Buying Guide to Romania
Buying land or property in Romania has much in common with the process in other countries. The Romanian real estate market is efficient and well governed. Land and property are freely transferable, subject to procedural and legal formalities.
Notaries have an important role in the process and ensure the legality of the transaction. Records of land and property ownership, which include exact surface area of the land under ownership, are kept by the Romanian Real Estate Registry - as are records of any mortgages or other debts against the land or property. These records are reviewed by the notary at the point of sale.
Property and land ownership rights are as sound in Romania as any other European country, provided the appropriate legal steps are taken prior to purchasing.
Ownership Form
Foreign citizens are allowed to own property directly but cannot own land. This restriction will change with membership of the EU. Currently, the most practical way for foreign investors to purchase land is by setting up a limited company in Romania. This does mean there is some additional paperwork but our local partners take care of this and there can be some tax advantages in this form of ownership.
Money and Financing
Land and property tends to be priced in Euros although transactions are done in the local currency. The Romanian currency unit is the Leu. As part of wider economic reforms, in July 2005 Romania introduced the new redenominated Leu which is equal to 10,000 old Leu. This is a tangible sign of economic progress and is seen by many as a forerunner for eventual adoption of the Euro. Over the last year the trend has seen the Leu steady or strengthening against the Pound, Dollar and Euro.
Money can be easily sent to Romania - all the standard inter-bank and money wire channels are available and there are no restrictions on money transfer.
It is legally possible to mortgage land and property, though in practice the mortgage and credit market in Romania is very immature and financing is not generally available. This situation is set to change in the near future.
If you would like a complete breakdown of taxes & transaction costs involved in property or land purchase please contract us.
