Table of Contents
Question: What is the law regulation for foreigners buying real estate in Romania?
Answer: The Romanian Legal System establishes precise regulations concerning the matter of ownership right over real estate in Romania. There are several distinct instances that must be explained in order to fully understand the overall legal approach.
Foreign citizens can acquire real property in Romania, but only on certain conditions. These limitations generally concern immediate economic criteria that Romania had to fulfill as an active member of the European Union.
Before going into details, our team of lawyers in Romania wishes to draw attention to some specific aspects regarding the legal status of foreign nationals. We will further distinguish between three major classes: foreign citizens, stateless persons and legal entities. These are the most significant groups, representing individuals or juridical personalities who can fall under the ownership rights regulations. Legal information about buying real estate in Romania reveals several different circumstances.
Question: Are there any restrictions for foreigners interested in buying apartments or commercial buildings in Romania?
Answer: We would like to point out right from the beginning the fact that Romanian Legislation has no interdictions with reference to the ownership right over Romanian real estate such as apartments, commercial or industrial buildings for foreign citizens, stateless persons or for legal entities, regardless of their country of origin. So they can acquire ownership right over the above mentioned real estate properties under the same conditions with those applicable to Romanian citizens.
Nevertheless, the land these buildings are standing on cannot be acquired and therefore, a right of “superficies” must be established in favor of these properties. So, in brief, a foreign citizen interested to make a Romanian Real Estate investment can simply acquire the right to use the land, but not the land itself. Our Romanian lawyers can provide more information on the legal implications.
Question: I am an EU citizen interested in buying Romanian real estate. What laws apply in my case?
Answer: We would like to inform you about the ownership right over Romanian Real Estate for EU citizens, EU domiciling stateless persons and legal entities formed in an EU member state or belonging to the Economic European Area.
The land acquisition process is regulated strictly through a normative act in The Romanian Constitution. The Law no. 312/2005, Article 44 paragraph (2) final thesis establishes that “Aliens (foreign citizens) and stateless persons may acquire private ownership of lands only under the terms as may arise from Romania’s accession to the European Union and from other international treaties to which Romania is a party, on a reciprocal basis, in accordance with an organic law, as well as by way of statutory inheritance.”
At his moment, there are two different circumstances under which foreign individuals are able to acquire real estate (only land), in Romania:
- individuals not domiciled in Romania, but being EU citizens or citizens of a member state in the Economic European Area, stateless persons not domiciled in Romania, but domiciled in an EU member state and as well legal entities not domiciled in Romania (established in accordance with the legal provisions of an E.U. member state) – they all can acquire ownership right over lands, only if these lands are used to build secondary residences or secondary headquarters. So legal information to buy property Romania should point out the fact that this particular category of entities is permitted to buy land only under these conditions.
- farmers who are either citizens of an E.U. member state or stateless persons domiciled in an E.U. member state, who establish their residence in Romania, can acquire ownership right over agricultural land, forests and forestry land under the same conditions as those applicable to Romanian citizens and to Romanian legal persons, only if they can officially prove that they work as farmers and they will not change the nature of their activity during their transit period.
If you need to know more about one or both of these situations, please reach out to our lawyers in Romania.
Question: What law applies if I want to buy agricultural land in Romania?
Answer: The ownership right over agricultural land, forests and forestry land can be acquired by citizens of an E.U. member state, stateless persons domiciled in Romania or in an E.U. state member, as well as legal entities established according with legislation of an E.U. member state only upon the expiry of a 7 years term after Romania joined the E.U. This means that starting on Jan. 1, 2014, all the above mentioned categories can acquire the ownership right over agricultural land (outside and inside the built-up areas), forests and forestry land.
Investors who wish to purchase agricultural land can receive personalized information and advice from our Romanian lawyers.
Question: I am a non-EU citiezen interested in buying real estate in Romania. Am I able to do this?
Answer: We will now describe the ownership right over Real Estate for Foreign Citizens and Stateless Persons, as well as foreign legal entities – non-members of the European Union or the European Economic Area.
The foreigners buying property in Romania, the stateless person, as well as the legal entity belonging to foreign states can acquire ownership right over Romanian real estate (land), only under the conditions stipulated by international treaties, on a reciprocity basis. These conditions can be further discussed with our attorneys in Romania.
Question: We are a business organization interested in buying real estate in Romania. What kind of land are we able to acquire?
Answer: There is a law for ownership right over Real Estate for Romanian Legal Persons. As opposed to all previous restrictions, a business organization (which is a Romanian legal entity) may acquire the ownership right over Romanian real estate (lands and buildings). This regulation entitles companies which are also legal entities to the ownership right over any type of land, including agricultural land, forests and forestry land. Consequently, the shareholders or the partners of a company, no matter what their nationality, indirectly have the right to acquire lands and buildings.
The real estate market in Romania has developed a lot during the past few years and there are more and more foreign citizens that are interested in buying properties here. Although the interest for the Romanian real estate market has grown rapidly, there are still questions about the legislation regarding this process. Can foreign EU citizens buy properties in Romania directly or there is other EU legislation that they must take into account. This is why our Romanian law firm has a division specialized in real estate law.
Law no 312/2015 is the one that regulates the rights of EU and Non-EU foreign citizens buying Romanian land or properties. This law states that any citizen of a member state that does not have a legal residency in Romania, non-residents that have residence in the EU or non-residents companies that are incorporated under the EU legislation are able to get ownership of a land or property as a second residence or second headquarters. Still, there are differences in the legislation depending on the type of land you want to buy. Therefore, a legal entity or individual can get ownership of Romanian forests or agriculture land after 7 years from the date Romania joined the European Union. This excludes farmers that can prove their status as a farmer in their residence country. The experts at our law firm in Romania ca provide more details on these laws.
Purchasing an apartment in the country presented by our lawyers in Romania
If you are interested in buying an apartment in Romania, you need to take into account that this includes a percentage of the land on with the building stands on. Therefore, at this moment it is not possible to buy it without a Romanian company or a legal residency here. In addition, Non-Eu citizens can’t get ownership of Romanian land, even though they are able to own properties here based on reciprocity between countries due to international treaties.
In conclusion, if you are EU or non-EU foreign citizen interested to acquire one or more properties in Romania, do not hesitate to contact our Lawyer office at Darie, Manea and Associates in order to help you find the best way possible to do this.
DOCUMENTS REQUIRED FOR BUYING PROPERTY IN ROMANIA
Both the seller and the buyer are expected to prepare and present a number of documents to the public notary office where the authentication of the sale/purchase agreement is made.
The seller will prepare the following:
– identification card;
– the deed of ownership;
– the fiscal certificate;
– the cadastral documents (tabulation, location plan, survey plan);
– land book extract;
– energy performance certificate;
– a certificate issues by the owner’s association in the apartment building where the property is located (only for apartments);
– up-to date utilities invoices.
In addition to these, legal entities that act as the seller of a property in Romania will also present the following valid fiscal certificate, the Trade Register business registration certificate, the Board’s resolution and the associate’s decision to sell the property and a power of attorney for the company representative to conclude the sale/purchase (if applicable). Our Romanian real estate lawyers will check if all these documents are in order.
Sellers should note that the tax certificate is only valid for a limited period and in case of co-owners, the other party will also have to be present in front of the notary and obtain a separate fiscal certificate in his or her own name. Spouses who sell a jointly-owned property will also need to present their marriage certificate.
The energy performance certificate is issued by a certified energy auditor. Our Romanian real estate lawyers can help foreign nationals outsource this service. It is important to work only with an accredited auditor and he will need to be approved by the Ministry of Regional Development and Public Administration operating under the Government of Romania.
A common practice is to conclude a preliminary sales/purchase agreement, or precontract when buying property in Romania. The main advantage to this, as highlighted by our lawyers, is that in the event in which the seller abandons the transaction, the foreign buyer – with the help of a legal representative from our team – will have legal grounds to make a claim against seller for breach of contract. The preliminary agreement will include important details such as the agreed price, therefore the seller can no longer change the price of the property in the final stage of the purchase. Upon signing this first contract, the buyer is asked to pay the agreed advance on the property.
Our team of Romanian real estate lawyers can help you draft the preliminary sale/purchase agreement as well as the final document. This is authenticated at any public notary office in Romania and its execution can be between 2 and 4 days, as established with the notary.
COSTS RELATED TO PROPERTY PURCHASES IN ROMANIA
Property prices in Romania vary at a county level and also within the same city, according to the area in which the apartment or the house is located. Bucharest and Cluj are statistically two of the Romanian cities with the highest prices for real estate. The prices vary between apartments in old, communist apartment buildings and new residential complexes, particularly those located in the north part of Bucharest.
As far as property prices are concerned, an increase was reported in 2020 for some of the most important cities in the country. Our Romanian real estate lawyers present these below:
- Bucharest: the average price per square meter is approximately 1.400 Euros; at the end of 2020, an increase was observed both in case of old apartment buildings as well as new real estate (the most significant increase was in this case, with a 4% increase in November compared to October)
- Brasov: a 1,2% increase was recorded in November compared to the prior month, with the average price per square meter being around 1,231 Euros;
- Cluj: prices increased by 0.8% on a month-on-month basis; foreigners who are interested in buying property in Romania in this city will pay an average price of 1,840 Euros per square meter;
- Constanta: a 0.7% price increase in November compared to October 2020, bringing the average square per meter price to 1,253 Euros.
In Bucharest, the highest prices are for properties in the Central and North part of the city, with the highest prices in Cluj also being recorded for apartments in the central part of the city.
Apart from the actual price of the apartment, some of the other fees that the buyer needs to take into consideration are the notary fees for the authentication of the sale/purchase agreement and the tabulation tax, which can be more than 4,000 lei for an apartment of 60,000 Euros. Please keep in mind that this is a rough estimate and in practice the buyer will be faced with several taxes and fees. Our team can give you more details about what you can expect to pay when buying property in Romania, apart from the price you agree with the seller.
As this article clearly demonstrates, any type of real estate transaction calls for professional legal help. Certain specific features within the legal apparatus may seem of little importance but, from a deeper perspective, these aspects might function as essential details. The presence of one of our real estate lawyers can undoubtedly deliver a wider view of this specific topic. Quality legal assistance can evolve into long-term financial gains and it will always ensure a safe investment. We are here to help, so call our law firm in Romania for a free consultation.