Costs of buying a property in Sofia: what you pay on top of the price

When you plan your budget for buying a property, the listed price is only part of the bill. At the notary, the buyer usually also pays a local tax, a notary fee and a registration fee. Different articles quote different overall percentages - 3%, 6%, even 8% - and it's often unclear what they include. In this article we look at each of these costs separately: how much it is, how it's calculated and what the legal basis is. At the end you'll find a worked example in euro.

Who pays the transaction costs

Under Article 45 of the Local Taxes and Fees Act (ЗМДТ), the local tax is paid by the buyer, unless the parties have agreed otherwise. In practice, the buyer usually also covers the notary fee and the registration fee, but that is negotiable too. That's why it's worth stating in the preliminary contract who pays which costs, so there are no surprises on the day of the sale.

1. Local acquisition tax - 3% in Sofia

This is the largest cost. The law allows each municipality to set the tax between 0.1% and 3% of the property's value. Sofia Municipal Council has set the maximum rate of 3%, which has applied since 1 January 2020. Before that, the rate was 2.5%. Some websites and calculators still show the old rate - don't rely on them if you're buying in Sofia.

It's important to know which amount the tax is calculated on. Under Article 46 of the Local Taxes and Fees Act, the base is the agreed price, but if it's lower than the property's tax assessment value, the tax is calculated on the tax assessment value instead. For most homes in Sofia the market price is higher than the tax assessment value, so the tax is usually calculated on the sale price.

The tax is paid when the property is transferred. The notary can't complete the sale until they've confirmed that the tax has been paid (Articles 49 and 50 of the Local Taxes and Fees Act).

2. Notary fee

The notary fee is set by the Notary Fees Tariff and depends on the value of the transaction. The fee is tiered - the percentage falls as the amount rises. Since the euro was introduced, the amounts in the tariff are converted at the fixed rate. For properties worth between about €51,000 and €256,000, the range most Sofia apartments fall into, the fee is €373.50 plus 0.2% of the amount above €51,129.19. The maximum notary fee is €3,067.75.

If the notary is VAT-registered, 20% VAT is added to the fee. The tariff also provides for surcharges - for example 25% if the deed is signed outside the notary's office during working hours, and 50% outside the office after working hours. Ask the notary for the exact amount in advance so you can include it in your budget.

3. Property Register registration fee

Once signed, the notary deed is entered in the Property Register at the Registry Agency. Under Article 2 of the Tariff of State Fees collected by the agency, the fee is 0.1% of the price on which the notary deed was charged, but no less than €5.11. The fee is usually paid through the notary on the day of the sale.

Example: a €180,000 apartment in Sofia

Let's say you're buying an apartment for €180,000 and the price is higher than its tax assessment value:

- **Local tax (3%):** €5,400 - **Notary fee:** €631.24 (€757.49 with VAT, if the notary is VAT-registered) - **Registration fee (0.1%):** €180

Total: about €6,210-6,340, or about 3.5% of the property price. These are the costs set by law. Everything else depends on the specific transaction. You can work out these costs for any price with our buying costs calculator.

What isn't included in this calculation

- **The agent's commission.** It isn't set by law but agreed with the agency. Ask for the amount in writing before you start viewings. - **Mortgage costs.** If you're buying with a loan, add the bank's fees, the property valuation and the costs of setting up and registering the mortgage. Ask the bank for a full breakdown before you sign. - **Documents for checking the property.** A certificate of encumbrances, a cadastral sketch and a tax assessment certificate - each is relatively cheap, but it's worth budgeting for them. - **Building tax and waste collection fee.** After the purchase, these annual charges are owed by the buyer from the start of the month after the sale, unless the seller has already paid them.

So when you see an overall figure of 6% or 8%, it almost always includes the commission and the loan costs as well. The legally set costs in Sofia come to about 3.5% of the property price.

Why it's not worth stating a lower price in the notary deed

Buyers are sometimes offered the option of stating a lower price in the notary deed than the one actually paid, to pay less tax. Besides being illegal, this carries real risks for you. If a dispute with the seller arises later, you'll only be able to prove the price written in the documents. And if you sell the property years later, a lower purchase price means a larger taxable gain and higher income tax. The few hundred euro saved today can cost you much more later.

Conclusion

If you're buying a property in Sofia, budget about 3.5% of the price for taxes and fees, plus the commission and loan costs, if you have a loan. Ask the notary for an exact breakdown and state in the preliminary contract who pays which costs. If you'd like us to work out all the costs for a specific property together with you before you decide, contact us on 0879 826 292. We work with a limited number of clients each month so we can give each one the attention they need.