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Feb 06, 2017

Buying costs are moderate in Romania


How high are realtors’ and lawyers’ fees in Romania? What about other property purchase costs?

Transaction Costs

Who Pays?
Stamp duty 0.50% - 3% buyer
Notary fee 0.44% - 2.20% buyer
Registration fee 0.50% - 2% buyer
Real Estate Agent´s Fee 3%
3%
buyer
seller
Costs paid by buyer 4.44% - 10.20%
Costs paid by seller 4% - 6%
ROUNDTRIP TRANSACTION COSTS 8.44% - 16.20%
See Footnotes
Source: Global Property Guide

How difficult is the property purchase process in Romania?

Land cannot be bought by foreign nationals, but only by Romanian individuals, and by legal entities, which however includes companies with foreign participation. However with Romania’s accession to the EU in 2007, foreigners will be allowed to purchase land (in 2007). As of now, foreign ownership is only possible (outside of legal entities) through legal inheritance. On the other hand, there are no legal restrictions on foreign ownership of buildings.

  1. Before selling, the seller must present a “certificat fiscal” (fiscal certificate) to attest that the property has been registered with the fiscal authorities (“Circa Financiara”), and that all taxes due are paid. The seller is also expected to present a certificate (“certificat de sarcini”) attesting that the property is free from mortgages and other legal encumbrances and that the property does in fact belong to the present owner.
  2. The notary then draws up a deed of sale (“drept de proprietate”).
  3. The notarization of sale and transfer agreement regarding ownership of land is compulsory to make the transaction valid.
  4. The transfer should be then recorded in the Land Register/ Real Estate Register.

Registration of property in Romania requires eight procedures and takes 12 to 25 days to complete.



Footnotes to Transaction Costs Table


The round trip transaction costs include all costs of buying and then re-selling a property – lawyers’ fees, notaries’ fees, registration fees, taxes, agents’ fees, etc.

Stamp Duty
Property transfer is subject to stamp duty based on the following schedule:

Stamp Duty

PROPERTY VALUE, RON (€) RATE
Up to 15,000 (€3,333) 2.2%, minimum of RON150 (€33)
15,000 – 30,000 (€6,666) 1.6% on band over €3,333
30,000 – 60,000 (€13,333) 1.3% on band over €6,666
60,000 – 300,000 (€66,667) 0.9% on band over €13,333
300,000 – 600,000 (€133,333) 0.65% on band over €66,667
Over 600,000 (€133,333) 0.44% on all value over €133,333


Notary fee:
Notary fees are paid by the buyer subject to the minimal fees established by the National Union of the Notaries. In practice, notary fees range from 0.44% to 2.20% of the transaction value.


Registration fees:
Registration fees are around 0.50% to 2% of the property value.

Real estate agent´s fee:
Real estate agent´s fee is around 6% of purchase price, split between buyer and seller.

Transfer Tax
Individuals who sell Romanian property are liable to pay transfer tax, levied on the sales proceeds. The applicable tax rate depends on how long the property was held by the owner and the property value.

Transfer Tax for Property Owned for Less Than 3 Years

PROPERTY VALUE, RON (€) RATE
Up to 200,000 (€44,444) 3%
Over 200,000 (€44,444) 2%

Transfer Tax for Property Owned for at least 3 Years

PROPERTY VALUE, RON (€) RATE
Up to 200,000 (€44,444) 2%
Over 200,000 (€44,444) 1%

VAT:
The 24% Value Added Tax (VAT) is charged on full price if the seller is a VAT payer (i.e. a company). However, transfer from a VAT payer to another VAT payer, and transfer of a business by way of a share sale are also not subject to VAT.

 





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