Navigating the taxes related to purchasing a home is often a maze. One of the most important aspects is the Value Added Tax (VAT), which can vary significantly depending on the type of property, its age, and the buyer’s status.
💡 In Romania, VAT on apartments varies between 0%, 5%, 9%, and 19%, depending on the age of the property, surface area, value, and type of buyer.
🏙️ To benefit from 9% VAT, the dwelling must be new, with a usable area of no more than 120 sqm and a value below 600,000 lei (excluding VAT).
📄 The standard rate of 19% applies to dwellings that exceed the limits of surface or value, those purchased by legal entities, or in the case of a second purchase previously benefiting from reduced VAT.
🔎 VAT in real estate – what you need to know about applicable rates
VAT exemption – old apartments
Applies to old apartments, being subject only to the transaction tax
5% VAT – social housing
For social housing and those intended for vulnerable categories
9% VAT – new dwellings meeting certain criteria
For new dwellings that meet specific surface and value criteria
19% VAT – standard rate
The standard rate for the rest of the properties and legal entities
🧮 What influences the VAT rate?
The VAT rate is influenced by factors such as the age of the property, usable surface, property value, the buyer’s legal status, and any previous purchases with fiscal facilities.
This variety makes each transaction unique from a fiscal perspective, requiring careful analysis.
🏙️ VAT for dwellings – differences between new and old apartments
The differentiation is based on the fiscal status of the property at the time of the transaction, not only on the construction’s age. Thus, an apartment may be considered “new” fiscally even if it was built several years ago, if it has not been lived in or sold previously.
🟡 Old apartments: 0% VAT
VAT exemption – no VAT is paid on sale.
Transaction tax – the only fiscal cost, borne by the buyer.
Applies to dwellings already used and no longer considered “new deliveries” under the law.
The transaction tax is usually a percentage of the sale value and is paid by the buyer.
🟢 New apartments: variable VAT
5% VAT – for social housing and certain vulnerable categories.
9% VAT – for new dwellings that simultaneously meet:
Usable surface of at most 120 sqm – such as studio apartments, 2-room apartments, and some 3-room apartments.
Value up to 600,000 lei (excluding VAT)
Buyer is a natural person
New from a fiscal point of view
19% VAT – for the rest of the properties, such as most 4-room apartments, or purchases by legal entities.
The choice of VAT type depends on the property’s characteristics and the buyer’s status.
VAT 9% in real estate – conditions for the reduced rate
📏 Maximum usable surface
An essential criterion is the usable surface of the dwelling, which must not exceed 120 square meters, excluding household annexes. Thus, the facility is aimed at reasonably sized dwellings, such as many Evolution apartments.
💸 Maximum dwelling value
The total value of the property, including land, is another important criterion, with a maximum limit of 600,000 lei, excluding VAT. This limit ensures that the facility focuses on the medium segment of the real estate market. If the property’s value exceeds this amount, the standard 19% rate will apply.
👤 Only eligible natural persons
Only natural persons can benefit from this reduced rate, either individually or in co-ownership. Legal entities are subject to the standard 19% rate. Therefore, if you purchase the dwelling through a company, you will not be able to benefit from the reduced VAT.
1️⃣ Only once in a lifetime
A person can benefit from this facility only once in their lifetime. If you have already purchased a dwelling with reduced VAT (9% or 5%), any subsequent purchase will be subject to the standard 19% rate, regardless of the fulfilled criteria. This rule is important to avoid misinterpretations and ensure compliance with tax legislation.
🏡 Completed and ready-to-live dwelling
The dwelling must be ready to live in at the time of delivery, with individual access, functional utilities, complete finishes, and operational installations. Thus, the facility applies only to completed dwellings.
This means that you cannot benefit from reduced VAT for purchasing a dwelling in the project or construction stage, even if it meets the other criteria.
ℹ️ Recommendation
Keep this list handy when analyzing a real estate offer and request all clarifications from the negotiation stage to legally benefit from the reduced 9% VAT rate!
🔎 19% VAT in real estate – when the standard rate applies
📌 Main situations for 19% VAT
Legal entities: the 19% rate is almost universal, regardless of the property type or value
Surface exceeds 120 sqm: for individuals with larger dwellings
Value exceeds 600,000 lei: for higher-value properties
Second purchase: for persons who previously benefited from reduced VAT
🤝🏻 Who pays VAT on the sale of a property – the parties’ obligations
Fiscal responsibilities in real estate transactions are shared between seller and buyer, each having specific obligations for legal compliance.
Seller: collects and pays VAT to the state, issues an invoice with VAT, declares and pays the collected VAT. Real estate developers, construction companies, and authorized natural persons who sell new dwellings must collect VAT from buyers.
Buyer: bears the cost of VAT included in the final price, demonstrates eligibility for reduced rates
Old apartments: VAT does not apply, only the transaction tax paid by the buyer. In this case, the buyer must pay the transaction tax at the notary, who is then obliged to transfer it to the state budget.
🖋️ VAT exemption for property sale – exception cases
Old constructions: VAT exemption without deduction right for already used properties. It is important to note that this exemption does not apply to the land on which the building is constructed, which may be subject to VAT in certain cases.
The “New Home” program: facilitates access to reduced rates for eligible persons
Social housing: reduced 5% rate for specific programs and vulnerable categories
Although it does not offer complete VAT exemption, the “New Home” program can facilitate access to reduced rates for eligible persons. Beneficiaries can access financing and, if conditions are met, benefit from reduced 9% VAT.
The “First Home” program was replaced by the “New Home” program, which largely keeps the same eligibility conditions and tax facilities.
Understanding VAT on apartments is important for any participant in Romania’s real estate market. The differentiated rates, eligibility conditions, and fiscal obligations can significantly influence the costs and profitability of an investment.
