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Jun 22, 2026 23:11
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| "Homes Are for Living, Not Speculation" as Bulgaria Considers Higher Tax on Multiple Properties | ||
| Monday, Jun 22, 2026 | ||
| The debate over property taxation has moved to the forefront of Bulgaria’s fiscal agenda, with politicians and experts discussing whether owners of multiple homes should face progressively higher taxes. Supporters of the idea argue that housing should primarily serve as a place to live rather than as a speculative investment, while critics warn that any additional burden could ultimately be passed on to renters and ordinary households. Speaking on national television, Konstantin Prodanov, chairman of Parliament’s Budget and Finance Committee from Progressive Bulgaria, rejected concerns about income restrictions, insisting that wages and pensions would continue to rise. “There will be no income freeze, and no pensioner or worker will lose income. Bulgarians will become wealthier through what they earn, not through borrowing,” he said. Prodanov defended the proposal for a progressive property tax, explaining that a primary residence would remain subject to the current approach, while additional properties could be taxed at increasingly higher rates. “If someone owns three or four homes not for living but as investments, the second property should be taxed more than the first, and the third more than the second,” he argued. According to him, such a measure could help cool an overheated housing market that has pushed ownership beyond the reach of many young people. On the issue of public administration reform, Prodanov said that any move requiring civil servants to pay their own social security contributions would have to be fully compensated through higher salaries. “They should not lose a single lev in net income after such a change,” he stated. He also reiterated that any staff reductions in the state administration would follow detailed analysis and that salary limits should ensure no department director earns more than a minister and no public official receives more than the president. At the same time, he stressed that Progressive Bulgaria remains committed to preserving the current income tax system. “We made a clear election promise not to change it,” he said, distinguishing the debate over property taxes from proposals for progressive income taxation. The government is also preparing broader changes to the way real estate is taxed. Prime Minister Rumen Radev recently signaled support for updating property tax assessments, which many experts consider outdated after nearly two decades without a substantial revision. Representatives of the National Association of Municipalities said they had received assurances that the process would move forward this year as part of wider efforts toward fiscal decentralization. Radev suggested that a different approach should apply to primary residences and additional homes. “The first home where a person lives should remain at the same value. The following ones can be taxed on an increasing scale,” he said. However, he also warned that policymakers must proceed carefully because higher property taxes could eventually contribute to rising rental costs. The discussion comes as municipalities continue to push for a larger share of tax revenue, including a proposal to redirect one-fifth of income tax receipts to local governments. Supporters argue that such a step would strengthen municipal finances without formally increasing the tax burden on citizens. Market participants expect any progressive tax system to influence real estate behavior. Some property owners may choose to sell unused homes, while others could decide to rent out properties that have remained vacant in order to offset higher tax costs. Economists believe the measure could contribute to a moderation of price growth, especially at a time when demand is already showing signs of slowing. There are concerns, however, that landlords may transfer part of the additional expense to tenants. Renters interviewed by local media expressed fears that monthly rents could increase if owners face higher taxes. Real estate brokers echoed those concerns, noting that investment properties are likely to pass at least some of the extra cost on to end users. Experts also argue that any tax reform should be accompanied by visible improvements in public infrastructure, including roads, sidewalks, schools, kindergartens, and parks. Without such investments, public support for higher property-related taxes may be difficult to secure. The issue is particularly sensitive because property tax assessments remain the foundation for calculating local taxes and waste collection fees. While reform could create a fairer system and address undervalued property transactions, analysts warn that a poorly designed overhaul could disproportionately affect low-income households, owners of inherited properties, and tenants. For now, significant changes are not expected before 2027, but the debate over how housing should be taxed is already shaping discussions about Bulgaria’s future fiscal policy. |
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| Source: www.novinite.com | ||
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