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How to Invest in Romanian Real Estate if you are an EU Citizen and/or a Legal Entity

posted 3 years ago

When Romania joined the EU (01.01.2007) specific restrictions were established by Law no. 312/2005 (the “Law”) for persons from the EU area as regards the acquisition of land. Such restrictions applied for a period of 5-7 years (depending on the category of land). However, even after expiration of such timeframes, there are still certain restrictions in place, which reduce the attractiveness of such investments. On the other hand, no restrictions apply for the acquisition of buildings by such persons.

Restrictions connected with the residency of the acquirer

Based on the wording of art. 4 of the Law, non-Romanian residents (individuals or companies) have the right to purchase building land (Rom. teren curti constructii) for the sole purpose of establishing a secondary residence or a secondary office in Romania. Hence, such administrative step needs to be taken after the acquisition of land.

No such restriction is applicable for the purchase of forests, farmland and forest land (Ro. terenuri agricole, paduri si terenuri forestiere), for which a longer timeframe (7 years following Romania’s accession to the European Union) applied.

However, special rules apply for farmland located outside the built-up area: co-owners, neighbors, leaseholders, respectively other categories of persons, provided by special law, have a preemption right within a short period of time.

Restrictions connected with tax issues

EU citizens must get registered with the Romanian Fiscal Authority and receive a tax number (Rom. NIF) in order to purchase land. The registration is performed by filing a formal application (personally or by proxy/ tax representative) and declaring the reasons of registration. Some fiscal authorities ask for specific supportive documents like an appointment with the public notary for the authentication of the real estate purchase agreement; other ask for affidavits, intention declarations of the parties or similar documents. It is recommendable to clarify such aspects in advance.

Summary and conclusion

EU individuals and legal entities may basically acquire land in Romania after the EU accession. No restrictions apply for the acquisition of buildings; specific rules are to be observed, however, depending on the land destination and residency of the buyer. We always recommend to perform a thorough verification of the legal and practical aspects since it is never sufficient to rely on the authenticating notary public.

Please find more detailed information under: https://stalfort.ro/wp-content/uploads/2021/12/20211129_AH_Real_estate_investments_in_Romania_by_EU_citizens_and_legal_persons.pdf

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