The VAT rate for purchasing a home is increasing!
The government has decided to increase the Value Added Tax (VAT) rate from January 1 for homes up to 120,000 euros, translating into additional costs for those purchasing a new apartment or house after this date.
According to the appraisal company NAI Romania, from January 1, 2024, individual buyers purchasing a residential property with a usable area of up to 120 square meters (excluding outbuildings) and a price of up to 600,000 lei (approximately 120,700 euros) will have to pay a higher VAT, increasing from 5% to 9%.
Consequently, for an apartment at this price, meeting the above conditions, along with a series of other features making it "ready to live in" (external finishes, internal finishes, plumbing and electrical installation, etc.), the buyer will pay VAT of 54,000 lei (over 10,800 euros), instead of 30,000 lei (about 6,000 euros).
For unfinished homes, where new owners cannot move in immediately, the VAT remains at 19%. According to NAI Romania, most residential properties traded in Romania fall into this description (in terms of price and area), meaning that the VAT increase will significantly influence the real estate market, starting next year.
"If we consider only the VAT increase, new homes will become about 5,000 euros more expensive from the first day of next year. And if we correlate this additional cost for buyers with the rise in interest rates on loans and inflation, which significantly impacts each family's budget, we understand the urgency of those interested in purchasing a home, to complete a transaction in these last months of the year. The high interest in buying homes during this period has led to an increase in requests for appraisal services, based on which bank guarantees for mortgage loans are established," stated Andrei Botiș, CEO of Appraisal & Valuation SA (NAI Romania & Moldova). To ensure they benefit from the current VAT level for residential properties, individuals interested in a purchase must ensure they pay the deposit by the end of 2023 or have signed a contract before the end of the year.
The demand for appraisal services for bank guarantees, related to residential properties, increased by over 30% in the first 15 days of November, compared to the October-September 2023 period, estimates the appraisal company Appraisal & Valuation, owner of the NAI Romania & Moldova brand.
This increase is due to fiscal measures approved this autumn, with the government taking responsibility in Parliament, as assessed by NAI Romania representative.
Information has been retrieved from: www.wall-street.ro
