Spaska Petkova

Tax Relief for Young Families with a First Home Loan

Local individuals (Bulgarian tax residents) may utilise tax relief for young families by deducting the interest payments made during the year on a mortgage loan for the purchase of a home from the total amount of their annual tax bases under Article 17 of the Personal Income Tax Act (PITA), provided the following conditions are simultaneously met:

• The mortgage loan agreement is concluded by the taxable person and/or their spouse, with whom they have a civil marriage
• The taxable person and/or their spouse have not reached the age of 35 as of the date of concluding the mortgage loan agreement
• The mortgaged property is the only home owned by the family during the tax year.

The tax relief is utilised up to the amount of the total annual tax bases under Article 17 of PITA and is conditional on the taxable person presenting a written declaration from the spouse confirming that they will not use the tax relief for the respective tax year.

All these circumstances and conditions must be declared by the individual in Appendix No. 10, which is an integral part of the Annual Tax Declaration.

The relief may be utilized by local individuals, as well as by foreign individuals established for tax purposes in a Member State of the European Union or another state party to the Agreement on the European Economic Area, for the interest payments made during the year on the first BGN 100,000 of the principal of the mortgage loan.

The tax relief can only be claimed by submitting an Annual Tax Declaration, to which a document issued by the creditor bank must be attached, certifying the amount of the interest payments made during the year on the first BGN 100,000 of the mortgage principal used for the purchase of the home.

All these services are provided to you free of charge!