Any individual possessing a building located in Romania owes an annual tax. This levy needs to be paid to the local budget of the corresponding region, city or municipality where the house is situated.
Our accounting firm in Romania can help you with proper information and guidance in order for you to pay the right taxes for your belongings.
Annual taxation on buildings
At the moment, the tax rates have maximum values, calculated on the price of the building, as follows:
- 0.2% for residential buildings.
- 1.3% for non-residential buildings.
Startig with 2023, the tax on buildings will be separated only according to the type of the building, increasing the minimum rates, with no longer a maximum threshold, as follows:
- 0.1% for residential buildings.
- 0.5% for non-residential buildings.
The tax is calculated based on the price of the property. Also, local authorities can apply higher tax rates, but without exceeding the maximum limit by more than 50%.
Annual taxation on land
Every individual that owns a land in Romania needs to pay an annual levy with specific exceptions. This tax is owed to the local budget of the region, city or municipality. If the land is located in Bucharest, the taxes are to be paid to the local budget of the municipality’s sector.
In Romania, the property tax is established taking into consideration the number of square meters, the score of the particular location of the land and its type per the decision of the Local Council. One should note that the Romanian property tax needs to be paid annually in 2 equal rates, first until the 31st of March and second until the 30th of September.
How is the taxable value of buildings in Romania calculated?
According to the current legislation, the taxable value of a building is determined differently depending on the type of owner and the building.
More specifically, in the case of a residential building owned by a natural person, this value is calculated as follows:
- According to the area in which it is located.
- The type of construction.
- Particular factors provided for in the legislation.
In the case of a legal person, regardless of the type of building, the value is determined like this:
- In accordance with the final estimate of the construction works.
- Purchase price or the value from the last evaluation report.
It is important to note that starting with 2023, no matter the type of the owner or the category of the building, the taxable value of a property will be defined according to the data delimited in the market studies administered by the National Union of Notaries Public in Romania, and the notary grids.
An exception is the case where the values from these studies are lower than the existing ones, from the local authorities’ record, respectively those regulated according to the legislation in force on December 31, 2022 for residential buildings, for which the tax for 2023 will be determinated taking into account the bigger value.
For a better understanding of the Romanian property tax, please feel free to address to one of our accountants in Romania. We are updated with the legislation and we can explain more on this topic.
Taxation for ownership transfer in Romania
Presently, the tax owed by natural persons in Romania on the transfer of real estate property is set at 3% rate imposed on the taxable income. As such, the taxable income is calculated by deducting from the value of the transaction the non-taxable amount of 450,000 lei.
There are also cases where there is no tax owed for the debate and conclusion of successions within 2 years from the date of the death and inheritance. However, if the completion of the succession process is beyond the term mentioned above, the successors owe a tax of 1% calculated on the value of the inherited estate.
The tax on land is paid in 2022 for both extra-urban and intra-urban areas. The owners are the ones who have to pay the land tax in 2022. Here are other details on this topic:
- In the case of new acquisitions, the reference term for payment or Romanian property tax on land is 31 December 2022.
- The tax for land must be paid by the person who, by the end of 2021, was listed as the owner of that land, even if in the meantime the surface has been alienated.
Paying extra for Romanian property tax
According to the changes brought by O.G. 16/2022, local taxes can increase 2-3 times in large cities in Romania, if the minimum rate of 0.1% is maintained. It is also possible that this rate will reach 0.2% in other areas, according to the draft Ordinance 16/2022, and more precisely in areas with high market prices, where the tax can reach a 10-fold increase compared to the current rates. If you would like to know more about the Romanian property tax and the legislation for 2023, please address your questions to one of our local specialists.
Please feel free to contact our accounting specialists in Romania for extra information regarding the Romanian property tax.