Bulgarian buyers' guide to buying property on the Costa del Sol — 2026

This guide is written for Bulgarian nationals buying property on the Costa del Sol in 2026. Bulgarian buyers have an exceptionally favourable cross-border tax profile. Bulgaria operates a flat 10% income tax on all personal income including rental income — one of the lowest rates in the European Union. Since Spain's IRNR rate for EU non-residents is 19%, the Spain-Bulgaria DTA credit mechanism means Bulgarian residents who pay Spanish tax first owe nothing further to Bulgarian tax authorities on the same income. The same logic applies to capital gains: Spain's 19% rate exceeds Bulgaria's 10%, leaving zero net Bulgarian liability. Bulgaria also provides a complete inheritance tax exemption for direct family members. This guide sets out all of this in full.

EU and Schengen freedom of movement

Bulgaria joined the Schengen Area for air and sea travel in December 2023, and full Schengen rights including land borders took effect from January 2025. As EU and Schengen citizens, Bulgarian nationals have unrestricted freedom of movement in Spain — no 90-day limit, no visa requirement. If planning to stay more than three months continuously, register as an EU resident at the Oficina de Extranjería. After five years of continuous legal residence, permanent residency follows automatically.

The NIE

An NIE (Número de Identificación de Extranjero) is required before signing the private purchase contract. Bulgarian nationals obtain this in Spain or at the Spanish consulate. Allow two to four weeks.

The Bulgaria-Spain double taxation treaty

Bulgaria and Spain have a bilateral double taxation agreement covering income from immovable property, rental income, and capital gains on property sales. The treaty assigns primary taxing rights on Spanish real estate income to Spain and provides a credit mechanism for Bulgarian residents who have paid Spanish taxes.

The key practical effect — Bulgaria applies a flat 10% income tax rate on all personal income, including rental income from foreign property. Since Spain's IRNR for EU non-residents is 19% and Bulgaria's flat rate is 10%, the Spanish tax already paid (19%) fully absorbs and exceeds the Bulgarian liability (10%). After applying the DTA credit, Bulgarian residents who declare their Spanish rental income in Bulgaria owe nothing further to the Bulgarian National Revenue Agency (NRA) on that income. This applies to both rental income and capital gains from Spanish property.

Spanish IRNR — 19% with full expense deductions

As EU residents, Bulgarian non-residents pay IRNR at 19% on imputed income (1.1% or 2% of cadastral value if not renting) or on net rental income after allowable expenses (19%) if renting. Deductible expenses include mortgage interest, IBI, community fees, insurance, maintenance, and depreciation at approximately 3% of construction value. Annual Form 210 declaration. On sale: 3% withheld by buyer (Form 211), settled on Form 210 within four months.

Capital gains — zero net Bulgarian liability

Bulgaria applies a 10% flat CGT rate on property gains, with important exemptions: residential property held for more than three years is completely exempt from Bulgarian CGT (one property per year). Inherited property is always exempt from Bulgarian CGT. For properties sold within three years, 10% applies.

For Spanish property sales: Spain charges 19% CGT for EU non-residents (primary taxing right under the DTA). Under the credit mechanism, Spain's 19% fully absorbs Bulgaria's potential 10% liability — net additional Bulgarian CGT is zero in virtually all circumstances. For properties held more than three years, the Bulgarian exemption eliminates Bulgarian CGT independently. The combined position is highly favourable: a Bulgarian seller of a Costa del Sol property pays 19% in Spain and nothing further in Bulgaria.

Currency — the BGN/EUR peg and minimal exchange risk

Bulgaria uses the Bulgarian lev (BGN). However, since 1997 Bulgaria has operated a currency board arrangement pegging the BGN to the German mark and subsequently to the euro at a fixed central rate of BGN 1.95583 per EUR. This peg is maintained by law and backed by full euro reserves. Bulgaria is in ERM II, the pre-eurozone exchange rate mechanism, and has been a candidate for eurozone accession. Whether Bulgaria has formally adopted the euro by the time you read this — or is still in the advanced stages of preparation — the BGN/EUR rate has been absolutely fixed for nearly three decades.

In practical terms, Bulgarian buyers of Spanish property have no meaningful currency conversion risk. The BGN/EUR rate has not moved since 1999 and the currency board arrangement makes movement structurally very difficult. Bulgarian buyers can treat their purchase cost in BGN terms as fixed at the rate of 1.95583 BGN per EUR, regardless of when they complete.

Purchase taxes and costs

New-build: IVA at 10%. Resale: ITP in Andalusia at 7%. AJD at 1.2% on mortgage deed. Legal fees 0.5–1.0% plus IVA. Notary and registry approximately 0.5–1.0%. Mortgage arrangement if financing 1.0–2.0%. Budget 12–14% total ancillary cost for a financed new-build.

Bulgarian inheritance tax — direct family fully exempt

Bulgaria levies inheritance tax on Bulgarian residents' worldwide assets, including foreign real estate. However, the most important provision for family purchases is the direct-family exemption: spouses and all lineal heirs (children, grandchildren, parents, grandparents) are completely exempt from Bulgarian inheritance tax with no threshold limit.

For more distant beneficiaries: siblings and children of siblings pay 0.4–0.8% on the value above a BGN 250,000 (~€128,000) threshold. Other beneficiaries pay 3.3–6.6% above the threshold. Rates are set within these ranges by individual Bulgarian municipalities.

In Andalusia, Spanish ISD for direct family is very low: €1,000,000 allowance per beneficiary plus 99% reduction. Bulgarian direct-family inheritance is also exempt. Combined, the total inheritance burden for a Bulgarian family with a Costa del Sol property is among the lowest of any nationality.

A Spanish will (testamento) is recommended. Under EU Succession Regulation 650/2012, Bulgarian nationals may elect Bulgarian law to govern succession.

The buying process

1. Reservation (reserva) — €5,000–€15,000. Retain independent Spanish property lawyer.

2. Private purchase contract — binding. Off-plan: aval bancario required. Your lawyer confirms.

3. Completion — before a Spanish notario. Your lawyer attends or holds power of attorney.

4. Registration — . Four to eight weeks.

Running costs

IBI — €600–€1,200 per year for a standard Marbella apartment. Community fees — €100–€200 per month standard. Annual IRNR declaration on Form 210 — a Spanish gestor for €100–€200 per year.