The most cautious form
is also the most expensive today.
Between parent and child a gift carries zero tax. The same property transferred for maintenance and care costs €1,350. That is exactly why the price is paid elsewhere later.
The three forms differ by one sentence each. A gift (дарение) is free of charge and final today. A sale is for consideration and almost irrevocable. A transfer in exchange for maintenance and care (издръжка и гледане) is for consideration, but its price is not a sum but conduct that is still to come.
The exemption covers fewer people than you think
Under Art. 44(6) of the Local Taxes and Fees Act (ЗМДТ), property acquired by gift between relatives in the direct line and between spouses is not taxed. That is the whole circle. Brothers, sisters and their children pay a reduced rate, for Varna 0.8%. Everyone else pays 6.6%.
“Everyone else” includes people the family counts as close: daughters-in-law, sons-in-law, cousins, aunts and uncles by marriage. The difference between a brother and a cousin for one and the same gift is eightfold.
Illustration with a tax assessment (данъчна оценка) of €45,000 and a market price of €100,000, Varna. Parent to child: €0. Brother to sister: €360. Father-in-law to daughter-in-law: €2,970. Sale at market price: €3,000. Transfer for maintenance and care: €1,350.
The ratio that decides it: the most cautious form is also the most expensive today.
A gift can be revoked.
A sale cannot.
Art. 227(1) of the Obligations and Contracts Act (ЗЗД) gives three exhaustive grounds: an attempt on the donor, false accusation of a serious crime, and refusal to provide maintenance that the donor needs. Practically all case law concerns the third.
And that is exactly where the trap is. “Refuses” does not mean “does not give”. Two things are required at the same time: the donor must actually be in need, and the recipient must have been asked and have refused. Silent non-involvement, without a single request, is hard to prove.
The time limit is one year and it is preclusive: it runs from learning of the grounds and cannot be restored. The heirs can continue a claim already started, but cannot start it anew.
Two more details. A prior waiver of the right of revocation is void, meaning a clause in the deed saying “the donor waives the right of revocation” is worth nothing. And revocation does not affect the rights of third parties acquired before the statement of claim was registered: if the recipient has resold, the donor wins the case and gets not the property but compensation.
A sale has no equivalent of this. There is no legal provision that undoes it because relations have broken down; only nullity or termination for an unpaid price.
The mechanism that only works after death
A gift is not final in another sense either. When the succession opens, an estate is formed from everything the deceased owned, minus the debts, plus the gifts, except customary ones.
And here is the line that breaks families apart. Under Art. 31 of the Inheritance Act (ЗН), gifts are added according to their condition at the time of the gift and their value at the time the succession opens.
So the condition is judged as of the day of the gift, and the price as of the day of death. A flat gifted in 2005 at €20,000 enters the estate in 2026 at its current value, and the renovation carried out in the meantime does not count, because the condition is judged as of twenty years ago. A gift is cheaper for tax and more expensive for inheritance, with all the growth of the market.
The fractions: with two or more children and no spouse, the reserved share is 2/3; with a spouse and three children, the freely disposable share falls to 1/6 (Art. 29 of the Inheritance Act). Gifts are cut back in order, from the last to the first. Related topic: the inherited property.
Maintenance and care:
there is no “I almost did it”.
The contract is bilateral, for consideration, formal and aleatory: when it is signed nobody knows how much it will cost, because the person cared for may live a month or fifteen years. That uncertainty is its basis. It is not regulated in the law, meaning the parties write its content and the court sets its limits, case by case.
The obligation is single and indivisible and is performed continuously and in full. Non-performance for a given period cannot be made up later, and non-performance of part of what is owed is grounds for full termination of the contract. There is no “I almost did it”: there is performed and not performed, and the second takes the whole property down.
Termination happens through the courts and has retroactive effect, and the heirs can seek it even after death, for non-performance during the person’s lifetime.
And the most unpleasant part. If at signing the acquirer knew of the imminent and inevitable death of the transferor, the contract is void: there is no uncertainty, so there is no basis. So the contract signed at a hospital bedside in the last weeks is exactly the one the court sets aside most easily. The form chosen to protect is chosen at the moment when it no longer protects.
“We’ll sell it for five thousand” fails in three ways
First, the tax does not drop. The base is the higher of the agreed price and the tax assessment, meaning you cannot go below the assessment. With an assessment of €45,000 and a “price” of 10,000, the tax is still €1,350.
Second, the simulation comes to light. If the deal conceals a gift, it can be challenged under Art. 17 of the Obligations and Contracts Act. Proof is difficult and usually requires a counter-letter or the beginning of written evidence, but when it succeeds, the concealed transaction comes to light with all its consequences, including its return to the estate.
Third, and this is the number that comes later. The recorded price becomes the acquisition price for future tax under the Personal Income Taxes Act (ЗДДФЛ). On a later resale the taxable gain is calculated from it, meaning the few hundred euros saved today are paid tomorrow on a gain of tens of thousands. How five different numbers come about for one property: the real price.
Not the tax.
The question “what if it falls apart”.
The three forms rank differently depending on what the family is asking.
If the question is “how much will we pay today”, between parent and child the gift wins with zero.
If the question is “it must not be possible to take it back”, the sale wins: it is not revoked because of relationships and does not enter the estate.
If the question is “I want care while I am alive”, only maintenance and care gives leverage, and it is the sharpest of the three: one unperformed quarter takes down the whole property. For the acquirer this is also the highest risk, and for the transferor the only form that leaves something in their hands.
And one detail with a co-owned property: selling a share triggers the right of pre-emption under Art. 33 of the Property Act (ЗС), and the share must first be offered to the co-owners. A gift does not trigger it, and that is exactly why it is used to get around it. In detail: co-ownership and partition.
Frequently asked questions
Which relatives do not pay tax on a gift of property?
Only relatives in the direct line and spouses. Under Art. 44(6) of the Local Taxes and Fees Act, property acquired by gift between relatives in the direct line and between spouses is not taxed. Brothers, sisters and their children pay a reduced rate, which for Varna Municipality is 0.8 per cent. Everyone else, including daughters-in-law, sons-in-law and cousins, pays 6.6 per cent. The difference between a brother and a cousin for one and the same gift is eightfold.
Can a gift of property be revoked?
Yes, but only on three exhaustive grounds under Art. 227(1) of the Obligations and Contracts Act and within a one-year preclusive period from learning of them. Practically all case law concerns the third: refusal to provide maintenance that the donor needs. “Refuses” does not mean “does not give”: the donor must actually be in need and the recipient must have been asked and have refused. A prior waiver of the right of revocation is void, and revocation does not affect the rights of third parties acquired before the statement of claim was registered.
Does the gifted property form part of the inheritance?
Yes. Under Art. 31 of the Inheritance Act, gifts are added to the estate, with the condition of the property judged as of the time of the gift and its value as of the time the succession opens. So a flat gifted twenty years ago enters the calculation at its current price, and the renovation carried out in the meantime does not count. Transactions for consideration, including a transfer for maintenance and care, are not included unless simulation is proven.
Is it worth selling the property at a symbolic price?
No. The base for the acquisition tax is the higher of the agreed price and the tax assessment, meaning the tax does not fall below the assessment and the saving is smaller than it looks. Separately, the recorded price becomes the acquisition price for future tax under the Personal Income Taxes Act: on a later resale the taxable gain is calculated from it. And if the deal conceals a gift, it can be challenged as simulated.
One question before the notary
Not “which form is cheaper”, but “what should happen if relations break down”. The answer to the second question chooses the form, and it is the only line that cannot be fixed later.
Send us the family relationship and the tax assessment. We send back the three calculations side by side, with what can be taken back, by whom and within what time limit.
This material is not legal or tax advice. The specific case is checked by a lawyer.
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