Property taxes in bigger cities like Sofia Varna and Bourgas are to increase by 30 per cent. The increase is a result of the higher tax valuation of real estate that is to take effect at the beginning of next year. The Finance Ministry is working on changes to the law on local taxes, by which property tax valuations will increase by 30 per cent in towns, by 25 per cent in smaller cities and by 20 per cent in small towns and villages. As a result of this, real estate taxes will increase as well. The exact tax is determined through additional other factors. These include the type of construction, location within a building and infrastructure characteristics.
The International Monetary Fund has demanded an update to property valuations, which determine the amount of taxes. The IMF based its request on the increasing market prices of Bulgarian property. Data of the National Statistical Institute shows that from 2000 to 2004, real estate in bigger cities has become 200 to 300 per cent more expensive. At the same time, tax valuations were last updated in 1998, Novinar newspaper reported.