Luxury Tax on Big Cars, Properties

Luxury Tax on Big Cars, Properties

Bulgaria will introduce as of next year higher levies on luxury properties and big cars to help fight the economic crisis and keep down the fiscal deficit, under amendments to the law on taxes, published on the site of the finance ministry.

Under the amendments the highest threshold for levying a tax on a property will increase from 2.5 permilles to 4.5 permilles of the property evaluation.

The tax for luxury properties, whose evaluations are above the average levels for the particular town, will be 30% higher.

Owners of cars, whose engines output power exceeds 200 horsepower, will also pay higher taxes.

The new tax was announced for the first time in March after an extraordinary cabinet meeting called to discuss anti-crisis measures. It is part of a package of new measures, which also include floating minority stakes in state-owned companies and a possible bond issue.

The center-right government focused its austerity measures on the wealthy, after its plans to raise the healthcare tax and cut benefits to civil servants triggered protests.

Mayors however have warned that the introduction of the new levy will enrich only the budgets of the bigger municipalities such as Sofia, Varna and Burgas.

According to them owners of luxury property are likely to try to evade taxes by transferring what they have onto companies.

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