Romania Finance Minister Wants Property Taxed At Real Value

„Property should be taxed at its real value, which isn’t currently happening in Romania. This entails declaring the real value of property and that is avoided when it comes to homes and land,” Vladescu told Pro TV.

The minister said property needs to be reassessed and that could raise taxes to thousands of euros.

„Romania has this great quality that is at the same time a great flaw: we are a country of property owners. In Romania, nearly 80% of households own their homes. Many of these people have trouble paying their monthly household bills,” Vladescu said.

He said most apartments now have taxable values of thousands of euros instead of tens of thousands, so taxes are set at dozens or hundreds of euros. While taxing people’s homes at their current market value would considerably boost local authorities’ revenues and allow them to invest for the benefit of the community, most people wouldn’t afford to pay such high taxes.

Vladescu said Romania should have a property tax that would not affect people with low income.

„This kind of tax could be viewed as a wealth tax and a lawmaker has proposed we introduce such a tax. (…) We’re talking about property whose value exceeds a certain level and about those rich people who flaunt their wealth that they may or may not have gained legally,” the minister said.

According to the Romanian Tax Code, individual owners pay an annual tax of 0.1% of their property’s taxable value, which is calculated with respect to property size, location and age of the building, while companies pay 0.25% to 1.5% of their property’s inventory value.

A social democrat lawmaker proposed a draft law earlier this week introducing a wealth tax whereby households should pay an annual 0.5% on net worth of more than half a million euros.

The proposed tax would be levied on real estate, securities, income and other assets belonging to an individual, their spouse and underage children. The draft law also stipulates tax deductions for buildings in the national cultural patrimony, furniture (except antiques), copyright, intellectual property rights, financial investments (life insurance, treasury bills), annuity, private pensions, equity owned in the company where the taxpayer unfolds their core activity, farming machinery and equipment.

The lawmaker said he has already been harshly criticized for his Robin Hood initiative, adding he expects further rebuke from people targeted by such a tax or rich people who have anything to hide. He said the draft law is based on the principle of transparency and would oblige everybody to submit wealth statements, not just public officials and managers in state institutions.

The social democrat also said the wealth tax has little chance of being adopted by Parliament and called on the media to pressure politicians into passing it.