Property tax assessment vs. market price

A property transaction involves two different figures: the price it actually sells for, and its official tax assessment. The gap between them determines what you’ll pay in notary fees and taxes.

What market price is

This is the amount buyer and seller agree on — the result of negotiation, the property’s condition, location, and market conditions. It’s recorded in the notary deed as the sale price.

What tax assessment is

The tax assessment (данъчна оценка) is a value calculated using a statutory methodology by the municipal administration, based on location, area, construction type, and year built. It’s almost always lower than the actual market price — sometimes considerably so, especially in areas where property prices are rising fast. It’s issued by the “Local Taxes and Fees” department of the municipality where the property is located.

Why the higher of the two is used

Bulgarian law states that notary fees, the registry fee, and the acquisition tax are calculated on the material interest — the higher of the two figures (sale price or tax assessment). That’s exactly the field you enter in the notary fee calculator.

In practice, since market price is almost always higher than the tax assessment, the agreed sale price is the base used in most transactions today.

How to get a tax assessment

A tax assessment is issued on request from the municipality (or online, if the municipality offers that service) and is typically required as part of the document package for the notary transaction itself.

Related

Calculate the full transaction cost with the notary fee calculator, or check the monthly payment if you’re financing the purchase with a loan.