Last updated: 10 March 2016
The rules concerning the taxation of residential buildings belonging to natural persons changed since the new Tax Code was enacted on the 1st of January 2016.
From now on, the tax is calculated according to the building’s destination: residential or non residential or mixt (meaning that the building is residential, but is also used as a registered office / for touristic activities) and varies between 0.08% and 0.2% of the taxable value of the building. The rate applicable is decided by the Local Council of the city where the building is located. As for the taxable value, it’s the tax
authority that establishes this value according to the building type (year of construction, material used: bricks, concrete etc.).
These changes are presented to you below.
RESIDENTIAL BUILDINGS BELONGING TO NATURAL PERSONS - HOW THE TAX IS CALCULATED
The Tax Code defines residential buildings as structures with one or several rooms used for housing purposes, as well as the required outbuildings and utilities for the satisfaction of a person’s or a family’s needs.
Until now, the tax on residential buildings belonging to a natural person was 0.1% of the taxable value of the building. Now, residential buildings belonging to natural persons are subject to a tax between 0.08% and 0.2% of the taxable value of the building.
In accordance with Decision no. 218/2015 of the General Council of Bucharest, the tax on residential buildings belonging to natural persons will be 0.1% in 2016, meaning that for the moment it is still the same as in 2015. The taxable value is calculated as the product between the built area, expressed in square meters, and the taxable value associated to the type of building provided by the new Tax Code at article 457.
For instance, if the Local Council of a certain city applies a tax of 0.1% on residential buildings, the tax on an apartment with an area of 60 square meters will be calculated as follows:
60 square meters x 1000 (taxable value associated to a building equipped with all utilities, located in area A of a locality) x2,3 (correction coefficient, whose value varies depending on the locality’s rank and the area where the building is located) x 0,1 = 138 LEI/year
As for the tax on the land related to residential buildings, it is calculated by taking into account the area of the land, the locality’s rank, the area, and the usage category of the land, as classified by the Local Council. For example, for a200 square meters land, located in the built-up area of a city, falling into the usage category “land with constructions” located in area B (second area) of the only locality rank 0 - Bucharest, the tax will be: 200 sqm x 0,8597 Lei/ha = 171,94 Lei/year.
Regarding the non residential buildings belonging to natural persons, the tax will be between 0.2% and 1.3% of the buildings value, which has to be evaluated by an authorized evaluator.
TAX PAYMENT
Tax on buildings must be paid annually, in two equal instalments, until the 31st of March and 30th of September. Those who pay the entire tax until the 31st of March can benefit from a reduction up to 10% of the tax value, but the exact amount of the reduction is established by the Local Council.