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There is no ownership structure that always produces the lowest tax. Personal ownership is often easier to administer for one apartment let as a long-term home. A company may fit better when the property forms part of a genuine business and profit will remain in that business for further investment. The answer still depends on use, finance, VAT status and the eventual sale.
Make the decision before signing a reservation or preliminary contract. A property bought personally does not become company property through an internal accounting entry. A later sale, contribution in kind or other method of transfer has its own legal and tax treatment and must be modelled separately.
The tax rules and primary sources in this article were checked on 19 August 2026. It addresses a typical Bulgarian-resident individual and a Bulgarian company. Short-term accommodation, systematic property trading, related parties, private use and cross-border structures can change the result.
Begin with the real scenario
Before comparing rates, write down precisely how the property will be used. One apartment let long-term to a household and sold after ten years is not the same model as a portfolio managed with staff, advertising and regular reinvestment.
Who will use the home also matters. A company name on the deed does not turn its owner's private expenditure into a business expense. The Corporate Income Tax Act specifically regulates benefits in kind where an asset has mixed business and private use, including the allocation of property-related expenditure. Application also depends on the status of the person using the asset, so private use requires a case-specific accounting review. [The Ministry of Finance summarises the regime under Articles 204–217 of the Corporate Income Tax Act].
How an individual's long-term rent is taxed
Where a Bulgarian-resident individual receives ordinary rental income, taxable income is reduced by a 10% statutory expense allowance and tax is charged at 10% on the tax base. In a standard case without further adjustments, this produces tax equal to 9% of gross rent. Responsibility for advance tax depends on whether the tenant is an enterprise or a self-insured person. [The current National Revenue Agency guidance explains this rental-income treatment]
The statutory allowance does not let the owner deduct actual repairs, furniture or interest for a second time. If the facts amount to a business or tourist-accommodation activity, do not automatically apply this example.
How the company is taxed
A Bulgarian trading company pays corporate tax at 10% on taxable profit. Taxable profit is neither rent received nor free cash flow: it is based on the accounting result after the adjustments required by the Corporate Income Tax Act. [The NRA states the tax base and rate under Articles 19 and 20 of that Act].
The company therefore cannot deduct “everything with an invoice.” Expenditure must be accounted for and supported by documents, while its tax treatment depends on its relationship to the business and the applicable rules. The acquisition cost of a building, a current repair, a substantial improvement, furniture and interest are not interchangeable accounting categories. The depreciation and tax treatment for the actual property should be prepared under the [current Corporate Income Tax Act published by the Ministry of Finance].
If profit remains in the company, no dividend has been distributed to the owner. When a Bulgarian company distributes a dividend to a Bulgarian-resident individual, the income is subject to 5% final tax on the gross dividend.[The NRA states the rate and base under Article 46(3) of the Personal Income Tax Act] The comparison should therefore include both company tax and any amount that ultimately needs to reach you personally.
VAT: a company does not create automatic recovery
Input VAT recovery does not arise merely because the buyer is a company or is VAT registered. The purchase transaction, registration, supporting documents and use of the property for taxable supplies all matter.
Article 45(4) of the Bulgarian VAT Act treats the letting of a building or part of it as a home to an individual who is not a trader as an exempt supply. The Act permits a supplier to opt to tax certain Article 45 supplies, but that choice must be analysed for the actual letting. The right to deduct and later adjustment rules appear separately in the Act. [See the current official VAT Act, including Articles 45, 69, 70 and 79–79b].
The practical step is to obtain a written VAT analysis before the preliminary contract. It should identify the seller, the VAT-inclusive or VAT-exclusive price, the future tenant, the intended use and any private use.
Compare finance separately
A consumer credit agreement for immovable property and a loan to a company are not the same contractual regime. The Bulgarian National Bank explains that a consumer mortgage lender assesses creditworthiness and may refuse the application; evidence of income and separate property documents are required. [See the BNB's guide for mortgage borrowers].
Do not assume that a personal preliminary offer can be transferred to the company. If both ownership routes are feasible, obtain two genuine proposals and compare total cost, term, security, required equity and any personal guarantees.
What happens on sale?
For an individual, the Personal Income Tax Act exempts income from the sale of one residential property where more than three years have passed between acquisition and sale. It also exempts income from the sale of up to two immovable properties, and agricultural and forest properties irrespective of number, where more than five years have passed. These are separate conditional rules, not a general promise that every property becomes tax-free after three years. [The NRA publishes the exact scope of the Article 13(1)(1) exemptions].
Where disposal forms part of an activity carried on as a trader, classification and taxation can differ. This point matters especially for repeated purchases and resales.
For a company, the accounting result on disposal contributes to its taxable profit. If the owner then wants the proceeds personally, the lawful route for extracting the money, including a possible dividend, must also be modelled.\
The comparison in one table
| Question | Individual | Bulgarian company |
| Standard long-term renta | 10% statutory expenses and 10% tax on the taxable base | 10% corporate tax on taxable profit |
| Actual expenses | Not deducted separately under the statutory expense | Recognized in accordance with accounting rules and the Bulgarian Corporate Income Tax Act |
| Receiving the profit personally | The income is already received by the individual | Distributed dividends to a Bulgarian resident individual are generally subject to a 5% final tax |
| VAT | Depends on VAT registration, the type of supply, and how the property is used | Also depends on VAT registration, the type of supply, and use; owning the property through a company does not by itself create a right to input VAT deduction |
| Sale | Tax exemptions under Article 13 of the Bulgarian Personal Income Tax Act may apply if all conditions are met. | The result from the sale is included in the company’s taxable profit |
This table is an orientation, not a calculator. Build at least two models: a normal rental year and the year of sale. Include accounting, finance, expected capital expenditure and the way the profit will be used.
Next step
Before reserving the property, give your accountant identical rent, expense, finance and sale assumptions for both routes. Use the separate framework for [evaluating an apartment as an investment] to prepare those inputs. TV Property can provide the actual property data, but your tax adviser should confirm the structure in writing for your circumstances.
[Request details for a specific investment property].
Verified primary sources
- [Bulgarian National Revenue Agency: rental income](https://nra.bg/wps/portal/nra/taxes/danak-vurhu-dohodite-na-fizicheski-lica/naem/rent)
- [NRA: corporate income tax](https://nra.bg/wps/portal/nra/taxes/korporativen-danak)
- [NRA: dividends](https://nra.bg/wps/portal/nra/taxes/okonchatelen-danak-varhu-dohodi/dividenti/dividenti)
- [NRA: disposal of property](https://nra.bg/wps/portal/nra/taxes/godishen-danak-varhu-dohdite/prodazhba-na-imushtestvo/)
- [Ministry of Finance: current Bulgarian VAT Act](https://www.minfin.bg/upload/19301/ZAKON_za_danyk_vyrhu_dobavenata_stojnost.pdf)
- [Ministry of Finance: current Corporate Income Tax Act](https://www.minfin.bg/upload/46882/ZAKON_za_korporativnoto_podohodno_oblagane.pdf)
- [Bulgarian National Bank: guide for mortgage borrowers](https://www.bnb.bg/bnbweb/groups/public/documents/bnb_download/bs_cust_info_pdf_bg.pdf)
Frequently asked questions
The number of properties alone cannot answer this. Personal ownership is often administratively simpler for an ordinary long-term letting. A company may make sense where the property belongs to a business activity, has significant properly accounted expenditure or produces profit that will be reinvested. Use your actual numbers.
No. A supporting document is necessary but not sufficient. The cost must relate to the business and be classified correctly; some expenditure is capitalised instead of reducing the result immediately.
No. Every statutory condition for input tax must be met. Exempt or private use can restrict the right or trigger adjustments.
A suitable lawful transaction or corporate operation can transfer it, but the transfer is not automatic. A sale, contribution in kind and other routes have different procedures, valuations, costs and tax consequences. Select the route with a notary, lawyer and tax adviser.
Vladimir Kolev is the CEO of TV Property and an entrepreneur in the field of residential and investment properties. He graduated in Economics and Mathematics from the University of Bath and Sofia University and has practical experience in the development of distinguished residential projects in Sofia and along the Black Sea coast.