Construction firms will have to register for VAT before selling even their first new home, under a proposal from Bulgaria's finance ministry. The change is part of the 2027 tax package and covers everyone selling new buildings and plots in Bulgaria who is liable for VAT.

Firms will have to apply for VAT registration at least 7 days before tax on their first taxable sale becomes due, whether or not they've passed the turnover threshold. The ministry expects the new rule to raise an extra 120 million euros a year.

Deputy finance minister Lyudmila Petkova said: "This step aims to stop firms from hiding VAT or not paying it."

The ministry says firms often build and sell off a whole project in a short time, so turnover crosses the threshold only once the deals are done — by which point the firm has nothing left to sell when the duty to register kicks in. The aim is to stop sellers registering only after they've already sold everything.

The rule covers sales of new buildings or parts of them, the land they stand on, and the granting or transfer of building rights on a regulated plot. Only these sales trigger registration — a firm's other sales don't become taxable because of it. VAT stays at 20% of the tax base; only the timing of registration changes.

Under the VAT law, a building counts as "new" for 60 months from the date it gets its occupancy permit or use certificate — not from the year it was built. Buildings still at shell-and-core stage count too.

The change will mainly hit companies set up for a single building project, and sellers of new buildings and land who aren't yet registered. Large construction firms will feel less of an impact, since they already charge the tax.

For ordinary people, not every sale of a new home you own triggers the tax. What matters is whether the sales are regular and made for profit — selling your own home once doesn't turn you into a business just because of its value.

From 2027, the ministry also wants to raise the general VAT registration threshold from 51,130 euros to 75,000 euros.

The tax package also raises property valuations for tax purposes by 30% next year, rising to 100% above the 2026 base by 2029. In towns where household waste fees are based on tax valuation, officials plan a fix so the higher valuations don't automatically mean higher fees, Petkova said. The higher valuations will also make property transfers more expensive when the agreed price is below the tax valuation.

Buyers of a new home can ask for their preliminary contract to state clearly whether the price includes VAT and under what conditions it could change.

The proposals are going through parliament, and their final form depends on lawmakers.