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How to Buy Property in Bulgaria Through Your Company for Tax Benefits
Thinking about buying property in Bulgaria through your company? This strategy can offer significant tax advantages, but there are key rules and considerations to keep in mind. Let’s break it down step by step!
Can Your Company Buy Property in Bulgaria
Yes! A Bulgarian-registered company can purchase land, apartments, and commercial properties.
Great for foreign entrepreneurs – bypasses restrictions on foreign ownership of land.
Тax Benefits of Buying Property Through Your Company
VAT Refund (If Applicable) – If both your company and the seller are VAT-registered, you may reclaim the 20% VAT on the purchase.
Business Expense Deductions – If used for business (e.g., office, rental income), expenses like maintenance, renovations, and utilities can be deducted.
Depreciation Allowances – The property value can be depreciated over time, reducing taxable profits.
No 10% Personal Income Tax – Avoids the 10% tax on rental income when owned personally.
Key Considerations Before Buying
Property Use – To maximize tax benefits, the property should be actively used for business (office, rental, coworking space).
Corporate Tax on Resale – Selling the property through your company is subject to 10% corporate tax on profit, which may still be lower than personal capital gains tax.
Annual Property Tax & Compliance – Your company must pay local property tax and comply with accounting regulations.
Steps to Buy Property Through Your Company
- Step 1: Ensure your company is properly registered and active.
- Step 2: Find a property and negotiate terms.
- Step 3: Conduct legal due diligence to check for encumbrances.
- Step 4: Sign a preliminary contract and make a deposit.
- Step 5: Finalize the deal with a notary and register the property.
- Step 6: Update your accounting records to reflect the new asset.
Thinking of buying property in Bulgaria through your company? Consult with an accountant and legal expert to maximize your benefits and stay compliant!
Need expert guidance? Contact ASB Accounting Services today!