VAT on Real Estate in Romania: 2025 Guide

Whether you pay VAT on a Romanian property deal comes down to two things: what you sell and who you are. New buildings and buildable land are taxable. Old buildings together with their land, and any non-buildable land, are exempt under art. 292 para. (2) lit. f) of the Fiscal Code. Below is the full VAT regime for property operations in Romania, built around the rates in force from 1 August 2025 (standard 21%, reduced 11%, and a transitional 9% for housing), so you can answer the real question before you sign: is VAT due on this land or this apartment?

When VAT applies to a property sale

The rule fits in two lines. VAT applies when a taxable person sells a taxable property. Both filters have to be met. If the seller does not act as a taxable person, no VAT. If the property is exempt, no VAT even when the seller is registered. Old buildings with their land, and non-buildable land, are exempt under art. 292 para. (2) lit. f) of the Fiscal Code. Sort out both filters before you talk about rates.

What is exempt and what is taxable

Exempt from VAT (art. 292 of the Fiscal Code):

• -the supply of buildings or parts of buildings that are not new, together with the land on which they stand;
• -any non-buildable land;
• -agricultural tenancy (arendare), concession, rental and leasing of immovable property;
• -real rights such as usufruct and superficies.

Taxable:

• -the supply of new buildings, new parts of buildings, and buildable land;
• -accommodation in the hotel sector, including camping;
• -rental of car parking spaces;
• -rental of machinery or equipment permanently fixed to immovable property;
• -rental of safes.

What counts as a new building and as buildable land

Land is buildable if construction may legally be carried out on it, whether developed or not. You do not judge by how the land looks, but by what the urban planning certificate (certificat de urbanism) says. If the certificate allows building, the land is buildable and its sale is taxable, under art. 292 para. (2) lit. f) of the Fiscal Code.

A building is any structure fixed in or on the ground. Not just houses and blocks, but roads, bridges, pipelines, industrial installations and wind turbines.

A building is new if you sell it no later than 31 December of the year following first occupation or use. If you sell it before first occupation, it is new. So is a building still under construction. First occupation runs from the date the beneficiary signs the handover-acceptance report on completion; for in-house works, from the date the asset is booked as a tangible fixed asset. A transformed building becomes new again when the transformation costs, excluding VAT, at least 50% of the building's value, excluding land, after the works.

An example. An office building accepted in 2024 and sold in 2025 is new, because the sale falls within the year after first occupation, so it carries VAT. The same building sold in 2027 is no longer new, so its supply together with the land becomes exempt.

VAT rates from 1 August 2025

The standard rate is 21% and applies to new buildings and buildable land where no reduced rate or transitional rate steps in. The reduced rate of 11% is narrow. It covers only the supply of buildings, land included, intended for retirement and care homes for the elderly, and for children's homes and recovery-rehabilitation centres for disabled minors. It does not apply to ordinary housing.

For housing that previously qualified for 9%, a transitional rate survives under art. III of Law 141/2025. A buyer can take one dwelling at 9%, between 1 August 2025 and 31 July 2026, where all of these hold at once: usable area no more than 120 sqm, excluding annexes; value, land included, no more than 600,000 lei excluding VAT; the dwelling habitable as such at supply, by 31 July 2026 at the latest; the buyer has not taken another reduced-rate dwelling since 1 January 2023, checked against the purchase register; and the buyer signed a legal act with an advance payment before 1 August 2025. For acts signed between 3 and 31 July 2025, a 20% advance must have been paid in full by 31 July 2025. Until 1 August 2026, the 9% rate also covers supplies of buildings to municipalities for subsidised rent, where advance-payment acts were signed before 1 August 2025.

Individuals: when you become a VAT payer

An individual becomes a taxable person when selling as an activity, repeatedly and for gain, not as a one-off. Selling your own home, a holiday house, inherited property or property recovered under restitution, all used for personal purposes, does not count. Renting out immovable property does make you a taxable person, but the rental is exempt under art. 292 para. (2) lit. e).

Buying land or buildings to resell takes on a continuous character when there is more than one transaction in a calendar year. Building in order to sell is economic activity from the moment you start, that is, once you begin to incur costs for it.

Watch one trap: being a taxable person does not automatically mean you must register. An example. Someone sells two extra-urban agricultural plots, non-buildable, bought in 2022 to resell. They become a taxable person, but the supply is exempt under art. 292 para. (2) lit. f), so there is no registration obligation, whatever the plots are worth. The opposite case: selling a buildable plot, which is taxable, above the exemption threshold, the individual must request VAT registration before the sale, under art. 310. For spouses under joint ownership, one spouse handles all VAT obligations; under separation of property, each spouse is analysed separately.

The option to tax and reverse charge (art. 331)

An exempt operation can be moved to taxation by option, through a notification filed with the tax office. If you later waive the option, you file a new notification, but then you must adjust the tax you deducted, under art. 305.

When a supply of land or buildings is taxable, by law or by option, reverse charge under art. 331 applies, on one condition: both seller and buyer must be registered for VAT under art. 316. In that case VAT does not actually move between them. The buyer records it in the return at the same time, both as output and as input tax.

VAT becomes chargeable on a supply when the buyer can dispose of the property as owner. Instalment sales with title passing on the final payment are an exception, where the handover date counts, as are leasing contracts, which have their own rules. For rental, leasing and agricultural tenancy, VAT is chargeable on each contractual payment date, and the settlement period cannot exceed one year.

Special situations

Where a building and its land form a single land body, with one cadastral number, the VAT regime follows the item with the higher value, set by a valuation report; at equal values, the larger area decides, that is, the built-up developed area. Where the seller takes on demolition that begins before the sale, the whole deal is one operation whose object is land (CJEU C-461/08 Don Bosco).

• -an enforcement sale is a supply of goods if the debtor is a taxable person; the debtor may opt to tax;
• -expropriation against compensation is a supply of goods;
• -giving property in payment to a public institution to settle a tax debt is not a supply of goods;
• -a transfer of assets (division, merger, sale, contribution) to a taxable person established in Romania is not a supply of goods, under certain conditions.

VAT adjustment, deduction and invoicing

Immovable property is a capital good with a 20-year adjustment period, one twentieth per year, under art. 305. The deducted tax is adjusted if, for instance, you move the asset to personal use, use it for operations without a right to deduct, sell or rent it under exemption, or the asset ceases to exist. The 50% cap on deduction for residential buildings (OUG 115/2023, art. 298 para. (4^1)) does not apply yet: it takes effect only after Romania obtains a derogation from Directive 2006/112/EC. Until then, the cap has no effect.

On invoicing: exempt operations without a right to deduct (art. 292) carry no obligation to issue an invoice (art. 319 para. (7)). For taxable operations, the invoice is due by the 15th of the month following the chargeable event; for advances, by the 15th of the month following receipt. The taxable base is everything you receive for the operation and includes related taxes, for example building tax re-invoiced in a rental taxed by option, but excludes VAT. Ancillary costs follow the regime of the main transaction, but utilities on individual meters that the tenant chooses freely may be treated separately (CJEU C-42/14).