What do you need to know about the 5% VAT?
The 5% VAT is a hot topic in discussions regarding property purchases.
An instrument used to encourage the real estate sector a few years ago, this quota had a
positive effect on the economy, on revenues to the state budget, and on living conditions.
According to Eurostat, Romania is still at the top of the ranking regarding housing overcrowding (family members in different generations living in the same house) and in last place in the EU in terms of housing size.
The price ceiling of the dwellings that can benefit from 5% VAT, as well as the number of
purchases that can be made have been changing in recent years. Currently, there are even two such ceilings and the possibility to purchase one or several houses or apartments. In the summer, the authorities decided to make further changes, lowering the maximum price ceiling from 700,000 lei to 600,000 lei (from approx. EUR 140,000 to approx. EUR 120,000), also reducing the number of properties that can be purchased with 5% VAT to just one. Thus, from January 1, 2023, buyers can benefit from 5% VAT when purchasing only one dwelling, with a price of no more than 600,000 lei (approx. EUR 120,000), exclusive of VAT.
You can STILL purchase a house with a maximum value of 700,000 lei, paying the reduced rate of 5% VAT! To benefit from this facility, it is important to sign a sale purchase promise by the end of the year.
In PARCULUI20 there are only a few apartments still available within the maximum price ceiling of 700,000 lei. The savings you can make by paying 5% and not 19% VAT is over 20,000 euros, as much as the budget for the interior design of an apartment.
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