Have Tax Questions? Ask a Tax Expert for Answers ASAP
Hi and welcome to Just Answer!Are you concern about tax liability in Bulgaria or in another country?Where do you live and where did your father live?
Yes Bulgaria. Me and my father live in Engalnd.
Please give me some time...
If you do not have a permanent address in Bulgaria or stay in Bulgaria for less than 183 days during the year – you a non-resident for tax purposes.
That means – you pay taxes only on your income from sources inside the Republic of Bulgaria. Income from rent or selling the property located in Bulgaria – are treated as income from Bulgaria sources.
If you sell the property – the gain is a subject of reduced tax rate on the capital gain – 10%.
However – income from rent is a subject of mandatory tax withholding which are considered final taxes. Also income from sale of immovable properties (such as real estate) is also a subject of mandatory tax withholding which are considered final taxes.
So - it is very likely that the management company takes care for your and your father’s income tax liability – and very likely they paid property taxes for your rental properties.Regardless – that should be verified and I strongly suggest contacting the management company.
Thanks for the reply. So basically the chances are the rental company sorts all the taxes out over the years. And if I sell the property 10% of the value will go to tax?
That is correct - it is very likely that the management company paid all required taxes on rental income because they are required to do that and are controlled by local tax authorities.If you sell the property - you will be liable for income taxes on capital gains which is 10% and which will be withheld as well. However - it would be for your advantages to verify that capital gains are calculated properly.