Romania to lift cap for 5% preferential VAT rate on residential properties
Romanian minister of finance Adrian Câciu announced that the Government would broaden the scope of the preferential 5% VAT rate from residential properties with a price of under RON 450,000 (EUR 90,0000) to include properties worth up to EUR 140,000, Ziarul Financiar reported.
The measure is expected to unblock a part of the residential market in the capital city and first-tier cities.
"There will be a 5% VAT for homes up to EUR 140,000, and the quota will be applicable for a single home [per resident]," said Adrian Câciu, finance minister on the ticket of the Social Democratic Party (PSD).
The former Government deferred increasing the cap by one year to the end of 2021.
Real estate developers argue that this resulted in buyers affording smaller properties.
"The usable area per housing unit in 2020 is close to an all-time low, about half that of 2001, for example, the share of 4- or 5-room units is at its lowest level since 2000. To date, there are 5% newly built apartments with four rooms while only 1% of them have five rooms. These categories of apartments or houses held a share of around 20% in the year 2001," said Georgian Marcu, the broker who owns the agency Green Angels. Read More…
