Ţuca Zbârcea & Asociaţii
Can anyone (including foreigners) own and occupy real estate in your jurisdiction (including shares in property owning companies)? Are there any restrictions?
As a general rule, any legal or natural entity may be the holder of private property rights. Foreign natural persons and legal entities of the European Union/European Economic Area (EEA) can purchase land in Romania under the same conditions as natural persons and legal entities from Romania. In what concerns the acquisition of agricultural lands, forests and forest lands, the pre-emption right regulated by the special legal provisions has to be observed. Any foreign investors may acquire lands in Romania by setting-up a special purpose vehicle with its headquarters in Romania.
Are there restrictions on lending for the purchase of real estate by foreign companies? If so briefly give an outline?
No, there are no restriction on lending for the purchase of real estate for foreign companies. Nevertheless, any interested natural or legal person intending to obtain a facility from a bank has to observe the conditions imposed by them.
Buying
Please provide a short summary of the fees and costs (including tax) relating to buying real estate in your jurisdiction.
There are no specific taxes applicable to the buyer of real estate in Romania, at the moment of acquisition. From a compliance perspective, when buying real estate in Romania, the owner has the obligation to declare such real estate by submitting a statement to the local tax authority in whose territorial jurisdiction the real estate is located, within 30 days from the date of acquisition. Following this statement, the owner will due Building Tax/Land Tax starting with 1st of January of the following year. Separately, Value Added Tax (VAT) may be payable for such real estate, under certain circumstances (e.g. if the respective building is considered new or the plot of land is buildable).
Owning
Are there taxes applicable to owning real estate and can the burden of the taxes be passed to someone else (e.g. a tenant or an occupier - not being the owner)?
Persons (individuals or companies) owning real estate located in Romania owe annual Building Tax and Land Tax. The calculation method of the applicable Building Tax depends on the building’s destination: residential, non-residential or with mixed destination. While for residential buildings owned or held by companies, the Building Tax is computed by applying a rate between 0.08% and 0.2% on the taxable amount of the building, for non-residential buildings the Building Tax shall be calculated by applying a higher rate (i.e. between 0.2% and 1.3% inclusive) on the taxable amount of the building.
Land owners are subject to Land Tax at a fixed amount per square meter, depending on where the land is located and the area and category of use, in accordance with the classification made by the local council.
With certain exceptions applicable to real estate owned by the Romanian State, the obligation to pay the real estate taxes cannot be passed to other parties.
Tax Breaks
Are there tax breaks or other incentives for foreigners to buy real estate in your jurisdiction? If so what are they?
No, there are no tax incentives applicable to foreigners buying real estate in Romania.
How is the ownership of Real Estate evidenced in your jurisdiction?
A real estate title is evidenced and is made opposable to third parties by registration in the relevant Land Book (Romanian: Carte Funciară). A right over real estate recorded in the Land Book is presumed to exist, if acquired or created in good faith and lacking any proof to the contrary, (registrations in the Land Book do not constitute absolute evidence).
Is it possible to keep the identity of owners of real estate confidential in your jurisdiction?
The Cadastre Law sets forth the manner in which legal operations regarding real estate properties are to be published. The records are kept by the National Agency for Cadastre and Real Estate Publicity, through its territorial units. The general cadastre record system is designed to provide a public record of all transactions and relevant legal issues related to real estate located in the same territorial unit (so the identity of owners of real estate is not confidential).