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Updating property tax valuations is an overdue but necessary measure that municipalities have been proposing for years, NAMRB Executive Director Silvia Georgieva said on bTV’s morning programme This Morning. She discussed the issue with financial analyst Deyan Vasilev and Georgi Angelov, Senior Economist at the Open Society Institute.

“Updating property tax valuations is a long-overdue measure. Municipalities have been waiting for this for a very long time and have been proposing it for the past 30 years,” Silvia Georgieva said.

The proposed tax package provides for an increase in property tax valuations of up to 30% from 1 January 2027. NAMRB’s Executive Director stressed that this would not automatically result in an equivalent percentage increase in property tax. Updating tax valuations falls within the central government’s powers, while the applicable tax rate in each locality is determined by the respective municipal council.

“The increase will certainly be no more than 30%. I say ‘no more’ because updating tax valuations is a central government prerogative, whereas the exact amount of tax residents pay in each locality is in the hands of the municipal council,” Georgieva explained.

She noted that the impact would differ between major cities and smaller settlements. In many villages, property tax valuations are close to the tax-exempt threshold, currently €870, and many properties are not taxed at all.

“The change will be moderate. Municipal councils have this tool at their disposal and will apply it in accordance with the socioeconomic conditions in each locality. It will not be the same in Sofia as in smaller settlements,” NAMRB’s Executive Director said.

As an example, she said that a property with a tax valuation of €30,000, currently subject to an annual tax of €60, could see that amount reach €75 following a 30% increase in its valuation.

Silvia Georgieva emphasised that a property’s tax valuation should not be equated with its market price. It is calculated using a formula that takes into account various factors, including location, construction type and use. A property with a tax valuation of €30,000 could have a market value of between €150,000 and €200,000.

“Although overdue, this update is absolutely necessary. It is very important that the proposed package introduces it gradually, ensuring a balanced adjustment over the next three years without a sharp move towards market values,” Georgieva added.

She recalled that owners of properties declared as their main residence are entitled to a 50% reduction in property tax.

NAMRB’s Executive Director also commented on the implications for household waste collection fees. She explained that higher tax valuations would not automatically lead to a 30% increase in the fee. If a municipality continues to calculate the fee on the basis of property tax valuations in 2027, the law allows it to use the 2026 valuations.

“The household waste fee will not rise by 30%, because we will calculate it using the 2026 basis. This mechanism was proposed specifically to keep the fee affordable,” Georgieva explained.

Financial analyst Deyan Vasilev highlighted the potential impact of the changes on the property market. In his view, higher ownership costs could encourage owners of vacant homes to rent them out or sell them.

“When you own a property, you have a responsibility to contribute to infrastructure, a better residential environment, pavements and kindergartens,” Vasilev said.

Senior Economist Georgi Angelov argued that main residences should be protected, particularly for lower-income households, while investment properties should be taxed differently.

“There should be protection for a first home, particularly for lower-income households. But second, third or fifth homes held for speculative purposes should be taxed at market value,” Angelov said.

Watch the full discussion on bTV’s website.