Complete Guide: Property Taxes in Bansko for Airbnb and Rental

Managing a property in Bansko is an excellent opportunity to generate passive or active income. The resort attracts thousands of tourists, digital nomads and seasonal workers throughout the year. But with the revenues come specific tax obligations to the state budget (NA) and the local treasury of the Municipality Bansko.

One of the most common and costly misconceptions among new owners is the assumption that all types of rentals are taxed the same way. In reality, the tax treatment you should apply depends entirely on the nature of the rental – whether it is long-term residential use or short-term tourist accommodation through platforms such as Airbnb and Booking.com.

This article is designed to explain in detail the basic requirements, thresholds, and deadlines so that you can be completely compliant and avoid hefty fines.

1. Long-term rental: Personal income tax (PIT)

When you rent out your apartment or house in Bansko for permanent residence (for example, you sign a one-year contract with ski instructors, hotel staff, IT specialists or digital nomads), your income is treated as standard rental income within the meaning of the Personal Income Tax Act (PITA).

How is the tax calculated?

The law is relatively favorable for individual landlords, as the income is not taxed in its full gross amount.

Tax base: The state automatically recognizes you 10% statutory expenses (which virtually cover your depreciation, minor repairs and ongoing maintenance). For these 10%s you do not need to collect and prove invoices.
Tax rate: The tax due is in the amount of 10% on the already reduced tax base (that is, you actually pay 10% tax on 90% of your gross income).

Calculation example: If you receive 1000 BGN in rent per month, your annual income is 12,000 BGN. We deduct 10% of statutory expenses (1200 BGN). Your tax base becomes 10,800 BGN. The annual tax due is 10% of this amount, or exactly 1080 BGN.

Declaration and deadlines for payment

The declaration process is divided into advance payments and annual reconciliation:

Advance tax (Quarterly): It is due for the first, second and third quarters of the year. It is filed Declaration under Art. 55 of the Personal Income Tax Act by the end of the month following the relevant quarter (e.g. for the first quarter the deadline is April 30).
Annual equalization: No advance declaration is submitted for the last (fourth) quarter. Instead, the entire balance is settled with The annual tax return under Article 50 of the Personal Income Tax Act, which is submitted by April 30 of the following calendar year.

2. Short-term rental (Airbnb/Booking): Patent Tax Regime

If your business model is aimed at tourists and you rent out your property for overnight stays, your activity is automatically classified by the state as hotel management. Here the rules change drastically. For individuals and Sole Proprietors (ET) who have categorized facilities (up to 20 rooms), the regime of Patent tax, regulated in the Law on Local Taxes and Fees (LTTF).

What is Patent Tax?

The patent tax effectively replaces the standard 10 percent income tax. Its most important feature is that you You do NOT pay a percentage on your actual turnover. You owe a fixed annual amount to the Municipality of Bansko, regardless of whether your property was occupied for 300 days a year or was empty.

Amount, declaration and deadlines

Tax amount: The exact rate is voted on annually by the Bansko Municipal Council. It is determined based on location (the area the property falls into in the city) and capacity (the number of beds/rooms in your guest apartment).
Declaration: Before you even welcome your first guest, you are required to file a tax return under Article 61n of the Tax and Customs Act at the registry office or tax office of the municipality.
Payment terms: The tax can be paid in four equal installments during the year. However, if you pay the full amount by January 31 of the current year, the law entitles you to use 5% discount.

3. The biggest stumbling block: VAT registration

This is where the biggest risk for business owners lies. Many people mistakenly believe that Value Added Tax (VAT) only applies to them if they are a large company with huge turnover. This is an extremely dangerous misconception, especially when working with global digital platforms.

Attention: Mandatory registration under Art. 97a of the VAT Act.
Even if you have only booked 1 night for the entire year, if you use the intermediary services of a platform based in another EU country (such as Booking.com – Netherlands and Airbnb – Ireland), you are obliged to register for VAT (Art. 97a) with the National Revenue Agency BEFORE receiving the first service (commission invoice). Fines for late payment start at 500 BGN!

How does the mechanism under Article 97a work?

It is important to understand that with this specific registration you you do not charge 20% VAT on the price of the night, which the guest pays. The mechanism is called “reverse charge”. You only owe 20% VAT on the amount of the commission, that the platform holds for you.

Example: A guest pays 100 BGN for a night. Airbnb charges you a 15 BGN commission (service fee). You owe the NRA 20% VAT on these 15 BGN, which equals 3 BGN.

This regime requires serious administration - every month by the 14th, purchase and sales logs and a report-declaration are submitted to the NRA, even in the months in which you had no guests (zero declarations are submitted).

General VAT registration

Standard (general) registration becomes mandatory only if your taxable turnover (the total amount of all overnight stays) exceeds the legal threshold (currently BGN 100,000, with a tendency to increase to BGN 166,000 from 2025). If you reach this threshold, you already owe the reduced rate of 9% VAT for tourist services on the full value of each overnight stay.

4. Social security contributions and local taxes

Paying taxes is only part of the financial picture. You also need to consider the social security burden, as well as local obligations.

Insurance by type of activity

For long-term rental: As an individual, you do not owe additional social and health insurance contributions on passive rental income, unless you are already registered as a self-employed person on another basis (e.g. freelance).
For short-term rental: Since hospitality is strictly considered a business, the NRA often requires insurance. If you manage the property yourself, you may need to register as a self-insured person. The practice here is very specific, so it is critical to discuss your individual status with an accountant.

Summary: Calendar of your obligations

To systematize the information, here is what the profile of obligations looks like for a typical guest apartment owner (individual) in Bansko:

To the local authorities (Bansko Municipality):

Real Estate Tax and Municipal Waste Fee: They are paid annually for the very fact that you own a property.
Patent tax: Annual tax for the right to carry out tourism activities.
Tourist tax: It is paid monthly, based on the actual reported overnight stays in the ESTI system (usually varies between 0.40 BGN and 1.00 BGN per person per night, depending on the category).

To the state (NRA):

VAT on commissions (Art. 97a): Monthly filing of declarations.
Insurance contributions: Monthly (depending on your specific insurance profile).

Expert advice: Tax legislation in Bulgaria is dynamic and subject to frequent changes. This article provides fundamental information and guidance, but cannot replace individual professional advice. We strongly recommend that you hire a qualified accountant in Bansko or the region who is closely specialized in the tourism sector and property management.

Contact an expert for tax advice