Extended Deadline for Applying the Reduced VAT Rate
Thank you for reading this post, don't forget to subscribe!The Chamber of Deputies, acting as the decision-making chamber, has adopted a bill providing for the extension of the deadline for applying the reduced 9% VAT rate to the purchase of certain new homes by individuals.
According to the bill, the deadline would be extended until July 31, 2026, from May 31, 2026, for buyers who meet the conditions provided by tax legislation.
The measure targets individuals who entered into bilateral sale-purchase promises and paid an advance before January 1, 2024. The extension is intended to provide additional time to complete transactions affected by delays in the construction, acceptance, or land registration of the homes.
What Are the Conditions for the 9% VAT Rate
The transitional tax regime applies to homes that meet the conditions provided by the Fiscal Code. Relevant criteria include:
- the purchase price must not exceed RON 600,000, excluding VAT;
- the home must have a usable area of no more than 120 sq m, excluding outbuildings;
- the property must be suitable for occupancy as such at the time of delivery.
The extension of the deadline was justified by delays that do not always depend on buyers, including administrative or technical issues related to utility connections, acceptance of the works, and the registration of properties in the land register.
What Buyers and Developers Need to Know
For buyers who have paid advances and are in the process of completing transactions, the extension of the deadline may represent an opportunity to continue benefiting from the reduced VAT rate, provided that all legal conditions are met.
Real estate developers, in turn, must closely monitor the completion deadlines for their projects and the documentation required for the transfer of ownership.
However, the bill adopted by Parliament must be promulgated by the President of Romania and published in the Official Gazette in order to enter into force. Therefore, until these steps are completed, the extension of the deadline does not yet produce legal effects.