Romania Extending inland halfway across the Balkan Peninsula and covering a large elliptical area of 237,499 square kilometres (91,699 sq. mi.), Romania occupies the greater part of the lower basin of the Danube River system and the hilly eastern regions of the middle Danube basin. It lies on either side of the mountain systems collectively known as the Carpathians, which form the natural barrier between the two Danube basins.

Romania's location gives it a continental climate, particularly in Moldavia and Wallachia (geographic areas east of the Carpathians and south of the Transylvanian Alps, respectively) and to a lesser extent in centrally located Transylvania, where the climate is more moderate. A long and at times severe winter (December-March), a hot summer (April-July), and a prolonged autumn (August-November) are the principal seasons, with a rapid transition from spring to summer. In Bucharest, the daily minimum temperature in January averages -7oC (20oF), and the daily maximum temperature in July averages 29oC (85oF).

Romania lies on the Black Sea coast of south-eastern Europe. The Carpathian Mountains and the Transylvanian Alps divide the country into three physical and historical regions: Wallachia in the south, Moldavia in the northeast, and Transylvania in the country's centre. The majority of the people are Romanian (89 percent), but the Hungarian minority, living in the Transylvanian basin, numbers some 1.7 million.

Romania and the EU includes links to Romanian government sites and Tourist Information.

Property Information: The property buying process in Romania is largely unknown to foreign buyers, yet it can be relatively simple and efficient with the appropriate knowledge and preparation. Three people can make the buying process simple, secure and successful for you: a professional estate agent/property consultant, a reputable solicitor/lawyer (ideally English speaking) and the notary.

European Accession for Romania took place in 2007.Based on previous examples; property is tipped to rise by up to 50%. Laws have previously caused difficulties for foreigners from owning property in Romania but in line with EU policy, this will soon be changed.

Law No. 312/2005 stipulates the conditions in which European Union citizens (as well as non-EU foreign citizens), are able to purchase Romanian land. This is article 4 of the above-mentioned Law translates: “The citizen of a member state without legal residency in Romania, the stateless non-resident having residency in an European Union country and the non-resident foreign legal entity (company) incorporated per the stipulations of the EU legislations, are able to gain ownership on land for secondary residences, respectively secondary headquarters, in a term of 5 years after Romania has joined the European Union”.

The Law differentiates depending on the type of land. For example the persons or legal entities mentioned above can only gain ownership of Romanian forests, agricultural land after 7 years from the date Romania has joined the EU. (This last stipulation is not applied to foreign farmers who are able to prove their statute as farmers in their home countries).

Buying an apartment in Romania automatically implies buying the adjacent part (a percentage) of the land on which the building stands upon. As a result even if theoretically foreign European Union citizens would be able to acquire apartments directly, practically it is not yet possible without a Romanian company or without having at least legal residency in the country (this is a more recent interpretation of the Law).

Buying Process: For all property purchases it is necessary to form a limited company that can own land and register yourself as a company director.

Choose and reserve the property of your choice.

Employ a lawyer; the lawyer will then go though the process of setting up a company in the client's name (requiring all the information on the reservation form) as well as three options for the name of the company. Once you have made the decision of which property you wish to purchase, a local solicitor will write the pre-contract in English and Romanian between the seller and yourself. The pre-contract will mention the price of the property as well as the deposit payment.

The company set up takes about seven to ten days. Once the company name is reserved, the lawyer is able to set up a bank account in the company's name. This bank account is essential as all payments to the developer and any other costs will need to come out of this account to be considered a cost (and therefore tax deductible for the company) this account cannot be activated until the company is incorporated. A client is not able to pay from a personal account if they are purchasing as a company. If a payment is made from a personal rather than company account they will be liable for VAT.

Once the company setup is complete, the client will need to employ an accountant to manage the company's finances, submit tax returns etc. The accountant will require all the company information: shareholders, company name, fiscal number and a copy of the incorporation document. It is important that the accountant has contact with the client's lawyer to ensure that any further required information can be easily passed on.

Once the accountant and the company have been established and the client is happy with the contract, the next stage is to sign the contract. This needs to be done in one of two ways: the client flying to Romania to sign the contract personally, or a power of attorney can be granted to a contact in Romania, be it a friend, family member or the appointed lawyer. This is a specific power to sign the purchase contract in place of the client; it affords no further control. To create such a document, the client will need to ask the lawyer to draw up the paper and inform the lawyer to whom they would like to grant this power.

The final step in the process is to sign the contract (with a notary present sourced by the lawyer of the seller) at the office of the seller or the notary office. Once this is complete, payment of the first instalment is due and paid from the company account as detailed above.

1,000 euros deposit will be required to be paid when you sign the pre-contract. 25% of the property price (minus 1,000 euros) will be required to be paid cash when you sign the final contract.
75% will be transferred by the bank to the seller once the final selling contract is signed.

Costs/Fees: Budget around 5 to 8% of the purchase price for additional costs and fees, including the notary (1.5 to 2%) and a transfer tax (0.5 to 3%). In Romania, as a buyer, you may be expected to contribute towards the estate agent’s fees of 6 per cent, which are often split 50/50.


Loans/Mortgages: You will need to raise the cash or re-mortgage a property or properties in your own country as mortgages are currently not available yet to foreigners.


Taxation: Non-residents are taxed on their income from Romanian-sources. Married couples can file tax returns jointly or separately. No allowances are available for non-resident taxpayers.

Income Tax. Income from all sources are aggregated and taxed at a flat rate of 16%.

Rental income earned by non-residents is taxed at a flat rate of 16%. A fixed deduction of 25% of the gross income is allowed to account for income-generating expenses. Taxpayers may also opt for itemized deductions of all expenses.

A landlord in Romania has the legal obligation to pay the taxes levied on income from property, except in the case of a foreign landlord, when the tax is withheld and paid to the state by the person paying the revenue, meaning the tenant.

As of 01 January 2008, taxpayers who earn rental income from more than five simultaneous rental contracts can only be taxed under the direct method (gross income less itemized deductible expenses).

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 how much the actual sales proceeds are.

Under 3 years ownership; Up to 200,000 (€56,965) 3%. - Over 200,000 (€56,965) 2%.

Over 3 years ownership; Up to 200,000 (€56,965) at 2%. - Over 200,000 (€56,965) 1%

A local property tax is levied on buildings, payable by the owner. The applicable tax rate varies between 0.25% and 1%, depending on the building’s location and property value. If the building has not been revalued during the last three years, the applicable tax rate varies from 5% to 10%.

A local and tax is levied on land in Romania, payable by the owner. The tax rate for urban land ranges from RON0.001 and RON0.59 per square meter for land in urban areas. Land outside urban areas is taxed at a fixed rate of RON1 (€3.51) per hectare.

Income and capital gains earned by corporations are taxed at a flat rate of 16%. Expenses incurred that are directly related to obtaining income can be deducted from the gross income.

Rental Market: No rent control exists in the private sector. Rental amounts can be freely negotiated between landlord and tenant. The rent can be indexed to inflation; such clauses are common. Progressive annual increases in rent can be lawfully stipulated in the contract.

Failing this sort of clause, the rent can only be increased if the contract’s duration is greater than one year. In the case of contracts above a year, the landlord may go to the courts to ask for an increase, citing a practical reason, such as (e.g.) a large unforeseen depreciation in the national currency.

Deposits; Parties may agree on the amount of a deposit, which must be held at the landlord’s bank, as agreed in the contract. At the end of the contract, the landlord may deduct expenses for repairs or works incumbent on the tenant, and for unpaid services.

The agreement automatically terminates at the end of the contract, without the need for further notice. In case of a contract unlimited in time, the Civil Code gives both parties the right to cancellation, under the condition of the observance of time limits imposed by local customs.

The contract can be terminated before the agreed term by the tenant with a notice of a minimum of 60 days, or by the landlord if:

  • The tenant did not pay the rent for three consecutive months
  • The tenant did not comply with the contractual provisions

Tenants may only sublet with previous written permission from the landlord, and under the conditions set by the landlord. Sub-letting can be expressly forbidden in the contract.

The average number of Days to Evict Tenant is 273.

Financial Crisis 2008/09: After rising by as much as 50% in 2007, house prices in some districts of Bucharest fell in the first quarter of 2008. Although estimates of the price crash range from 10% to 25%, the general consensus is that the 5 year house price boom is over.

While property prices have been constantly raising, since 2002, prices of old apartments in Bucharest jumped by about 160% from 2005 to 2007. In some parts of Bucharest, the increases were much higher.

Demand for Romanian properties rose in anticipation of EU accession in January 2007. A year after, investors were disappointed with the rate promised reforms are taking place. Corruption is rife and largely ignored or tolerated by the government.

Foreign buying had been enormously important in pushing up house prices, as Romanian property was a significant bargain in European terms. Romania was advertised alongside Bulgaria as the land of opportunity for British and other foreign buyers.

Investors who took euro denominated loans to join the housing boom are now affected by higher interest rates and the depreciating Romanian new lieu (RON). The ECB raised rates key rates four times from 3% in Sep 2006 to 4% in June 2007, where it remained until now. After appreciating strongly from RON34.2 per euro in 2004 to RON 3.2 in mid-2007, the currency depreciated to about RON3.70 in the first quarter of 2008.

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Disclaimer: This guide is for information only and should not be relied upon as definitive. Details have been obtained from various sources and although we have done everything possible to ensure that it is correct, we cannot accept responsibility for it or guarantee its accuracy. This is because processes and laws change frequently, and may also vary dependant upon personal circumstances. You are welcome to use the information provided, but should always obtain confirmation of specific details and get independent specialist and legal advice in the country that the information refers to.