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Purchase Process in Romania

Below is the standard purchase process in Romania and issues that may affect that purchase:

• Foreign investors are able to acquire land in Romania under the same conditions as Romanians, providing they are resident in Romania. However, law (312/2005) states that EU nationals who are not resident in Romania may purchase land after the expiration of a 5 year period following Romania's accession to the EU.
  Investors can purchase property - buildings - irrespective of nationality or residence status in Romania.
  
• Before the purchase process begins, the vendor will provide a fiscal certificate (‘certificat fiscal') confirming the property is properly registered with the fiscal authorities and that all due taxes are paid. The vendor will also provide a certificate (‘certificat de sarcini') to confirm that the property belongs to the vendor and that it has no mortgages or other legal encumbrances attached to it.
• The buyer may need to sign a preliminary contract as an agreement to purchase the property and then pay a holding deposit through their lawyer.
• The final contract will be signed by the vendor and purchaser in front of a public notary, who will legalise the transaction and submit the necessary documents for title transfer to the land registry.

Costs of a standard property purchase in Romania include the following:

• Capital gains tax - for individuals is between 2% and 3%. For companies is 16%.
• VAT is 19% - following the EU VAT Directive.
• Stamp duty is between 0.5% and 3%.
• Notary fees are between 0.5% and 2%.
• Registration fees are between 0.1% and 1%.
• Rental income earned by non-residents is taxed at 16%, with roughly 25% of the gross rental income from immovable property deductible. When the landlord is a foreigner, the tenant pays the tax directly to the state.
• Property/Building tax for legal entities is payable at between 0.5% and 1% of the property value; the taxable value is calculated on the size and type of the property.

The Obelisk Advantage:

As Obelisk approaches its projects purely from an investment perspective, its priority is to deliver each real estate product with an emphasis on simplicity and transparency throughout the purchase process. Therefore, Obelisk has already identified the purchase procedure for its clients as a simple, four step process:

1. The client chooses and reserves the unit that best suits their investment requirements, and Obelisk takes the client through a compliance procedure.
2. An independent lawyer, sourced and appointed for the client by Obelisk, will have already carried out full due diligence on the real estate product. They will issue all purchase contracts and paperwork to the client.
3. On receipt of this contract, the client will sign and make the first payment. The lawyer will notify the client of all further payments when required.
4. The appointed lawyer will also represent the client in all aspects legally required within the country of purchase, ensuring that clients of Obelisk enjoy the benefits of simple and hassle-free real estate investment.

Read more about the property purchase process for Romanian real estate.