VAT in Romania

The Value Added Tax for Real Estate purchases in Romania had, until 2008, been a flat 19% applied to all transactions regardless of any other details. However the respective stipulations of the Romanian Fiscal Code have been changed through OUG 200/2008, which applied from December 4th 2008. 
This Government Order stipulates that a 5% VAT is to be applied for homes and the plots of land on which these stand, as a social measure. The following are considered homes delivered as a social measure:
1. Delivery of buildings, including the plot of land on which these stand upon, destined to be used as Elder Homes;

2. Delivery of buildings, including the plot of land on which these stand upon, destined to be used as Children Homes and Rehabilitation Centers for handicapped minors;

3. Delivery of buildings with a maximum surface of 120 square meters, including annexes, of a total value of 380,000 Lei (this includes the value of the adjacent land), purchased by any unmarried person or family. The new VAT is applied only to homes which can be immediately lived in built on a piece of land of no more than 250 square meters per home. Any unmarried person or family can only purchase a single home with the new VAT, in the following manner:
a) in the case of unmarried persons, not to have detained or currently detain any other home purchased with the 5% VAT;
b) in the case of families, the husband and wife not to have or currently detain, together of separately, any property purchased with the 5% VAT;
c) delivery of buildings, including adjacent land, to City Halls with the scope of renting these buildings to persons or families with special financial situations.
There is also one important conclusion to be taken after analyzing the new Government Order, and that is that Romanian companies cannot purchase real estate benefiting from the reduced VAT. This is firstly because this is described a “social measure” and secondly the subjects of this Order are limited to “unmarried persons or families”.
Note: these 2008 rules no longer apply. Since 1 August 2025 the standard VAT rate in Romania is 21% and the reduced rate 11% (Law 141/2025); the reduced rate for homes sold as a social measure was abolished, with a transitional 9% rate that ended on 30 September 2026 (Law 161/2026), so sales of homes are now generally subject to 21% VAT (11% still applies to elderly homes and children's homes). Please contact us if you need more information on the VAT in Romania.