Waste fees fall under the category of municipal fees that each municipality collects. They are owed for the respective real estate that falls under the territory of each municipality.
The size of the waste fee is different for each owner, since the process of its calculation involves several different types of information regarding the owner and the real estate itself. They play a major role in the final size of the annual fee.
In this article we will outline the basics of the methodology of calculating waste fees and how we can optimize their size in different circumstances.
Who is the owner of the property?
The first factor that will determine what will be the methodology for calculating the waste fee is to determine whether the owner of the property is а natural person or a legal entity. The possibilities here are 2. The first, the owner to be a natural person, the second owner to be a legal entity.
Natural persons – real estate for residential purposes
In order to determine the amount of the waste fee for real estates owned by individuals for residential purposes, the tax valuation of the real estate shall be used. The tax valuation is calculated by the Local Taxes and Fees Department of the respective municipality. Every individual who has acquired a real estate is obliged to submit a declaration of ownership, which indicates the type and characteristics of the property. This information is taken into account in the calculation to determine the final tax valuation on which the local tax and waste fee will be calculated.
Fees for non-residential properties of legal entities
Waste fees for non-residential properties (commercial properties) owned by enterprises is determined:
- by the amount of waste in accordance with the type and number of containers for its storage and the frequency of waste transport;
- via direct negotiation;
- proportionally in promilles (1/1000)
The standard procedure to determine the amount of the annual fee is in promilles according to the tax valuation of the property. For Sofia the amount is 10 promilles on the tax valuation or on the book value, whichever is greater. This amount covers all three pillars of the municipal waste fee. The distribution is as follows:
- 3,30‰ for waste collection and waste transport of household waste;
- 2.40‰ for disposal at landfills or other waste management facilities;
- 4.30‰ for maintaining the cleanliness of public areas;
This type of calculation of the amount of the fee is most advantageous for properties with a relatively low book value/tax valuation.
Things look differently if the property has a higher tax valuation or book value. Oftentimes there are properties with very high book value, which gather way fewer waste and pollute way less than a property with a low book value. There are also cases, in which the property isn’t even in use. What can we do in these circumstances?
Calculation in accordance with the amount of household waste
To determine the waste fee for household waste of non-residential properties of enterprises, which fall under the scope of organized waste collection and transportation, enterprises file a declaration in two copies for the type and number of containers for household waste, which will be used over the following year. For the city of Sofia this needs to be done between the 1st of October and the 30th of November of the previous year. This filing can also happen online, but it must also be printed and filed to the mayor of the Municipality of Sofia through the Directorate of Economics and Business (Дирекция “Икономика и търговска дейност”).
With a declaration, companies pre-declare the type and number of waste containers they will use next year. Upon approval by the municipality (after an on-site inspection), the company is obliged to pay the price set by the municipal council for the type of container and frequency of transportation (once a week for 2021).
The municipality determines the annual price of the containers. For the city of Sofia, for all regions, the value of one container with a capacity of 1100 liters is BGN 1340. A container with a capacity of 3.5 cubic meters – 4 cubic meters costs BGN 8030. These are the prices when transporting the respective container once a week.
Alongside the price of the containers, enterprises also pay a fee for the cleaning of public areas, proportional to the book value of the properties. For 2021, in Sofia, the fee is 4,3 promilles.
Example: For a property with a book value of 500 000 BGN, this fee amounts to 2150 BGN.
Thus, the company will owe a total of BGN 3,490 for 1 small container and maintenance of the territories for household waste. If the proportional calculation with 10 per mille was used, the amount would be BGN 5,000. This makes an annual optimization of this cost of BGN 1,510.
The second option is to determine the fee amount by direct negotiation with a waste management company. In this case we can agree specifically with the company, the service of garbage collection and disposal. The amount of the municipal waste fee will consist of the following components:
- 2.80%о (promilles) on the book value of the property, for disposal in landfills or other facilities of the household waste;
- 4,30%о(promilles) from the book value for maintenance of the cleanliness of public areas;
- The costs of the services, negotiated with the waste management company.
Depending on the last component and the book value of the property, the final amount may be smaller or larger than the previous two options. This option is suitable for places where the municipality itself does not support the garbage collection and disposal service.
Waste fees for residential properties of individuals and legal entities
For natural persons and legal entities, the waste fee is 1,6 promilles from the tax valuation of the property. Тhis is a significantly lower value than the ones considered so far.
Example: Waste fee for a family apartment with a tax valuation of 500 000 BGN in 2021 is 800 BGN.
Reduction of fees
If you do not use the property throughout the year, you can be released from the obligation to pay fees for garbage collection and disposal. For this purpose, it is necessary to declare this in the municipality in the previous year. The reduction will be in accordance with the determined promilles for this component of the waste fee. For example, in Sofia it is 3.30 ‰ for commercial properties, and 0.53 ‰ for a residential properties.