Romania Taxing Property At Real Value Is Imminent

„This is imminent because we need to bring in money to the budget and the crisis will sharpen the need to have everyone taxed fairly. The taxation base must be real,” Crivii told a news conference.

Finance Minister Sebastian Vladescu said in January he wants property to be taxed at its real value, which would lead to taxes of thousands of euros, adding people with low income should be shielded from such taxation.

„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 said then.

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.

„It makes more sense to tax property instead of taxing work or raising VAT,” Crivii said Tuesday.

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.