Romania Hikes Tax On Owners Of Multiple Homes

The tax will be 65% higher on the second home, 150% higher on the third home and 300% higher on the fourth home and other homes owned, people close to the talks told MEDIAFAX.

Owners have until December 31, 2010 to pay the taxes and individuals who pay the taxes in full until September 30, 2010 will benefit from a reduction set through decisions of local councils adopted for 2010.

The information was confirmed by Prime Minister Emil Boc at the end of the Government meeting Wednesday, who said revenues collected to the state budget from the payment of these taxes will be transferred to local budgets.

The decision to increase taxes on owners of multiple homes was made in the Government meeting Wednesday, through a decree amending the Tax Code, which no longer states the payment of a "solidarity tax," as previously stipulated in the initial draft emergency decree approved by the Government mid-June.

The currently enforced Tax Code says individuals who own two homes pay 15% more on the yearly home tax, those who own three home pay 50% more, owners of four homes pay 75% more, while owners of five or more homes pay 100%.

The initial draft emergency ordinance amending the Tax Code stipulated that owners of two or more houses, which are not rented out to third parties, would have to pay a "solidarity tax" to the local budget, by September 30, in addition to the yearly tax on property.

According to the initial draft, individuals who own two or more houses, which they are not renting out to any third parties, will have to pay 50% of the yearly tax on their second home to the local budget. Owners of three homes will have to pay 100% of the tax on the third building, while those who own four residences will pay 200% of the tax on the fourth home.

The Government argued that the tax is justified by the current economic and financial context, which requires the increase of local budgets, and estimated to collect 31 million lei (EUR1=RON4.3688) to the state budget this year.

The Government decided Monday to eliminate from the draft ordinance the provision concerning the tax on buildings and said the tax on owners of multiple homes will be hiked in its meeting on June 30 and enforced as of July 1.

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