Recent articles
Dawn of the Romanian EmpireRomania˘s richest man, Dinu Patriciu, is taking advantage of the turmoil among small, London-listed companies to build a pan-European investment empire....
Romanians are less and less willing to save or the incomes they have available for saving are dwindling, reveal data from the NBR, which point to the lowest annual rise for deposits in RON - of 15.5%....
Home » About Romania » Acquisition Process
Acquisition process
Outline of the acquisition process
The Romanian government has passed a series of laws that will allow for direct foreign freehold ownership of land in Romania five years after the country achieves full EU member status (seven years for agricultural land), which will bring the property laws in Romania inline with those of other European Union member states.
Once a suitable property has been found the real estate investor should secure the services of a reliable lawyer to act on their behalf throughout the proceeding property purchase transaction if they haven’t already done so. While it is not a requirement to have a lawyer represent you in any property buying transactions undertaken in Romania, an investor would be unwise to proceed without legal representation. The amount of red tape and paperwork associated with buying and selling property in Romania is considerable; finding a good lawyer who can take on this burden is therefore critical.
Sometimes it is necessary for an investor to sign a preliminary contract to agree to purchase the property they are interested in and to pay a holding deposit via their solicitor, and sometimes the vendor is happy to wait for the final contract to be signed - it really just depends on the vendor. If the property investor is buying off-plan a stage payment schedule will be drawn up as part of the final contract otherwise the complete cost of the property will generally be due on the day the final contract is signed. The final contract will be signed by the vendor and purchaser in front of a public notary who will legalise the transaction and also submit the necessary documents for title transfer to the land registry.
The cost of buying
In terms of the associated extra costs a property investor in Romania should budget for, they should allow for an additional circa 5% of the original purchase price. This will include the lawyer and notary costs as well as state taxes; there is an annual property tax payable in Romania as well.
As an indicator we outline some costs below:
The registration for such a company which will own the real estate amounts to between €750 and €1.500 - Antonis Loizou & Associates Real Estate Services (Romania) Srl can arrange to set-up a company for this purpose on your behalf.
The investor will need to pay transfer fees 1%-2% for the legal and other expenses, plus 1.5%-2% for the transfer fees cost. Please note that transfer fees for out of town properties, may be reduced by 50%. Thus the total cost, in addition to the cost of setting up the company, is between 2.5 to 5% of the acquisition price.
Please note that there is an additional land tax which is levied annually on the book value of the property (as revalued every three years). This varies from location to location and should be confirmed prior to any acquisition. The running cost of the Romanian company comprise of the office rental and the cost of the accountant/accountants.
Please refer to the relevant section on corporate law, and on taxation levied on real estate.