Romania: Reduced VAT rate of 5% for certain residential properties in 2021

Romania: Reduced VAT rate of 5%

Legislation (no. 248/2020) published in the official journal in November 2020 amends the threshold under which the “reduced” rate of value added tax (VAT) is applicable for supplies of residential properties to individuals.

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Under the legislation, beginning 1 January 2021, supplies of residential properties will be subject to a reduced VAT rate of 5% when supplied to individuals, if the following conditions are met:

  • The maximum useful surface area is 120 m2.
  • The transaction price does not exceed the equivalent in RON of €140,000—approximately RON 682,300
  • The reduced VAT rate will be applicable only for properties that can be occupied as residences at the moment of the supply.

Read a November 2020 report prepared by the KPMG member firm in Romania

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