Probably the most attractive feature of buying real estate in Romania is the value for money aspect. Property prices, although rising, are still incredibly good values. Romania is full of stunning scenery and an amazing climate, and there are mountain views all around.
It is home to winter sports such as skiing and the mountains make it a real tourist attraction. The weather in Romania is mixed; Depending on where you are in the country, you can expect to see a range of different weather patterns, but now we only have 2 seasons. Inland weather is more continental with cold winters and snow, but the summer season is hot and humid.
The coastal areas are more temperate, and you will see mild autumn, cooler winters, mild spring, and warm, carefree summers. It is characterized by the lack of dull days of rain that you see in England.
While the cost of living is very attractive (around 60% of the cost of the UK), you need to know how the culture works in Romania, for example when it comes to buying real estate; Morales is different in Romania, and things that are considered wrong or viewed incorrectly in Britain are viewed very differently in Romania and are part of their day-to-day culture. It is a good idea before you leave your research, or contact ex-pats to find out how to run the country now.
Getting Started – Is it possible for a foreigner to buy land in Romania?
Yes. From 2012 onwards all foreign non-EU citizens can purchase land in their name as per Article 612/2005 of the law. This article mentions that the status of holding land as a non-EU citizen may not be less favorable to those who are citizens of the EU. According to the same law Art 4, any citizen of the European Union can own land from 2012.
It also means that no EU citizen is subject to any obligation for Romanian residence or the surrounding land quota. It needs to be mentioned that the interpretation of the law (or enforcing it) depends on a good, well-informed public notary. EU citizens are treated the same as Romanian citizens and there are no restrictions for purchase.
You should also add a for-profit 5% VAT rule, which may apply to anyone purchasing a property, for example, from a developer or company. For any company (such as a developer) to sell a property to a private person, it will have to invoice it with standard 19% VAT. But as a first-time buyer in Romania, the selling price can only be reduced by including 5% VAT, if the property is lower. According to the Government Emergency Ordinance 200/2008, an amendment to the fiscal code, individuals can purchase with a lower VAT rate if
- The asset purchase price, excluding VAT, is less than 380,000 RON in Euros.
- Usable surface space is 120 square meters
- The land quota does not exceed 250 square meters
- The 5% VAT rule can only be applied once per person/family. As an example: a husband and wife can avail only one. If they are a boyfriend/girlfriend, and the girlfriend does not appear on the title of the boyfriend’s property, she can benefit from the 5% VAT rule to purchase the property.
Finance – How much does it cost to buy property in Romania?
Here is a brief list of what you can expect through the purchase cost. Please keep in mind that these costs have changed dramatically over the years and you need to be sure what they are when you buy.
- Agent’s commission:When purchasing property in Romania, buyers and sellers pay a commission, which can range from 2 to 4% of the price per party. (We charge 1.5% to 2%). Also, know that some agents also charge a daily viewing fee which will be refunded if you buy the property from them. We do not charge this fee.
- State or local tax:This is equivalent to the UK stamp duty and is about 2 – 4% of the value of the property. It is determined by the local municipality and may vary depending on the location of the property.
- Notary fees: A notary witnesses to a purchase fee between 0.5 %% 1% of the selling price. The prices are set by the management and depend on the purchase price of a property.
- Translator’s fees: As a non-Romanian, you are legally required to have all Romanian documents translated into your native language by a registered translator. It will cost around £ 50.
- Surveyor’s fee: This is optional and will vary but usually does not exceed € 250 for most purposes.
- Value Added Tax: The sale of property for residential prospects is free from value-added tax.
Additional information: Some “brave individuals” thought they could build/buy multiple properties in a given year, renovate them and then sell them all at a profit the following year. According to the interpretation of the Fiscal Code, many fiscal watchers are now waiting for vendors who have continued to do business with it.
Usually, if a person has a primary residence property and has a vacation home, and sells the latter, he does not have problems with the tax office, even if the selling price of the holiday home is more than 35.000 euros. But if the same person has 4-5 vacation homes, and sells all of them in one financial year (transaction value is more than 35.000 euros), VAT will have to be paid by the seller on each purchase.
Therefore, instead of letting the seller tell the buyer that “you have to pay VAT on me”, the buyer should be protected in all cases because one can never know if the seller gets out of it. In this example, a seller is a person, as noted.
Legitimacy – How are estate agents regulated in Romania?
Estate agents, who are not required to be licensed, are subject to government regulations, as set out in Government Ordinance 178/2008, which was inserted into Government Ordinance 21/1991 (“Consumer Protection Act”).
Estate agents are not regulated by any auditing body in Romania.
However, what you should check is their qualifications and how long they have worked in the market. If you decide to go with an agency in Romania, always ask the basic question: How long have they been in business? Can they provide you satisfied customers to chat with? And check their online reputation such as Google Maps, Facebook, and beyond.