Tax Relief for Home Renovations – What Are the Requirements?

Every year, thousands of households in Bulgaria decide to renovate their homes. The cost of labour for tradespeople is eligible for tax relief, but how many of us actually claim it, and what are the requirements?

At a DIY store, we meet Georgi, who is preparing to renovate his bedroom. Although he knows about the tax relief, he has never taken advantage of it.

Georgi: “I’ve heard of it, but I’ve never needed to claim it because I’ve used tradespeople who don’t issue invoices. Friends do some work for me, I pay them, and that’s that.”

“I renovated my bedroom 10 years ago, and now I’ve promised my wife I’ll do it again, so I’m here collecting materials.”

Since 2021, the state has offered tax relief for the cost of labour when renovating a home, but not for materials. To qualify, applicants must meet several requirements: they must own or co-own the residential property, the tradesperson must not be a relative, and they must have no outstanding tax liabilities to the state.

Magi Bogdanova, accountant: “Quite often, tradespeople don’t issue invoices. Without proof of payment, you cannot demonstrate your entitlement to this tax relief. The next requirement is to have an invoice issued by the tradesperson for the work they carried out on your property. This can be an invoice or another document containing all the details required on an invoice, including dates and a number.”

The maximum tax relief available is €102.26. According to the National Revenue Agency, relatively few people take advantage of it.

In 2025, a total of 886 people declared that they had claimed tax relief for improvements and/or renovation work on residential property. For the 2024 tax year, 751 people claimed the relief.

The documents required are an invoice for the labour carried out, proof of payment for the work, and completion of Appendix 10 to the annual tax return. However, most tradespeople do not issue such documents because they operate in the informal economy. The relatively small amount of tax relief available further reduces people’s incentive to claim it. In practice, only certain companies and registered tradespeople operate legally and declare their income.

Magi Bogdanova, accountant: “These are mainly construction companies with a Unified Identification Code (UIC), which they register and use to issue invoices, so everything is in order. Another option is a self-employed professional, such as a tradesperson, bricklayer or electrician, who has registered with the Commercial Register and received a number under which they can also issue invoices. If you have such a document, everything is in order.”

The documents do not need to be attached to the tax return, but they must be kept in case the National Revenue Agency requests them.