According to the Bulgarian tax legislation, every real estate, situated within the regulated borders of cities, villages and towns, is imposed with annual council property tax. This is obligation created by the Law so it cannot be avoided. Simply said, in theory the local municipality does not care whether you know or do not know how and where to pay your council taxes, because it is a sole obligation of every owner to declare the recently acquired property and then to take annually the necessary steps to find out what is the account of the municipality or to visit a cash desk and pay the taxes. The council tax is a yearly imposed one ,so this means that real estate owners have an obligation for each separate year to pay the tax for the same year. But in many cases the foreigners who wish to buy Bulgarian real estate, fail to inform themselves about the existence of annual council property taxes, and respectively either do not pay these, or, in some situations when related to apartments in holiday complexes, they have the wrong idea that these taxes are covered by the maintenance fee they are paying towards management companies. The common practice is, if property owner hasn’t paid their council taxes for more than 4 years, the municipality to take the necessary steps to collect its money compulsory through a public bailiff. On the base of my 10-year practice I can conclude that this applies especially when the property is owned by corporate entity and there are several years of tax debts. The municipality has the right to ask the public bailiff to take some of the properties which the debtor owns on to a public auction for satisfaction of the debt. Taking care of the annual council property taxes, especially, if so much time has passed since the real estate purchase already, is a must, because the local municipalities may act not later than the expiration of the fourth year of the delay.
And I guess here is the place to point an important issue: Every foreign buyer who has purchased a real estate property in Bulgaria since 2005 must do two compulsory registrations : to register with a BULSTAT number within a week after the first purchase ( this is specific registration for supplying you with a tax identification number so you can pay your taxes correctly) and then declaring the property with the BULSTAT number he/she has received at the tax office in the local municipality in two-months deadline after the purchase. There is a fine for failing to complete these registrations,so in case you own a property in Bulgaria but you are not aware with the above registrations and council taxes, then it is important to establish first whether you have a BULSTAT registration number or not (if more than one buyer bought the properties together then all of them must have BULSTAT registration) and whether the properties have been properly declared in the municipality. As you can see one thing is related to the other and usually these registration should be done one by one from the beginning. In my practice I have registered in these authorities on behalf of foreign property buyers many delayed purchases (basically hired by people who want to re-sell, but not legally and technically able because of lack of declaring their purchased properties), so I can make the conclusion that this hasn’t been done previously due to lack of information in the usual case.