The government proposes the application, for the first time for the Romanian tax legislation of a system with two different VAT rates for a single real estate transaction. Thus, if the price of the purchased home exceeds RON 450,000, the reduced rate of 5 percent of VAT will be applied up to this threshold and the standard rate of 19 percent of VAT will be applied on what exceeds RON 450,000.
Currently, the reduced rate of 5 percent is applied on the tax base for the delivery of homes that have a usable area of maximum 120 sqm, excluding household annexes, whose value, including the land on which they are built, does not exceed RON 450,000, being purchased by individuals.
