Update the "Buildings" tax within a year and a half to be carried out in our country on the "Buildings" tax and to eliminate the 50% discount for primary residence. These are the two proposals that the World Bank is making in order to stabilize the financial situation of municipalities and overcome discrepancies in tax assessments.
The reason for the drastic measures is that in the last 10 years, the share of own revenues has decreased from 40 to 25% and thus local authorities are increasingly dependent on the state budget.
Against the backdrop of the rapidly developing property market, tax assessments lag behind real prices by 3.5-4.5 times in Sofia, up to 3 times in Plovdiv and 4 times in the coastal cities of Varna and Burgas. This requires the updating of the criteria, which have not been updated since 2009, and the optimization is also related to the increase in property tax.
As for the tax discount for primary residence, the proposals are that it be given only to socially disadvantaged households. Currently, the discount applies to everyone.
If the World Bank's recommendations are accepted, the local revenues of large municipalities will increase by up to 25%, and of small ones - by up to 10%.
The most affected will be the owners of properties that rent them out.
Detailed statistics on the average prices of properties in Bulgaria by cities and neighborhoods can be seen at imot.bg