On signing day you pay the notary and registration, about 1% to 1.5% of the value. A new home carries VAT: 21% on every new home.
Individuals letting long term: 10% after a 20% deduction, about 8% of rent. The deduction used to be 40%, and old guides still show 6%.
In an example with €6,600 of annual rent: €528 in Romania and about €750 in Israel on the 15% track. Together, about 19% of the rent.
An individual pays 3% of the transaction value if held up to three years, 1% after that. The 450,000 lei exemption is gone.
Corporate tax 16%, or 1% of turnover under the micro regime up to €100,000, and 16% on dividends. With one property, start as individuals.
Owning property in Romania: the question after the price
Once the price is agreed, almost every investor who asks me good questions gets to the same point: "Fine, and how much will it cost me every year?"
It is the right question, because owning property in Romania involves more than the price you paid. There is Romanian tax, there is a tax layer at home, there are running costs, and there is tax on the day you sell.
One important point before we start: the figures in this article are correct for the 2026 tax year, after the reform. Anyone quoting numbers from two years ago is working from an old map.
What you will not pay: there is no purchase tax
In Israel, for example, someone buying a second apartment for 1.5 million shekels pays about 120,000 shekels in purchase tax before getting the keys.
Romania has no such tax. What you do pay on signing day is the notary and registration, about 1%–1.5% of the transaction value in total.
A new home carries VAT: 21%. The transitional 9% rate ended on 30.09.2026, so every new home sold to an individual now carries 21%. The standard rate rose from 19% to 21% in August 2025. Check in writing, before the preliminary contract, whether VAT is included in the price you were quoted.
The running costs of owning property in Romania
These are the costs that come back every year, even if the property is not let:
- Local property tax. Set by the local authority, and it varies between authorities.
- Building insurance. If you have a mortgage, the bank will require a policy with the bank as beneficiary.
- Maintenance. For conservative planning we assume about 5% of the rent for maintenance and periods without a tenant.
- Management. If the property is let through a management company, fees are typically about 8% of the rent. For who manages the property and what happens when something breaks, see our article on managing the property from abroad.
The rule: ask anyone who shows you a calculation to put every one of these lines on paper, one by one.
Rental income tax in Romania: the update you must know
For individuals letting long term, the mechanism is simple: an automatic 20% expense deduction from gross rent, and 10% tax on the rest. In practice, about 8% of gross rent (PwC, RSM).
Note: the deduction used to be 40%, which meant about 6% in practice. Old guides still show the old number, and it is the most common mistake in the market.
Two more details:
- Above an annual income threshold of about 24,300 lei, health contributions are added.
- For short-term rentals of up to 7 rooms, the deduction is 30% and the tax 10% on the rest, so about 7% of gross rent.
The tax layer at home: the Israeli example
Your home country may tax the same rent. For Israeli residents, here is the most common mistake: the familiar 10% track for renting out an apartment in Israel does not apply to a property in Romania. Foreign rental income is taxed in Israel under one of two tracks, chosen each year:
The 15% track (section 122A of the Income Tax Ordinance)
15% of gross rent, less depreciation only. Simple to run, but on this track there is no credit for the tax paid in Romania. The Romanian tax becomes a final cost.
The marginal-rate track
You deduct all expenses (mortgage interest, management, maintenance, depreciation), pay according to your personal tax brackets, and get a credit for the Romanian tax under the tax treaty. It suits mainly people in a low bracket, people aged 60 or over, or people with high expenses, for example in the first years of a mortgage.
Cheap to enter, cheap to hold, taxed on the full value on exit. But cheap does not mean free.
Example: both layers together
Assume rent of €6,600 a year. (Illustration with simplified assumptions.)
| Layer | Calculation | Annual tax |
|---|---|---|
| Romania | 10% after a 20% deduction | €528 |
| Israel, 15% track | Assume depreciation cuts the base to about €5,000 | about €750 |
| Together | about €1,250–1,300, roughly 19% of the rent |
Still lower than what a landlord of a second apartment in Israel pays on the marginal track, but higher than the "8%" you hear in sales meetings. Anyone who shows you only the Romanian tax is telling you half the story. Depreciation, the choice of track and the final liability depend on your own figures, which is the job of a tax adviser who knows both systems. For Israeli residents, see our tax guide for Israeli buyers for the full picture.
The company route: when it starts to make sense
A Romanian company (SRL) pays 16% corporate tax, or 1% of turnover under the micro-company regime, up to €100,000 of turnover. The ceiling came down from €250,000. Profits paid out as dividends are taxed at 16%.
A rule of thumb, not advice: with one property, start by buying as individuals. With three properties or more, or land for development, a company starts to make sense. Either way, decide with a cross-border tax adviser, before signing.
From the field: the company that ate the income
Attorney Ilan Leibovitch recalls:
Three years ago a client sat in a Tel Aviv café with an investment adviser who suggested he buy an apartment in Bucharest and register it in the name of a Romanian company to be set up in his name. It was “more professional”, the adviser said, it would let him expand, and it would “help with taxes”. He signed, the apartment was bought and quickly rented out, and the rent went into the company’s account.
The surprise came at the end of the year. When an apartment is registered to an individual, tax on rent in Romania is simple and relatively low. When it is held by a company, you first pay tax at company level, and then, when you take the money out to Israel, tax again on the dividend. On top of that, the company’s fixed costs took a large slice of the cake. He came to me with the local accountant’s bundle of reports, and after all the expenses and taxes he was left with far less than he had expected. The problem was not the apartment. It was the structure.
A company can be the right tool, but usually for someone planning several properties. For a single property, personal ownership is simpler and cheaper. The decision is made before buying, with a tax adviser, not at the end of the first year.
Selling: the surprise worth knowing in advance
A sale by an individual is taxed as a percentage of the transaction value, not of the profit: 3% if you held the property for up to three years, 1% after that (Article 111 of Law 227/2015).
And a point many miss: until 2023 there was a 450,000 lei exemption threshold. It has been abolished. Today the tax applies to the full value, from the first leu.
For Israeli residents, the capital gain is reported in Israel and taxed at 25% of the profit, with a credit for what was paid in Romania under the tax treaty. Romania: a low rate on the whole value. Israel: a higher rate, but only on the profit. The Romanian regime rewards those who hold for the long term.
The 2026 map of taxes and costs
| Event | Track or condition | Rate |
|---|---|---|
| Purchase | Notary and registration | about 1%–1.5%, no purchase tax |
| VAT on a new home | Standard rate (all new homes since 1.10.2026) | 21% |
| Long-term rental, individual | 10% after a 20% deduction | about 8% of rent, plus health contributions above the threshold |
| Short-term rental, up to 7 rooms | 10% after a 30% deduction | about 7% of rent |
| Company (SRL) | Standard / micro up to €100,000 turnover | 16% / 1% |
| Dividend | Paying out company profits | 16% |
| Sale, individual | Up to 3 years / over 3 years | 3% / 1% of the transaction value |
| Israeli tax on the rent | 15% track / marginal rate | depends on personal data |
| Local tax | Set by the authority | varies |
And the cheapest advice in this article: Romania recognises Israeli succession orders, but requires a local recognition procedure. A will that explicitly mentions the Romanian property, signed now, saves your heirs a great deal of time.
Frequently asked questions
Is there a purchase tax on property in Romania?
No. Romania has no purchase tax of the Israeli kind. On signing day you pay the notary and registration, about 1%–1.5% of the transaction value, and on a new home also VAT, so check whether it is included in the price.
How much tax do I pay in Romania on rental income?
As an individual letting long term: 10% after an automatic 20% deduction, so about 8% of gross rent, plus health contributions above an income threshold of about 24,300 lei a year. For short-term rentals of up to 7 rooms, the deduction is 30%.
Does the Israeli 10% track apply to a property in Romania?
No. For Israeli residents, foreign rental income is taxed on the 15% track (no credit for Romanian tax) or on the marginal-rate track (with a credit). The choice is made each year and depends on your personal figures. For a basic overview of Romanian property taxes, see our article on tax on a property investment in Romania.
How much tax do I pay in Romania when I sell?
An individual pays 3% of the transaction value if the property was held for up to three years, and 1% after three years. The 450,000 lei exemption has been abolished, and the tax applies to the full value.
Should I buy through a Romanian company?
With one property, usually not. Corporate tax is 16%, or 1% of turnover under the micro regime up to €100,000, and dividends are taxed at 16%. With three properties or more, or land for development, it is worth examining with a cross-border tax adviser.
The bottom line
The Romanian profile in three phrases: cheap to enter, cheap to hold, taxed on the full value on exit.
But cheap does not mean free. There is Romanian tax, there is tax at home, and there are running costs. Those who see every line in advance plan properly.
If you would like to see this map applied to a specific property, in our project in Balotești or anywhere else, book a 30-minute call with me. We will go through every line and build the list for the conversation with your tax adviser. If you are also considering financing, start with our guide to a mortgage in Romania.
Moti Azulay, Compass Group Romania
Sources and data: PwC Tax Summaries, Romania · Romanian tax authority (ANAF) · Israel Tax Authority · National Union of Public Notaries of Romania (UNNPR) · Romanian legislation portal (Law 227/2015, Article 111; Law 239/2025) · RSM Romania · EY Romania (22.12.2025) · Colliers Romania, Tax Report · bpv Grigorescu Stefanica.
This article is for general information only and is not legal, tax or financial advice. Tax law in Romania and Israel changed substantially in 2025–2026 and may change again. Before any transaction, consult a tax adviser who knows the law of both countries.
Now you know more.
This article is general information, not legal, tax or financial advice. Consult local professionals before any transaction.
