The roller of the austerity measures had just entered into force have distracted our attention from the new tax increases announced by the government, including the housing tax. In the following we present an example of calculation, without any connection with the luxury tax that concerns the homes of over 2.5 million lei, ie 500,000 euros.
Home tax could double from January. Photo shutterstock
From next year the local taxes in Romania will increase, on the basis of a postponed measure, but provided in the commitments made by the Romanian state through the PNR – the component of a broader fiscal reform.
The European Union requires the increase of the local budgetary revenues, including by updating the taxable value of the properties, so that the taxation better reflects the real market value, to bring higher revenues locally and to reduce, in general, the need for financing from the central budget and the related fiscal distortions.
The measure, provided to be applied from January 1, 2026, was postponed from the summer of 2022 in the context of inflation, of post-pandemic economic instability and then of the electoral years 2024-2025.
“However, we enter in a straight line with these legislative measures, with the approval of the package of fiscal measures no. 1 proposed by the Bolojan Government. The form of the new legislation is not yet final but, according to the official statements, it would be possible to define all the details regarding the technical procedures,”points out the specialists.
Minimum 01,% for residential buildings, compared to 0.08% currently
Basically, they added, we are talking about two important elements that change the paradigm of local taxes, reflected in the current drafting of the law. On the one hand, the tax intervals are changed, by eliminating the maximum ceiling, only a minimum – 0.1% for residential, 0.5% non -residential and 0.4% in the case of buildings used for agricultural activities being established. Local authorities will be able to adjust the fee flexible, without requesting supplementations from the national budget. On the other hand, the definition of the base will be changed, which will better reflect the market value of the buildings.
Currently, the tax on the residential buildings held by the natural persons is calculated by applying a share between 0.08% and 0.2% on the taxable value of the building, which can be adjusted according to the rank of the locality and the location area. For legal entities, the odds are between 0.08% and 0.2% applied to the taxable value of the building, and for non -residential buildings apply between 0.2% and 1.3% to the taxable value of the building. The rule of establishing the tax based on the evaluation report prepared by an authorized evaluator every five years is applied. It should be noted that at present the methodology imposed legislatively for these evaluations often does not reflect market values.
From January is implemented and e-owned
From January 1, the property tax will be higher, because it will be calculated according to the market value of the house and not the old one, registered at the town hall and not actualized for years.
The Government is working these days on developing the E-Property application, which will centralize the data on the real trading prices of the real estate properties.
The information will reach a system controlled by the Ministry of Finance. It will work with digital maps, GPS coordinates, cadastral data, satellite images and details about building permits. Each property will have a unique ID, associated with the CNP or CIF owner.
Example of calculation
Currently, the quota is established on the basis of old evaluation grids at the town hall, which does not always reflect the real value of the property. In the e-owned system, the evaluation will be done automatically, based on algorithms that take into account the prices with which the homes are sold on the real estate market, as well as the area where the building, the surface, the access to utilities and the legal status.
Experts say that they can reach their doubling or even triple.
For a two -room apartment purchased at the end of last year for 78,000 euros, located in Ilfov county, the owner paid a tax of 241 lei, because the City Hall set the taxable value of only 40,000 euros.
Once inserted into the platform, the tax calculated on the real value of the property, registered with the notary, would be 458 lei, with 217 lei more.
“Local housing taxes and especially houses are derisory. We have to expect growth everywhere. I say between 50 and 100%. In the main cities of the country, the part of housing, houses and real estate will feel a greater increase. It is correct that the one who has more to pay more than a person who stays in a commune.”declared fiscal expert Alex Milcev recently.
Tax increases by at least 25% of January
The specialist in real estate evaluations Adrian Vascu, a senior partner of Veridio, told “truth“At present, the market value of the building is not taken into account, but the area in which it is located.
“Now it is not taken into account that it is worth 173,000 euros or only 85,000 euros, but the area where the apartment is, in which locality and in what area. But if it is the same taxable value and only the share will be an increase of the tax of at least 25%.
But for next year we do not know exactly how it will be done. We will see in the next period. Will be fiscal code change if new system is implemented“, Adrian Vascu told” Adevărul “.
Taxes were growing anyway
Fiscality experts of EY Romania emphasize that this step, which we can consider a kind of “revolution“Of the local tax system in Romania, it was to be achieved anyway. Unfortunately, it coincided with this difficult tax situation of other taxes and taxes and thus will have a negative compound effect on all taxpayers.
Let us not forget, in this context, the so-called luxury tax-the special tax applicable to the homes valued at over 500,000 euros and to the cars over about 75,000 euros. And regarding these types of properties, the introduction of an additional tax burden is discussed.
It is possible that this increase in local taxes on real estate will also produce a “downsize” phenomenon (in English translation – to decrease the measure), more pronounced in developed countries, where the owners give up houses and large areas, sell them and move to smaller spaces, more lightly taxed. Properties taxes in these economies are very high compared to Romania.
In crisis, those with low income sell from apartments
Therefore, he adds experts, if in Romania this phenomenon has not manifested so far, and because of the mentality of “owner“Of the Romanian, which leaves the descendants the houses and the lands, but also because the taxes are still quite small, it is likely that next year we will witness the accentuation of this” step back “. Not the other, but we also have a historical precedent:
At the beginning of the 2000s, when, in a completely different economic context (of a lightning raising in real estate), many families with low or financial income were sold their well-located properties in large cities and opted for the periphery properties or even outside them, remaining with a good difference.
In the case of legal persons, there will be higher costs for the possession and use of real estate assets, and there will be an indirect impact on the rents that will be increased.
It is possible that the increase of local taxes from January 1, 2026 will not only be an economic decision, but even a step that will change the mentalities and behaviors of the Romanian owner and will redefine what a real estate investment means.
Possible 70% increase in housing tax
Moreover, following the meeting of Prime Minister Ilie Bolojan with the representatives of the Association of Municipalities, the idea of increasing the tax on housing by 70% next year.
The announcement was made by the mayor of PSD of Buzau, Constantin Toma, who said that such an increase is possible. “Will increase by 70%. This is the idea from this moment ”he said.
Increases the tax on cars and
The Ministry of Transport to the Ministry of Finance shows us that calculations are made for new car taxes. Because in the 59th milestone of the PNRR we are asked for a new basis for calculating the taxes for vehicles and buildings, they must be completed by the end of this year and will enter into force from January 1, 2026.
The government works at a fiscal reform that will introduce a new tax for old and polluting cars, starting in 2026. The owners of cars with low pollution rules will be obliged to pay much higher taxes, and those with ecological vehicles could benefit from exemptions.
According to the scenarios that are currently working in the Government, the tax for older cars would increase the most. For a 20 -year -old car, the tax would increase as many times as we pay.
Increases we will have on the entire line of vehicles, but most will increase taxes on old cars.
