Topical Information

The Management Board of National Association of Municipalities in the Republic of Bulgaria reviewed and adopted the annual analysis of local tax rates and local fee levels for 2026, prepared on the basis of data from 247 municipalities (93.2% of all municipalities).

The analysis presents the main trends in local revenue policy for 2026, including changes compared to 2025 and developments over the 2020–2026 period.

The data show that 2026 is a year of stabilization following the more active tax policy of 2025. The share of municipalities that do not change their rates is increasing across all major taxes, which is a sign of “cooling”, but not a return to previous inertia.

At the same time, several important trends stand out.

For the real estate tax, most municipalities are maintaining their rates, but some have already reached or are approaching the legal maximum, which limits the possibility for further revenue increases.

For the “transaction tax” (tax on property transfers), a more differentiated policy is observed – an almost equal share of municipalities are increasing and decreasing rates, with many already close to the legal ceiling.

The vehicle tax remains with limited growth potential, as in most municipalities rates are kept close to minimum levels, and revenue growth depends mainly on collection efficiency.

The analysis also notes a gradual increase in the tourist tax, but significant untapped potential remains, as average rates are still far below the legally allowed maximums.

A key focus is the reform of the waste collection fee, which in 2026 is still in an early stage – only eight municipalities are applying the new bases, while over 96% remain in a transitional regime.

The analysis also highlights the significant amount of foregone revenue due to legally introduced tax reliefs and discounts, which amount to over EUR 70 million annually. In this regard, National Association of Municipalities in the Republic of Bulgaria raises the issue of the need for a compensation mechanism from the state.

Based on the conclusions, the Management Board confirms the need for active dialogue with the Ministry of Finance for reforming the local revenue base, including updating tax valuations, expanding tax ranges in certain areas, and ensuring greater financial sustainability for municipalities.