From 1 October 2026, every new home a developer sells to an individual carries 21% VAT, whatever its size or price.
The reduced housing rate was abolished in August 2025. The transition, for contracts before 1 August 2025, ended on 30 September 2026.
Law 161/2026 extended the transition to 30 September 2026. A proposal to extend it into 2027 did not become law.
On a villa at €250,000 before VAT, the difference between 21% and 9% is €30,000.
Does the price include VAT? At what rate? What does it apply to? And what is not included?
VAT on new homes in Romania: the short answer
In Romania, anyone buying a new apartment or villa from a developer pays VAT at 21%, and from 1 October 2026 that is the rate on every new home sold to an individual, whatever its size or price. The reduced 9% rate for housing was abolished in August 2025 and survived only in a transition for contracts signed by 1 August 2025, which ended on 30 September 2026. The sale of an "old" building, one occupied for more than a calendar year, is generally exempt from VAT.
Almost every investor who brings me a price offer from elsewhere asks the same question: "Does this price include VAT?" Over the past year, the answer to that question has been worth tens of thousands of euros.
What changed: from 19% to 21%, and from 9% to 21%
Law 141/2025 redrew Romania's VAT map from 1 August 2025:
- The standard rate rose from 19% to 21%.
- The reduced 9% rate for housing was abolished. Until then, individuals could buy a home of up to 120 m² of usable area, worth up to 600,000 lei before VAT, at 9% VAT. Since then, a new home sold to an individual is taxed at the standard rate.
- A transition was set for buyers already in the process, and it was extended once.
The reduced 11% rate that remains in the law covers specific categories of social housing and institutions, not a private buyer of an apartment or villa. The summary by PwC lists the current VAT rates.
The 9% transition: who it was for, and why it ended
The transition let an individual buy one home at 9% until 31 July 2026, if all of these conditions were met:
- Size and price: up to 120 m² of usable area, and a value of up to 600,000 lei before VAT, including the land.
- Preliminary contract: a contract with an advance signed by 1 August 2025. A contract signed between 3 and 31 July 2025 also required at least 20% paid by 31 July 2025.
- Once only: the buyer had not bought another home at a reduced VAT rate since 1 January 2023.
- Habitable home on the delivery date.
Law 161/2026, published on 4 August 2026, extended the deadline for signing the notarial deed to 30 September 2026. A proposal to extend it into 2027 did not become law. From 1 October 2026, every new home sold to an individual carries 21% VAT.
And for readers abroad: even while the transition was open, it was for people who had signed a preliminary contract by August 2025. A new buyer today cannot enter it.
When a property counts as "new" for VAT
This distinction matters as much as the rate. Under Article 292 of the Fiscal Code, a building counts as new until 31 December of the year after its first occupation or use.
| Type of transaction | VAT |
|---|---|
| New apartment or villa from a developer, from 1 October 2026 | 21% |
| New home under the transition, deed signed by 30 September 2026 | 9% |
| "Old" building (after 31 December of the year following first occupation) | Generally exempt, unless the seller opts to charge VAT |
| An individual selling their own private home | VAT generally does not apply |
In other words: "new" is not a marketing word, it is a tax status with an expiry date.
What it means in practice: an example
Say a new villa costs €250,000 before VAT. (Illustration only.)
| Before VAT | VAT | Total price | |
|---|---|---|---|
| At 21% | €250,000 | €52,500 | €302,500 |
| At 9% (the closed transition) | €250,000 | €22,500 | €272,500 |
The difference: €30,000. That is why it matters so much to know which number you are talking about.
How to check whether VAT is included in the price
In Romania, prices of new homes are often published "+TVA", meaning before VAT. Four questions to ask before the preliminary contract:
"New" is not a marketing word, it is a tax status with an expiry date.
- Does the price include VAT? Get the answer in writing, in the contract itself.
- At what rate? 21%, and what happens if the rate changes before delivery. The contract should say who bears the change.
- What does VAT apply to? The house, the land, the parking space and the storage unit.
- What is not included? Notary, registration and legal fees are separate costs. We list them in our guide to property buying costs in Romania.
In our project in Balotești, the price starting at €299,900 is all-inclusive, VAT included. But that is not the case in every project, so the first question should always be "included or not included?"
From the field: the fixed price and the email about material costs
Attorney Ilan Leibovitch recalls:
A client who already owned two investment apartments in Israel bought an apartment from a developer in Romania. He was used to contracts indexed to the construction cost index, so he was relieved to find that the Romanian contract had no indexation clause. It had a single exception: if the VAT rate rose between signing and handover, the difference would fall on him. Beyond that, the price was locked, and the contract said so.
A year later an email arrived from the developer: “Price update due to rising material costs”. Steel and concrete prices in Europe had jumped because of the war in Ukraine, and the adjustment, the email said, was “unavoidable”.
I read the contract again, clause by clause. A fixed price, not linked to any index, with one explicit exception: VAT. No “construction costs”, no “unforeseen circumstances”. I replied to the developer on the client’s behalf, politely, that the demand had no contractual basis. The developer tried to reach a partial compromise, and the client refused. The apartment was handed over at the price agreed on the day of signing.
Note both sides of the story: the contract protected the client from rising material costs, but left the VAT risk with him. When VAT on new homes goes up, the first question in the contract is who bears the difference.
VAT, mortgages and payment stages
When buying off-plan, VAT is usually paid with each instalment under the preliminary contract, and the developer issues an invoice for each payment. The instalments themselves go into the project's dedicated account under Law 207/2025.
If you take a mortgage, remember that VAT is part of the price you need to finance, from your own funds or from the loan, so financing plans start from the total price. More on that in our guide to mortgages in Romania. And on the differences between buying off-plan and buying a finished property, including what it means for VAT, see our article on off-plan vs ready property.
Frequently asked questions
How much VAT is there on a new home in Romania?
21%. From 1 October 2026 this is the rate on every new home a developer sells to an individual, whatever its size or price. The reduced 9% rate survived only in a transition that ended on 30 September 2026.
Do non-residents pay the same VAT as Romanians?
Yes. VAT applies to the transaction, not to the buyer. The transition's conditions did not depend on residence either, but on the contract, the area, the price and the dates.
Can I still buy a home at 9% VAT?
No. The transition required a preliminary contract with an advance signed by 1 August 2025 and a notarial deed by 30 September 2026. A new buyer pays 21%.
Is there VAT on a resale home in Romania?
Generally not. An individual selling their own private home does not charge VAT, and the sale of an "old" building is generally exempt. A building counts as new until 31 December of the year after its first occupation.
How do I know if the price includes VAT?
Ask, and get the answer in writing in the contract. Prices of new homes in Romania are often published "+TVA", and the gap between the two figures is 21% of the price.
The bottom line
The past year closed the door on reduced VAT for new homes in Romania. Anyone buying from a developer today pays 21%.
That is no reason to give up on a deal. It is a reason to compare total prices, not "before VAT" prices, and to ask for everything in writing in the contract.
If you have a price offer on the table and are not sure what it includes, book a 30-minute call with me. We will break the price into lines together, and you will know exactly what you pay on signing day. For the full picture of taxes in both countries for buyers from Israel, see our tax guide for Israeli buyers.
Moti Azulay, Compass Group Romania
Sources and data: Romanian legislation portal (Law 141/2025; Fiscal Code, Law 227/2015, Articles 291 and 292) · Monitorul Oficial (Law 161/2026, issue 642, 4 August 2026) · Romanian tax agency (ANAF) · PwC Tax Summaries, Romania · EY Romania, Tax Alert (2025).
This article is for general information only and is not legal, tax or financial advice. Romanian VAT rates changed several times in 2025–2026 and may change again. Before signing, check the current position with a local lawyer or tax adviser.
Now you know more.
This article is general information, not legal, tax or financial advice. Consult local professionals before any transaction.
