Bulgaria Capital Sofia with Record Low Revenue from Real Estate Deals

Bulgaria's capital Sofia has received under 30% of the real estate revenue it expected in the first three quarters of 2009. Photo by BGNES

The crisis on the Bulgarian real estate market has affected severely the budget of the capital Sofia.

In the first three quarters of 2009, the Sofia Municipality raised only 28% of the total revenue for the period that it expected from property deals, according to data for the performance of the municipal budget. The local tax on real estate transactions is one of the major sources of revenue for the budget of the Bulgarian capital.

For all of 2009, the Sofia Municipality expected a total revenue from the real estate deals of about BGN 155 M, which was supposed to be 26% of the total municipal revenue.

However, only BGN 43,5 M were raised from the local tax on property deals in the first nine months of 2009.

The Sofia Municipality is performing better on other sources of revenue – 71% of the envisaged building taxes have been collected, and so have 91% of the car taxes.

In the first nine months of 2009, the Sofia Municipality had a total revenue of BGN 751,5 M vs. expenditures totaling BGN 666 M.

The acting Sofia Mayor Minko Gerdzhikov has stated he hoped that the municipal budget would end 2009 without a deficit.

In his words, a potential deficit in the budget would be compensated with additional revenue from anti-crisis measures such as collecting more of the overdue payments owed to the municipality.

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