Yes, Bulgaria has established national regulations governing short-term rentals (STRs) to ensure compliance with tourism standards and tax obligations.
Registration and Categorization:
Property owners intending to offer short-term rentals are required to register their properties as tourist accommodation. This process, known as categorization, involves submitting an application to the local municipal authority, typically the Department of Tourism. The application must include:
- A valid identification document.
- Proof of property ownership.
- Payment of the applicable fee.
Upon submission, a temporary certificate is usually issued within 14 days, allowing the property to operate legally. Subsequently, an on-site inspection is conducted to ensure the property meets safety and quality standards. If compliant, a permanent certificate is issued, which must be displayed prominently within the property.
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Taxation:
Income derived from short-term rentals is subject to taxation in Bulgaria. The taxation method depends on the nature of the rental activity:
- Rental Income Tax: If renting a portion of your primary residence (e.g., a room), the income is considered rental income. Individuals can deduct a flat rate of 10% for expenses, resulting in a taxable base of 90% of the gross rental income. A flat tax rate of 10% is then applied.
- Business Activity Tax: If renting an entire property not used as your primary residence and providing additional services akin to hotel offerings (e.g., cleaning, laundry), the activity may be classified as a business. In such cases, the income is taxed under the rules applicable to sole traders, with a tax rate of 15% on the taxable income.
- Patent Tax: Applicable if the property is categorized as a tourist facility (e.g., guesthouse) with an annual turnover below BGN 50,000 and the owner is not registered for VAT. The patent tax is a lump sum determined by the municipality, varying based on location and number of rooms.
Additional Considerations:
- Guest Registration: Hosts are required to maintain a guest register and report guest information to local authorities, adhering to national security and statistical data collection requirements.
- Lease Agreements: While short-term rentals are typically less formal than long-term leases, it's advisable to have a written agreement outlining the terms of the stay to protect both parties' rights.
By complying with these regulations, property owners can legally operate short-term rentals in Bulgaria, contributing to a transparent and standardized tourism sector.