Краткосрочен наем Laws in Bulgaria

Краткосрочен наем Laws in Bulgaria

Bulgaria

Introduction
Introduction to Краткосрочен наем in Bulgaria

The growing market for short-term rentals in Bulgaria, driven by platforms such as Airbnb, Booking.com, and others, has offered homeowners a lucrative opportunity to earn from their properties. However, as the sector grows, so does the attention from regulatory bodies, leading to the introduction of laws and regulations to manage the industry's expansion. Understanding these legal frameworks is crucial for property owners to operate successfully and legally.

Overview

The growing market for short-term rentals in Bulgaria, driven by platforms such as Airbnb, Booking.com, and others, has offered homeowners a lucrative opportunity to earn from their properties. However, as the sector grows, so does the attention from regulatory bodies, leading to the introduction of laws and regulations to manage the industry's expansion. Understanding these legal frameworks is crucial for property owners to operate successfully and legally.

Property
Overview

Yes, Bulgaria has a national association for short-term rental owners: the Association for Tourism Properties and Innovations (ATPI). ATPI is a non-governmental organization representing short-term rental hosts and management companies across the country. Its mission is to promote short-term rentals in Bulgaria and provide members with exclusive information and resources to help them succeed in the industry.

Property
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short term rentals
What is Краткосрочен наем in Bulgaria?
What are short Term Rentals in the Country?

In Bulgaria, short-term rentals are commonly referred to as "apart-hotel" or "частни квартири" (chastni kvartiri), which translates to "private lodgings" or "private rooms." These terms cover a range of accommodations available for short stays, such as apartments, rooms in private homes, or holiday houses.

In Bulgaria, short-term rentals is defined as any residential property rented out on a daily or weekly basis to travelers, usually for a period less than 30 days. This type of lodging provides an alternative to traditional hotel stays, offering visitors the chance to experience Bulgaria in a more home-like, often more affordable setting, which has become increasingly popular in tourist areas and major cities.

Is Subletting Legal?
Is Subletting Legal in Bulgaria?

Yes, a tenant can legally operate a short-term rental in their apartment; however, several permissions and conditions must be met. Primarily, tenants are required to obtain permission from their landlord to ensure compliance with lease terms, as many rental agreements may prohibit subletting or hosting without explicit approval. Additionally, certain buildings may have regulations or bylaws set by a homeowners' association, which could restrict short-term rentals or impose specific guidelines.

National Association for STR Owners
What is the maximum length of stay in Bulgaria?
What is the maximum length of stay?

Bulgaria has no nationwide limit on short-term rental durations, generally defining them as stays under 30 days. While national laws don’t set a specific maximum stay, local rules may apply in cities like Sofia, Varna, and Plovdiv. Sofia commonly offers daily and weekly rentals, while Varna permits longer stays during peak tourist seasons. Hosts should confirm any local guidelines, as they may affect rental classifications and requirements.

Is there any National Registration Requirement or Permit?

Yes, in Bulgaria, hosts of short-term rentals are generally required to register guest information with national authorities to operate legally. This process involves several steps:

  1. Registration with OP Tourism: Hosts must register their property as a tourist accommodation with OP Tourism in Bulgaria. This registration categorizes the property for short-term rental use.
  2. Monthly Reporting via the Online Guest Entry System: Once registered, hosts are required to report guest information (such as the number of guests by country) monthly via OP Tourism's online system. This report is generally due by the 15th of each month, and the system automatically calculates the tourist tax based on this information.
  3. Paper Guestbook: Additionally, hosts must keep a physical record of guest information in a "guestbook" under Article 116, which is intended for record-keeping and potential inspections.
Is there a need for Permission from Landlord/Local Council/Neighbors?

Yes, hosts in Bulgaria do need certain permissions when operating short-term rentals:

  1. Landlord Consent: If the host does not own the property, a copy of the property use document (such as a lease agreement) must be provided during the registration process. This implies that the landlord's consent is essential, especially for non-owners.
  2. Neighbor Consent: The registration document specifically states that neighbor consent is required, which means obtaining permission from neighbors is part of the compliance process. This is particularly relevant in multi-unit buildings where shared living spaces might be impacted by short-term rentals.
  3. Local Municipality Approval: Hosts must register the property with the local municipality, categorizing it as a Class "B" accommodation. This includes submitting an application along with required documentation and a fee of approximately 20 BGN per bed..
Is Short-term rental Income taxable?

In Bulgaria, short-term rental income from platforms like Airbnb and Booking.com is subject to income tax, VAT, and potentially patent tax:

  1. Income Tax: Rental income is taxed at a flat rate of 10%. Income from Airbnb or Booking.com is treated as small hotel business revenue, requiring registration as a sole trader and adherence to the Local Taxes and Fees Act and Tourism Act. This includes contributions to social security, health, and pension insurance. Payments as specified by the National Revenue Agency (NRA).
  2. VAT: Rentals exceeding a certain turnover threshold may incur VAT, typically at 9% or 20% depending on the type of accommodation. Hosts using foreign platforms must register for VAT per Article 97a of the VAT Act and submit monthly VAT returns
  3. Patent tax: Paid to the local municipality for certain short-term rental properties categorized as tourist facilities under the Tourism Act. Hosts must file a Declaration for Patent Taxation by January 31 each year with the municipality where the property is located, and the tax is then paid in four installments throughout the year. The amount is determined by the specific municipality.
  4. Exemptions and Thresholds: Income tax applies universally at a flat rate, with no progressive scale. Hosts below certain turnover thresholds might avoid VAT registration or specific obligations.
  5. Compliance: Hosts must maintain accurate records, file tax returns quarterly or annually and fulfill VAT obligations if registered. Foreign hosts may also need to consider double taxation treaties.

Is there any National Tourism Fund or Tourist Tax?

Yes, in Bulgaria, hosts are required to collect a tourist tax from guests for short-term rentals. This tax, which varies by location e.g. BGN 0.70 per night in Bansko, BGN 0.40 in Sofia, Nessebar, Obzor, Sunny Beach, and Ravda: BGN 0.45 per nigh which is added to guest charges and supports local tourism-related infrastructure. However, hosts do not contribute directly to national tourism boards or funds through this tax. Instead, they remit the collected tourist tax to local municipal authorities.

Is there any Guest Registration and Reporting Requirement?

Yes, in Bulgaria, hosts of short-term rentals are generally required to register guest information with national authorities to operate legally. This process involves several steps:

  1. Registration with OP Tourism: Hosts must register their property as a tourist accommodation with OP Tourism in Bulgaria. This registration categorizes the property for short-term rental use.
  2. Monthly Reporting via the Online Guest Entry System: Once registered, hosts are required to report guest information (such as the number of guests by country) monthly via OP Tourism's online system. This report is generally due by the 15th of each month, and the system automatically calculates the tourist tax based on this information.
  3. Paper Guestbook: Additionally, hosts must keep a physical record of guest information in a "guestbook" under Article 116, which is intended for record-keeping and potential inspections.
Is there any National Health and Safety Requirements?

Yes, there is national health and safety regulations host must for in other to operate short-term rentals in Bulgaria. The country has specific requirements focused on the health, safety, and well-being of guests. These often include standards related to fire safety, cleanliness, building accessibility, and guest emergency protocols. Hosts may need to meet specific building codes and ensure compliance with local health guidelines. Some municipalities also require hosts to conduct regular safety inspections and provide adequate emergency contact information to guests.

Is there any Platform Accountability Requirement?

Yes, online platforms like Airbnb and Booking.com are required to ensure that short-term rental listings comply with Bulgarian national laws, primarily under the Tourism Act. This regulation mandates that all short-term rental properties must be registered and categorized, similar to hotels, to ensure legal operation. Platforms are expected to support this compliance by verifying host registration and sharing relevant data with local authorities to help monitor and enforce these requirements. This data-sharing responsibility aligns with broader EU directives like the Digital Services Act (DSA), which stipulates that platforms must maintain transparency and follow local laws.

Is there any Anti-Discrimination Law?

Yes, Bulgaria has anti-discrimination protections that apply to short-term rentals, grounded in its Protection Against Discrimination Act. This law prohibits discrimination based on various grounds, including ethnicity, race, gender, and other protected characteristics, and it applies to the provision of goods and services, including rental housing. Under this law, hosts and platforms are legally required to ensure equal treatment and prevent discriminatory practices, whether direct or indirect, against potential renters.

Is there any Data Sharing Requirements?

Yes, there is data sharing requirements. In 2023, Bulgaria and other EU countries introduced regulations requiring short-term rental (STR) platforms to share booking, host identity, and property details with national authorities. This measure, designed to improve transparency and local management, builds on the European Digital Services Act, promoting STR accountability and combating illegal listings. Each EU member state will implement data-sharing mechanisms within 24 months to support these requirements, including accommodations for smaller STR operators. This aligns Bulgaria's STR regulations with EU standards for a more organized and compliant rental market.

Is there any National Insurance Requirement?

While insurance isn’t a national requirement, hosts are encouraged to consider liability insurance to protect against potential damages or guest incidents. Additionally, some hosting platforms, like Airbnb, provide optional liability insurance under programs like AirCover, which can offer basic coverage against third-party claims for property damage or personal injury.

Is there any National Zoning law/Cultural Heritage law?

Bulgaria's Cultural Heritage Act and related laws provide protections for culturally and historically significant areas from the effects of short-term rentals and other commercial activities. Key measures include:

  1. Conservation and Management Plans: Enacted by the Council of Ministers, these plans include restrictions on commercial activities, such as short-term rentals, to safeguard the cultural and historical integrity of certain areas.
  2. National Institute for Immovable Cultural Heritage: This body oversees cultural preservation by assessing properties, creating conservation plans, and managing a registry of protected sites. It may restrict or regulate short-term rentals in sensitive heritage areas.
  3. Municipal Regulation: Local councils establish strategies and may apply restrictions on short-term rentals to align with cultural preservation objectives within protected areas.
  4. International Conventions: Bulgaria follows conventions like the European Convention on the Protection of the Archaeological Heritage, reinforcing commitments to cultural preservation, including controls on commercial rentals in historic locations.

These frameworks collectively help Bulgaria manage the cultural impact of tourism in its significant heritage sites.

Is there any Environmental Regulations that affects STR?

Bulgaria's Executive Environment Agency (EEA) enforces general environmental standards that impact sectors, including tourism and rentals, though there are no specific sustainability mandates for short-term rentals. These standards cover air quality, waste management, water use, and emissions, supporting a cleaner environment in line with EU goals. Short-term rental platforms like Airbnb encourage eco-friendly practices that align with national sustainability efforts.

Is there any National Tenant Protection Law?

Bulgaria has tenant protection laws that offer long-term tenants some defense against being evicted to make way for short-term rentals. These protections generally fall under the Law on Obligations and Contracts (ZZD), which governs landlord-tenant relationships and outlines tenants' rights to fair treatment and privacy.

Key protections include:

  1. Right to Peaceful Enjoyment: Tenants have a right to enjoy their rental property without interference from the landlord, who is obligated to ensure peaceful occupancy.
  2. Fixed-Term Lease Protections: For leases of a set term, landlords cannot evict tenants without cause, preserving stability for tenants who have agreed to a long-term lease.
  3. Right to Notice: If a landlord decides to terminate a lease, tenants are generally entitled to advance notice unless there is a significant breach of lease terms.

Tenants may also seek legal redress if they believe they are being wrongfully evicted to prioritize short-term rentals.

Is there any Reporting Requirements for Foreigners?

Yes there is, according to the Bulgarian immigration laws, short-term rental hosts accommodating foreign guests are generally required to report these guests to national immigration authorities. Hosts must:

  1. Register Guests: Within five days of arrival, hosts are obligated to register non-EU/EEA/Swiss guests with local immigration authorities, including details like the guest's name, passport number, and stay duration.

This process is part of Bulgaria’s efforts to monitor foreign visitors and comply with immigration regulations.

Is there any Digital Platform Regulation Compliance?

Yes there is digital platform regulation compliance in Bulgaria, Under new 2023 EU regulations, short-term rental (STR) platforms like Airbnb and Booking.com must verify that listed properties comply with local and national regulations before listing them. This framework also requires platforms to share host and listing details with national authorities to ensure regulatory alignment. Bulgaria, as an EU member, follows these rules, and STR platforms collaborate with Bulgarian authorities to confirm property compliance prior to listing.

Is there any Consumer Protection Law that affect STR?

In Bulgaria, short-term rental contracts must comply with consumer protection standards under the Consumer Protection Act (CPA), ensuring transparency and fair treatment for guests. Contracts should specify terms such as pricing, services, and any extra fees to prevent misleading practices. Proposed amendments in 2024 further aim to enhance consumer rights in online marketplaces and strengthen transparency and dispute resolution measures. The Consumer Protection Commission, under the Ministry of Economy, enforces these standards, providing a secure framework for fair rental agreements.

Is there any Law that applies to Non-resident Owners?

In Bulgaria, non-resident owners of short-term rental properties must meet specific regulatory requirements, primarily focusing on residency, reporting, and tax compliance.

  1. Residency and Reporting: The Foreigners in the Republic of Bulgaria Act mandates that non-resident property owners who generate income locally register with the Migration Directorate if they spend extended periods in Bulgaria. Additionally, non-resident property managers may need to designate a local representative to handle regulatory compliance and reporting.
  2. Tax Obligations: Non-resident owners are subject to withholding tax on rental income earned from Bulgarian properties. They may also need to file an annual tax return, with tax rates and obligations varying based on their country of residence (EU or non-EU).

These measures ensure compliance with consumer protection standards, tax contributions, and transparency in Bulgaria's rental market.

Is there any classification of STR in the country?

Typically, there is no specific national classification exclusively for STRs; rather, they are generally treated similarly to long-term rentals which falls under Hotel classification for the purpose of tax.

Are there Special National Event Regulations?

During national events or holidays in Bulgaria, municipalities may impose additional regulations to manage tourism effectively. These can include curfews in high-traffic areas to minimize nighttime disturbances, stricter ID verification for security, enhanced noise restrictions, particularly in residential or historical areas, and temporary limits on the maximum length of stay to control visitor influx. Regulations vary by event and location, aiming to balance visitor management with community interests.

Is there any Penalty for Violating National Rules?

In Bulgaria, non-compliance with national short-term rental regulations, such as operating without the required permit, can result in several penalties: 1. Fines: Operating without a permit or registration can result in fines typically ranging from BGN 500 to BGN 5,000, depending on the severity and frequency of the violation. For example, an initial violation might incur a fine of around BGN 500, while repeated violations can increase the fine up to BGN 5,000. 2. Legal Action: If short-term rental operators fail to comply with tax obligations or registration requirements, authorities may initiate legal action, which could include more severe penalties or sanctions, especially if the violation is continuous or involves fraudulent activities. 3. Operational Disruptions: Regulatory bodies have the authority to suspend or halt rental operations if the property lacks necessary permits. 4. Reputation Damage: Non-compliance can result in negative listings or public records of violations, potentially harming the reputation of the operator.

Are there National Rules or Regulations Governing Short-Term Rentals in Bulgaria?
Are there National Rules or Regulations Governing Short-Term Rentals in the Country?

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.

Homey

Taxation:

Income derived from short-term rentals is subject to taxation in Bulgaria. The taxation method depends on the nature of the rental activity:

  1. 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.
  2. 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.
  3. 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.

Is there any National Tax that affects short-term rental?

This is a good summary of the taxation of short-term rentals in Bulgaria. Here are a few minor additions and clarifications:

  • Rental Income Tax Deductions: While the 10% flat rate deduction is common, it's worth noting that taxpayers can also deduct actual expenses related to the rental activity, such as utilities, repairs, and cleaning costs, if they can properly document them.
  • Business Activity Tax Deductions: When operating as a business, taxpayers can deduct a wider range of expenses from their gross income, including advertising, marketing, and professional fees.
  • Patent Tax vs. Business Activity Tax: It's important to understand the distinction between these two tax regimes. If your activities exceed the criteria for a "tourist facility" or if your annual turnover exceeds BGN 50,000, the patent tax may not be applicable, and you will be subject to the business activity tax.
  • VAT Registration: The VAT threshold can vary depending on the specific type of business activity.
  • Foreigners: Foreigners renting out property in Bulgaria may have specific tax obligations and reporting requirements.
permits, license
Are there any Permits, Licenses, or Registrations for Краткосрочен наем in Bulgaria?
Are there any Permits, Licenses, or Registrations for Short-term Rentals in the Country?

Yes, in Bulgaria, hosts of short-term rentals are generally required to register guest information with national authorities to operate legally. This process involves several steps:

  1. Registration with OP Tourism: Hosts must register their property as a tourist accommodation with OP Tourism in Bulgaria. This registration categorizes the property for short-term rental use.
  2. Monthly Reporting via the Online Guest Entry System: Once registered, hosts are required to report guest information (such as the number of guests by country) monthly via OP Tourism's online system. This report is generally due by the 15th of each month, and the system automatically calculates the tourist tax based on this information.
  3. Paper Guestbook: Additionally, hosts must keep a physical record of guest information in a "guestbook" under Article 116, which is intended for record-keeping and potential inspections.
Is there any National Association for Краткосрочен наем owners in Bulgaria?
Is there any National Association for STR owners in the Country?

Yes, Bulgaria has a national association for short-term rental owners: the Association for Tourism Properties and Innovations (ATPI). ATPI is a non-governmental organization representing short-term rental hosts and management companies across the country. Its mission is to promote short-term rentals in Bulgaria and provide members with exclusive information and resources to help them succeed in the industry.

National Association for STR Owners

Disclaimer

Lodge compliance is not a licensed tax or financial advisor. Therefore nothing in the above article should be construed as tax, legal, or financial advice. Contact your local tax office for information regarding your personal circumstance.

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