Selling Romania Property To Foreign Buyers

Are you considering buying property in Romania as a foreigner? Congratulations! You’re about to embark on an exciting journey of exploring one of the most beautiful and dynamic countries in Europe. But before you dive into the real estate market headfirst, there are some things you should know. From navigating legalities to understanding local customs, this guide will equip you with all the knowledge and insights necessary to make your purchase successful and stress-free. So grab a coffee or tea, settle in, and let’s get started!

 

Quick economic history of Romania:

Romania has a complex economic history that has been shaped by a variety of factors, including geography, natural resources, political events, and economic policies.

In the early 20th century, Romania was primarily an agricultural country, with a large rural population and a relatively small industrial sector. However, during World War II, the country underwent significant industrialization and modernization, with a particular focus on heavy industry such as mining, metallurgy, and energy production.

Following the war, Romania became a communist state under the leadership of Nicolae Ceaușescu. During this period, the government implemented a series of economic policies that aimed to rapidly industrialize the country and increase its economic self-sufficiency. However, these policies were often inefficient and unsustainable, and by the 1980s, Romania was facing a severe economic crisis characterized by food shortages, power outages, and a large external debt.

After the fall of the communist regime in 1989, Romania began a process of economic liberalization and market-oriented reforms. The country joined the European Union in 2007, which helped to stimulate economic growth and modernization. Today, Romania has a mixed economy that is dominated by the services sector, although agriculture and manufacturing are also important components.

Despite significant progress in recent years, Romania continues to face a number of economic challenges, including high levels of corruption, a large informal economy, and persistent poverty and inequality. Nevertheless, the country has made significant strides in terms of economic development and integration into the global economy, and it remains an important player in the region.

Architectural history and heritage in Romania:

Romania has a rich architectural history that spans several centuries and encompasses a range of styles and influences. Here are some of the key periods and styles of architecture that have shaped Romania’s built environment:

• Ancient period: Some of the oldest surviving architectural artifacts in Romania date back to the ancient Dacian civilization, which thrived in the region from around 500 BCE until the Roman conquest in 106 CE. Examples of Dacian architecture include fortifications, temples, and palaces.
• Medieval period: During the medieval period, Romania was ruled by a series of feudal lords and foreign powers, including the Ottoman Empire and the Austro-Hungarian Empire. This period saw the construction of a range of architectural styles, including Gothic, Renaissance, and Baroque, as well as the development of the distinctive Moldavian style, which blended Byzantine and Gothic elements.
• Neo-Classical period: In the 19th century, Romania underwent a period of modernization and urbanization, which led to the construction of many new public buildings, including theaters, museums, and government buildings, in the Neo-Classical style.
• Art Nouveau and Modernist period: In the early 20th century, Romania experienced a burst of creativity and experimentation in architecture, with a range of styles including Art Nouveau, Secessionist, and Modernist. Notable architects of this period include Ion Mincu, who is often considered the father of Romanian architecture, and Marcel Janco, a key figure in the Dadaist movement.
• Socialist Realism period: Following World War II, Romania came under communist rule, and architecture became a tool of state propaganda. The Socialist Realism style dominated during this period, with monumental public buildings, housing blocks, and industrial complexes designed to convey the power and glory of the state.

Today, Romania’s architectural heritage is a source of pride and inspiration for many, and efforts are underway to preserve and restore historic buildings and promote innovative contemporary design.

 

Real Estate Marketplace in Romania:

The real estate market in Romania has seen significant growth and development in recent years, particularly in urban areas such as Bucharest (capital, cultural and economic center), Cluj-Napoca (cultural and economic center), Brasov (mountains, cultural and popular destination for outdoor enthusiasts), Sibiu (medieval architecture, historic landmarks, and cultural events), Constanta (Black sea, history, architecture and tourism) and Timișoara (economic center, cultural events). Here are some key trends and factors shaping the current real estate market in Romania:

• Growing demand: As the economy continues to develop and incomes rise, there is increasing demand for housing and commercial real estate in Romania, particularly in urban areas. This has led to a construction boom in many parts of the country, with new residential and commercial developments springing up to meet demand.
• Favorable investment climate: Romania’s favorable investment climate, coupled with its relatively low real estate prices compared to other European countries, has made it an attractive destination for foreign investors seeking opportunities in the real estate sector.
• Rental market: The rental market in Romania has also seen significant growth in recent years, driven by increasing demand from students, young professionals, and tourists. Rental yields are generally higher than in other European countries, making the rental market an attractive investment opportunity for property owners.
• Regulatory framework: The Romanian government has made significant efforts to improve the regulatory framework for the real estate sector, including measures to increase transparency, reduce corruption, and streamline the process of buying and selling property.
• Challenges: Despite the positive trends, the real estate market in Romania still faces some challenges, including issues related to property rights, land ownership, and bureaucratic procedures. Corruption and legal uncertainties can also pose challenges for investors.

Overall, the real estate market in Romania presents significant opportunities for investors and developers, particularly in urban areas. However, careful consideration of local regulations, market trends, and potential risks is essential for success in this dynamic and rapidly-evolving sector.

 

How much does it cost to buy property in Romania?

The cost of buying property in Romania varies widely depending on a number of factors, including the location, type of property, and condition of the property. Here are some approximate price ranges to give you an idea of what you can expect:

• Apartments: In major cities like Bucharest, depending upon its location, a studio apartment can start at around $11,800-$14,100 USD, while a larger two or three bedroom apartment can cost anywhere from $23,500-$200,500 USD or more, depending on the location and amenities.
• Houses: As with the apartments, the cost of buying a house in Romania can vary widely depending on the location and size of the property. In rural areas, you may be able to find a small house or cottage for as little as $11,800-$23,500 USD, while a larger house in a desirable neighborhood in a major city can cost upwards of $400,600 USD or more.
• Land: If you’re interested in buying land in Romania, the cost can vary widely depending on the location and size of the plot. In rural areas, you may be able to find a small plot of land for as little as $235-$2,350 USD, while larger plots in more desirable areas can cost hundreds of thousands or even millions of Euros.

It’s important to note that these are approximate price ranges and that the cost of buying property in Romania can vary widely depending on a number of factors. Additionally, there may be additional costs associated with buying property in Romania, such as legal fees of Notary Public, Government taxes and commissions for real estate agents/brokers (usually 3% of the signed purchasing contract).

 

Real estate purchases in some of Romania’s major cities:

There can be significant differences in real estate purchase prices between different cities in Romania. Generally speaking, prices tend to be higher in larger cities and in more desirable neighborhoods within those cities, while prices may be lower in smaller towns or more rural areas. Here are three examples:

1. Bucharest: In the capital city of Bucharest, real estate prices tend to be among the highest in the country, especially in desirable neighborhoods like Herastrau area, Primaverii area, Amzei (Romana area) and Dorobanti area. Prices for apartments in Bucharest can range from around $940 – $1,400 USD/square meter, while houses can cost anywhere from $1,200 – $5,400 USD/square meter depending upon classification of Romanian historical heritage list.
2. Cluj-Napoca: In the city of Cluj-Napoca, which is known for its vibrant cultural scene and thriving tech industry, real estate prices are generally higher than in smaller cities and towns. Prices for apartments in Cluj-Napoca can range from around $720 – $1,100 USD/square meter, while houses can cost anywhere from $800 – $2,400 USD/square meter depending upon classification of Romanian historical heritage list.
3. Timisoara: In the western city of Timisoara, which is known for its beautiful architecture and cultural diversity, real estate prices tend to be somewhat lower than in Bucharest or Cluj-Napoca. Prices for apartments in Timisoara can range from around $420 – $900 USD/square meter, while houses can cost anywhere from $300 – $1,900 USD/square meter, again, depending upon classification of Romanian historical heritage list.

 

Selling properties to foreign buyers in Romania:

Selling property to foreign buyers in Romania is a relatively straightforward process and in some cases, without any restrictions, but it requires some knowledge of the legal requirements and procedures involved.  Here are some key points to keep in mind:

• Ownership: In Romania, foreigners can own property without any restrictions, but they cannot own land in certain designated areas, such as near the border or in protected natural areas.
• Property market: The Romanian property market has been growing steadily in recent years, with increasing interest from foreign buyers, especially in popular tourist areas such as Bucharest, Brasov, and the Black Sea coast.
• Real estate agents: It is advisable to work with a reputable real estate agent who has experience working with foreign buyers. They can help you navigate the market, find properties that meet your requirements, and guide you through the buying process.
• Legal requirements: When selling property to foreign buyers, there are some legal requirements that need to be followed, such as obtaining a tax identification number, registering the sale with the land registry, and paying the necessary taxes.
• Language: It is important to have all legal documents translated into the buyer’s language to ensure they understand the terms and conditions of the sale.
• Financing: Foreign buyers can obtain financing from Romanian banks, but it can be more challenging than for Romanian citizens. Therefore, it is advisable to have a clear understanding of the financing options available before beginning the buying process.

 

Legal Requirements for Foreigners to Buy Property in Romania:

Foreigners can buy property in Romania without any restrictions, but there are some legal requirements that they need to fulfill. Here are the key legal requirements for foreigners to buy property in Romania:

1. Obtain a tax identification number: Foreigners who want to buy property in Romania need to obtain a tax identification number (also known as a CNP). This can be obtained from the Romanian Tax Authority.
2. Sign a preliminary sale-purchase agreement: Before the sale can be finalized, the buyer and seller must sign a preliminary sale-purchase agreement. This agreement sets out the terms of the sale, including the price, payment schedule, and any conditions that need to be met.
3. Obtain a land registry extract: The seller must provide the buyer with a land registry extract (also known as a cadastral extract) that shows the ownership status and any encumbrances on the property.
4. Pay the purchase price: The buyer must pay the purchase price to the seller according to the terms set out in the preliminary sale-purchase agreement.
5. Register the sale with the land registry: After the purchase price has been paid, the buyer must register the sale with the land registry. This involves submitting the sale-purchase agreement, the land registry extract, and other required documents to the land registry.
6. Pay the necessary taxes: The buyer is responsible for paying the necessary taxes related to the purchase of the property. These taxes include a transfer tax, a land registration fee, and a notary fee.
7. Obtain approval for certain types of properties: Foreigners may need to obtain approval from the Romanian government to buy certain types of properties, such as agricultural land or properties located near the border.

Overall, buying property in Romania as a foreigner is a relatively straightforward process, but it is important to be aware of the legal requirements and procedures involved to ensure a successful transaction. It is recommended to work with a reputable real estate agent and a lawyer who is familiar with the Romanian property market and can guide you through the process.

 

Real Estate Tax laws in Romania for local/foreigners:

Foreigners who own real estate in Romania are subject to the same tax laws as Romanian citizens. The main taxes related to real estate in Romania are:

• Property tax (Impozit pe cladiri): This is an annual tax that is calculated based on the value of the property. The tax rate varies depending on the city or town where the property is located and can range from 0.08% to 0.2% of the property’s assessed value. The assessed value is determined by the local tax authorities and is based on a number of factors, including the size, age, and location of the property.
• Transfer tax (Impozit pe transferul dreptului de proprietate): This is a tax that is paid when the ownership of a property is transferred from one person to another. The tax rate is 3% of the property’s assessed value and is paid by the buyer.
• Capital gains tax (Impozit pe venituri din transferul proprietatilor imobiliare): This is a tax that is paid on any profit made from the sale of a property. The tax rate is 16% for Romanian residents and 1% for non-residents. Non-residents may also be subject to a withholding tax of 16% on the sale price of the property.

It’s important to note that these tax laws can be subject to change, and it’s always a good idea to consult with a local tax professional or real estate agent to get the most up-to-date information on tax obligations related to real estate in Romania.

 

Find a Good Real Estate Agent in Romania

Finding a good real estate agent in Romania is an important step when buying a property. Here are some tips to help you find a reputable agent:

• Your own research: Do some research online and look for real estate agencies that have a good reputation in Romania. You can also ask for recommendations from friends or colleagues who have bought property in Romania before.
• Real Estate agency credentials: Check that the Real Estate agency is licensed. As the Real Estate agency may or may not be registered with local Real Estate Advertising (ANCPI), all employees should have knowledge about Real Estate market. You can also verify their credentials by checking their website, social media pages, or professional associations.
• Experience: Look for an agent who has experience working with foreign buyers and who has a good knowledge of the local property market. This will help ensure that you find the right property at the right price.
• Communication skills: It is important to work with an agent who has good communication skills and who can understand your needs and requirements. Look for an agent who is fluent in English or your preferred language. You will be surprised to find that most of the agents speak at least three languages.
• Transparency: Choose an agent who is transparent about their fees and who can explain the buying process to you in a clear and concise manner.
• Personal connection: It is important to choose an agent that you feel comfortable working with and who you trust. A good agent will take the time to understand your needs and preferences and will work with you to find the right property.

By following these tips, you can find a good real estate agent in Romania who can help you find the right property and guide you through the buying process.

 

Purchase a property directly from the owner:

• Property owner: a simple person (an individual that owns the property) can sell a property in Romania. There are no restrictions on who can sell a property in Romania, as long as the seller is the legal owner of the property or has the legal authority to sell the property on behalf of the owner. However, when selling a property, the seller must comply with the legal requirements and procedures that are in place. Therefore, the owner must complete and have all the paperwork required to the Notary Public before the transaction take place such as obtaining a tax identification number, signing a preliminary sale-purchase agreement and registering the sale with the land registry.
• Is there a need of Real Estate agent or a lawyer: No. A property owner can sell a property in Romania without the need of an agent. There is no legal requirement to use a real estate agent when selling a property in Romania, and some property owners choose to sell their property on their own to save on commission fees. However, selling a property can involve a lot of paperwork and legal requirements, so it is important for property owners to be familiar with the process and willing to put in the time and effort to complete all necessary steps. This may include conducting due diligence on potential buyers, preparing the necessary paperwork, and negotiating the sale price. It is also important for property owners to be aware of the current market conditions and have a good understanding of the value of their property in order to set an appropriate price.
• Saving money purchasing directly from the owner: due to the fact all real estate transactions are facilitated by a Notary Public, when purchasing a property directly from the owner, you may need to conduct more due diligence to ensure that the property is in good condition and that the sale is conducted fairly. If you are comfortable conducting your own research and due diligence, and are confident in your ability to negotiate directly with the seller, purchasing a property directly from the owner can be a good way to save money on commission fees. Just be sure to carefully review all documentation related to the sale and to work with a Notary Public to ensure that the sale is conducted in compliance with Romanian law.
• Property owner and Notary Public: there is a need for a Notary Public when selling a property in Romania, even if you are the property owner. The Notary Public plays an important role in the sale process and is responsible for ensuring that the sale is conducted in compliance with Romanian law. The Notary Public is responsible for preparing and signing the sale-purchase agreement between the buyer and the seller. They will also verify the identity of the parties involved and confirm that they have the legal authority to enter into the sale agreement. The Notary Public will also ensure that all necessary taxes and fees related to the sale are paid, and that the sale is registered with the relevant land registry. It is important to note that the Notary Public is an impartial third party and does not represent either the buyer or the seller. Their role is to ensure that the sale is conducted fairly and in compliance with Romanian law.  In summary, if you are a property owner selling a property in Romania, you will need to work with a Notary Public to complete the sale. The Notary Public will play an important role in preparing the sale-purchase agreement, verifying the identity of the parties, and ensuring that the sale is conducted in compliance with Romanian law.

 

How long it will take for a foreigner to purchase a property in Romania?

The length of time it takes for a foreigner to purchase a property in Romania can vary depending on several factors. Here are some of the typical steps involved in the process:

1. Finding the Property: This step can take as little or as much time as needed by the buyer to find a suitable property and agreeable purchase price.
2. Signing a Pre-Purchase Agreement: Once the buyer finds the property and agrees on a price, they will typically sign a pre-purchase agreement. This agreement will outline the terms and conditions of the sale, including the price, payment schedule, and any contingencies.
3. Obtaining Financing: If the buyer requires wire transfer to purchase the property, this can also add time to the process. This can take few days if the transfer is made from a non-Romanian bank as well as from seller’s financial situation.
4. Signing the Sale-Purchase Agreement: Once due diligence is complete and financing is secured, the buyer and seller will sign the sale-purchase agreement. This typically takes few hours at the Notary Public to finalize. Once the money is received by the seller, the Notary Public will finalize all the sale-purchase agreement (Contact de Vanzare Cumpare).
5. Registering the Property: Finally, the property must be registered with the land registry, which can take several days to complete. If you’re in hurry, since you’re already to the Notary Public, you may complete a document to the seller to represent your interests and register your property (Procura) on your behalf to local authorities.

Overall, the process of purchasing a property in Romania can take anywhere from one day to several days, depending on the specific circumstances involved.

 

What are the restrictions on foreigners buying property in Romania?

Foreigners are generally allowed to buy property in Romania, but there are some restrictions and requirements to be aware of. Here are some of the key restrictions:

• Land acquisition: Foreign individuals or companies cannot acquire land in Romania except for specific cases, such as when the land is part of an inheritance or when the land is used for commercial or industrial purposes. However, foreign individuals or companies can acquire apartments or buildings without any restrictions.
• EU vs non-EU citizens: Citizens of EU member states, as well as citizens of Norway, Iceland, Liechtenstein, and Switzerland, have the same rights as Romanian citizens when it comes to purchasing property in Romania. However, citizens of non-EU countries may need to obtain approval from the Romanian Ministry of Justice before purchasing property.
• Restricted areas: Certain areas in Romania, such as border areas and natural reserves, are subject to additional restrictions on property ownership by both Romanian and foreign citizens.
• Agricultural land: Foreigners are not allowed to acquire agricultural land in Romania, except for specific cases such as when the land is part of an inheritance or when the land is used for commercial or industrial purposes. The maximum amount of land that a foreigner can own is 0.4 hectares (1 acre). Lastly, foreigners must obtain approval from the “National Cadastre Office and Real Estate Advertising” (ANCPI) before purchasing any property in Romania.
• Residential land: The other restriction that foreigners need to be aware of before buying property in Romania si that the foreigners are only allowed to purchase residential property – they cannot buy land or commercial property split share underneath the property.
• Sale your own land (agricultural/commercial/residential property): Once you become the sole owner of the property and decide to sell it to another foreigner, there are no additional restrictions or requirements; it just gets transferred to the new foreigner having the same land restrictions. Of course, the entire transaction must be handled by a Notary Public and it will follow the same steps you’ve been exposed to when you first purchased the property.

It is important to note that these restrictions can change over time, so it is a good idea to consult with a lawyer or real estate agent who is familiar with the latest laws and regulations related to property ownership in Romania.

 

Conclusion:

Investing in real estate in Romania can be a good opportunity for those who are looking for a relatively low-cost market with the potential for growth. The real estate market in Romania has been steadily growing in recent years, and many foreign investors have shown interest in the country’s property market. Additionally, Romania’s strong economic growth and low cost of living make it an attractive destination for investors.

Buying property in Romania as a foreigner can be an exciting and rewarding experience, but only when you do it right. Knowing the basics of the Romanian legal system and being familiar with local regulations are essential before making a purchase. And if you’re considering investing in real estate or starting a business here, make sure that you have all the necessary documents to avoid any problems down the line. With these tips in mind, we hope that your journey into buying property in Romania will be a successful one!

 

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