You buy a property
you cannot move into.
While a person you do not know is alive, you cannot move them out and you cannot buy them out without their consent. And they pay the tax, but they collect the rent.
The rules are in eight articles of the Property Act (Закон за собствеността), written in 1951 and last amended in 1996. A short, old and very stable text that settles everything.
The holder collects the rent. And cannot sell it to you.
Art. 56 of the Property Act says two things in one sentence that almost no buyer connects. The right of use (право на ползване) includes using the property and receiving its fruits. “Fruits” also means rent: the holder of the right of use may not live in the property at all, but let it out and collect the money. The right is theirs, not the owner’s.
And the second: the holder cannot transfer their right. They cannot sell it to anyone, including the new owner. They can only waive it, and the waiver is their voluntary decision.
The combination is awkward: the right cannot be bought, but economically the holder can exploit it for money from a third party.
In the other direction, Art. 57 of the Property Act puts the burden on the holder: they pay the costs of use, including taxes and fees, maintain the property and insure it in favour of the owner. But two traps for the owner are hidden here. On handover an inventory is drawn up, and without an inventory the property is presumed to have been handed over in good condition: fifteen years later the presumption works against the owner. And wear from ordinary use is not owed, meaning the property comes back worn and there are no grounds for compensation.
Six grounds.
Yours: zero.
Death of the holder, expiry of an agreed term and destruction of the property happen on their own, without anyone’s will. The first is automatic, but with an unknown date.
Non-exercise for 5 years (Art. 59(3) of the Property Act) is pursued by the owner, through the courts, and the owner has to prove a negative fact over a five-year period.
Termination by a court under Art. 61 of the Property Act requires a qualified breach: destruction, significant damage or substantial alteration of the property, and that after a warning and continuing. In case law, failure to meet the obligation to insure does not on its own justify termination.
Voluntary waiver depends solely on the holder.
There is no sixth ground in the buyer’s favour. There is no buy-out as of right, no “I pay you and you move out”, and no eviction through the court, because the holder lives there on a legal basis.
And one detail that wrecks calculations: the right is not inherited, but if it was created in favour of two holders, typically spouses, the death of one does not end it. A buyer who has calculated only the father’s age, when the mother is eight years younger and also a holder, has got the whole calculation wrong.
“They moved out 12 years ago, so they gave it up.”
They did not give it up. A waiver is valid only if it is in writing, with the signature certified by a notary and registered in the property register. Decision No. 148 of 5 March 2026 of the Supreme Court of Cassation, Second Civil Division (ВКС, II ГО) (according to an analysis by a law firm; the decision itself was not opened in the original) held that a tacit waiver through conduct is not permissible. If any one of the three conditions is missing, the waiver is invalid.
A holder who moved out twelve years ago, lives in another city and “clearly has no interest in the property” has not waived anything. Their right stands intact and still appears among the registered encumbrances.
The second misconception is that the five years of non-exercise are a way out. They are not, for three reasons. Exercise is interpreted broadly: temporary stays, keeping personal belongings, everyday household activities, business activity. The holder can even let the property to someone else and still exercises the right through them. An elderly person in a care home whose furniture is in the flat is exercising their right.
On top of that, the right does not lapse on its own: a declaratory claim is needed. And the burden of proof is on the claimant, meaning the owner, who has to prove a negative fact going back five years.
The law gives five years.
Life gives seventeen.
First, about the tables on the internet. The widespread “age table” of the kind “up to 40: 80%, 41 to 50: 70%, 61 to 70: 50%” does not exist in the law. The law gives a formula.
Under Art. 23 of Annex 2 to the Local Taxes and Fees Act (ЗМДТ), the tax assessment of the right of use is TA × C, where TA is the tax assessment (данъчна оценка) of the property and C = 1 − 1.05 to the power of minus n, and n is obtained by subtracting the holder’s age from 70. With more than one holder, the age of the youngest is used. For a holder over 70, n is 5. The coefficient cannot exceed 0.900.
For a 65-year-old holder this gives 21.6% for the right of use and 78.4% for the bare ownership (гола собственост). The blog table gives 50%. The difference is more than twofold and underlies every calculation of taxes and fees.
And the number that breaks the whole logic. The law assumes that the use ends at the age of 70. According to National Statistical Institute (НСИ) data for 2023-2025, average life expectancy is 75.9 years, and the expected remaining years for a person aged 65 are 17.0 (men 14.7, women 18.8). The law gives them 5. The difference is 3.4 times.
A buyer who takes the approach “the assessment says the encumbrance is worth 21%, so I pay 79% and in five years the property is mine” is calculating with two wrong parameters at once. The formula is stepped, not smooth, and its value depends entirely on which age bracket the holder falls into.
There is no formula to check the price against
At the notary a different law and a different formula apply. Under Art. 96(2), item 2 of the Notaries and Notarial Activity Act (ЗННД), the material interest when a right of use is created is the market rent for the whole term, and if no term is stated, for three years, regardless of age.
A calculation for a one-bedroom flat in Varna at a rent of €450 a month: material interest under the Notaries and Notarial Activity Act about €16,200. The same right under the Local Taxes and Fees Act, with a holder aged 68 and a tax assessment of €38,000 (an assumption for illustration): about €3,534. One and the same right, two state valuations, a difference of 4.6 times. And neither of them is the market price at which the deal is actually negotiated.
For the market discount on a sale of bare ownership in Bulgaria there are no published statistics with a methodology, and none is invented here. What there is are three reference points, each of which is something else. That is exactly the conclusion: with such a property there is no formula to check whether the price is good. How five different numbers come about for one property: the real price.
The tax is theirs.
The problem stays yours.
Under Art. 11(3) of the Local Taxes and Fees Act, where a right of use in rem has been created, the person liable for the tax is the holder, and the waste collection fee follows the same person. The buyer of bare ownership will not pay building tax or the waste fee.
The risk, however, stays with the buyer. If the holder does not pay, the debt stays on the property’s account, and under Art. 50(1) of the Local Taxes and Fees Act the notary performs a transaction only after establishing that the taxes on the property have been paid. So the owner either pays someone else’s debt or does not sell. More on these two bills: building tax and the waste fee.
And in the deal itself the tax does not drop because of the encumbrance. The base under Art. 46(2), item 1 of the Local Taxes and Fees Act is the higher of the agreed price and the tax assessment, and in any realistic negotiation the agreed price is higher than the tax assessment of the bare ownership. At a price of €70,000 the tax for Varna is €2,100 at a rate of 3%, which is the statutory maximum, not the average.
The encumbrance shrinks what the buyer receives. It does not shrink what they pay the state.
The bargain property that cannot be financed
A registered right of use makes the property poor collateral: the bank lends against something that, in enforcement, cannot be sold at a normal price, because no buyer can move into it. Banks are reluctant to accept such a property as security and usually look for a waiver by the holder, notarised and registered, before disbursement.
⚠️ This is practice, not a legal requirement, and it does not come from the published terms of a specific bank. The practical consequence, however, is clear: the buyer who has found the “bargain” property most often cannot buy it with a loan until they persuade the holder to waive the right. And the holder has no obligation whatsoever to do so. How the bank looks at the collateral: the mortgage loan.
Hence the three reasons the price is lower, in order of weight: no use, meaning the yield for an unknown number of years is zero; no term, while every financial valuation needs a term, and here the term is someone’s life; and no financing, which in itself narrows the pool of buyers to those with cash available.
Even a 43% discount
can be overpaying.
A flat in Varna listed at €70,000, with a neighbourhood median of €123,650 (our market snapshot, alo.bg, 4 September 2026, 196 listings for one-bedroom flats in Mladost). The deed carries a reserved lifelong right of use in favour of the seller, aged 68.
The buyer has €70,000 paid, plus €2,100 in tax, plus the notary fee, and a property they cannot move into and cannot let. There is no legal way to speed anything up, and they cannot undo the deal, because the encumbrance was registered and they were obliged to see it.
And the calculation underneath is the unpleasant part. The National Statistical Institute gives a 65-year-old another 17 years; for a 68-year-old the exact figure is not published in the source used, but the order of magnitude is about 14 to 15. So the €70,000 paid today buys something that, statistically, becomes usable somewhere around 2040. The discounted value of €123,650 in fifteen years at 5% a year is about €59,500.
So the “huge discount” of 43% may turn out to be overpaying. ⚠️ This is an illustration under specific assumptions, not a forecast and not a valuation of a real property. What else is checked before signing: checking the property.
Frequently asked questions
Is the right of use inherited?
No. Under Art. 59(1) of the Property Act, the right of use is extinguished on the death of the holder, unless it was created for a shorter term. It is strictly personal and does not pass to children, a spouse or anyone else. That is also why it cannot be bought out in advance from the heirs: they have nothing to sell. There is, however, an important clarification: if the right was created in favour of two holders, usually spouses, the death of one does not end it and the other continues.
Can the buyer terminate the right of use?
There are six grounds and none of them depends on the buyer’s will. The death of the holder, the expiry of an agreed term and the destruction of the property happen on their own. Five years of non-exercise and termination by a court for a serious breach are pursued by the owner through the courts and are hard to prove. The sixth, voluntary waiver, depends solely on the holder. There is no buy-out as of right and no eviction through the court, because the holder lives there on a legal basis.
Who pays the property tax and the waste fee when a right of use has been created?
The holder. Under Art. 11(3) of the Local Taxes and Fees Act, where a right of use in rem has been created, the person liable for the tax is the holder, and the waste collection fee follows the same person. The same obligation also comes from Art. 57 of the Property Act. The risk for the owner remains, however: if the holder does not pay, the debt stays on the property’s account, and the notary cannot execute a subsequent transaction until the taxes have been paid.
How is the value of the right of use calculated?
By formula, not by table. Art. 23 of Annex 2 to the Local Taxes and Fees Act gives the tax assessment of the right of use as TA × C, where C = 1 − 1.05 to the power of minus n, and n is obtained by subtracting the holder’s age from 70; for a holder over 70, n is 5. For a 65-year-old holder this gives 21.6% for the right of use and 78.4% for the bare ownership. The age tables circulating on the internet, which give 50% for a 65-year-old, do not exist in the law.
One age, and then the second
Ask how old the holder is. Then ask whether there is a second holder and how old they are. The second question is the one that wrecks the calculations, because the formula takes the age of the younger one, and the death of one ends nothing.
Send us the ages and exactly what the encumbrances say. We send back what the right is worth under each of the two state formulas and which of the six grounds for termination are really on the table.
This material is not legal advice and not a valuation of a property. The specific case is checked by a lawyer.
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