premises. Key advantages:
- Enables foreign entrepreneurs to bypass restrictions on land ownership
- Facilitates real estate investments for business or rental purposes
Tax Benefits When Purchasing Property Through a Company
- VAT Refund – If both the company and the seller are VAT-registered, you can reclaim 20% of the purchase price
- Deductible Business Expenses – If the property is used for business (e.g., office, rental), expenses such as maintenance, repairs, and utilities may be deducted
- Depreciation Deductions – Reduce taxable profit by depreciating the property over time
- Avoidance of 10% Personal Income Tax – Rental income received through a company is taxed at the corporate level, so the 10% personal income tax does not apply
Important Considerations Before the Purchase
- Property Usage – To qualify for tax benefits, the property must be actively used for business purposes
- Taxation on Resale – When selling the property through a company, a 10% corporate tax on the profit applies, which may be more favorable than personal capital gains tax
- Annual Property Tax – The company must pay the local property tax and comply with accounting requirements
Steps to Purchase Property Through a Company
- Company Registration – The company must be active and have valid legal documents
- Select Property and Negotiate Terms – Define the parameters and agree on the price
- Legal Due Diligence – Ensure the property has no encumbrances or legal issues
- Sign Preliminary Agreement and Pay Deposit – Officially settle the conditions
- Finalize Deal Before a Notary – Transfer ownership and register the property
- Accounting Entry – Record the property as an asset in the company’s books
Planning to Purchase Property in Bulgaria Through a Company? Consult an accountant to get the maximum tax benefits and remain compliant with local regulations. Get precise financial guidance with T&G Consulting.com. Contact us today!
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❗ This content provides general information and does not constitute tax, accounting, or legal advice. Each situation is different and should be reviewed individually.