FAQ: Romanian Property Investment Advice from Anglo Romanian Consulting

Frequently Asked Questions

Below are the answers to questions about Romanian property investment which we frequently receive. If these do not satisfy your query then please get in touch via the ‘Contact Us’ page and we can provide more tailored property investment advice.

Q. Is Romania stable politically?
- A. Yes, Romania has been stable politically since the fall of the communist regime in December 1989, more than seventeen years ago. In recognition of its stability and democracy, Romania became a NATO member in 2004 and a full EU member in January 2007.
Q. Can foreigners own land and property in Romania?
- A. There are no restrictions to foreigners owning property in Romania. To acquire a Romanian property investment however, a foreign citizen needs to either set up a Romanian company or associate with a Romanian national in the transaction. This is expected to change five years after Romania joined the EU, approximately 2012. This is a standard procedure for new EU members and can be found in most of the recent EU members, e.g. Hungary, Czech Republic, Slovakia, etc. This has not discouraged foreign investors that understood and appreciated the rewards and restraints of investing in these emerging markets.
Q. Can the Government take the land off you?
- A. No more than they can in the UK. Those times have long gone; Romania is a democratic country where ownership is guaranteed. The only situation where your property could be repossessed is if it has not been legally returned to its rightful heirs after the demise of the communist regime. We perform meticulous checks on the title deeds and the designated owners to protect our clients against such possibilities. You are strongly advised to appoint an independent, reputable solicitor to thoroughly check the land registry records for your intended purchase.
Q. Am I liable for taxes in Romania?
- A. Yes, in most situations you are. It is your legal responsibility to pay taxes in Romania. Currently Romania has a uniform tax rate across the board, at a very low 16%. For rental income this means a 16% tax on your rent. However, since January 2007, there is no longer a capital gains tax. This tax, formerly at 16%, was replaced by a sales tax representing approximately 2-3% of the property value. For property purchased from companies, VAT is charged at 19%. If buying through a Romanian company, the reverse charge principle is applied to VAT.
Q. Am I liable for taxes in the UK?
- A. Almost always the answer to this question tends to be yes. It does however depend on your tax status in the UK and how your investment is structured. We are not tax advisors and we recommend you consult with a qualified tax advisor on such matters.
Q. Can we transfer money to and from Romania easily?
- A. Yes, it is a simple process which can be done via the phone, internet or personally at the bank. Chaps and standard bank transfer are possible, whilst companies like HIFX, Moneycorp, Western Union, Money Gram, also provide facilities for international money transfer. Many major foreign banks already have offices in Romania, including Citi Bank, ABN AMRO, ING, Societe Generale, Raiffeisen, Alpha Bank, etc. There are no restrictions on the amount of money you can transfer to or from Romania.
Q. Is my money safe in Romania?
- A. It is as safe as in any European Union country. Reputable international banks are present in Romania, as described above. Romania is a democratic country, an EU member, governed by EU harmonized legislation.
Q. What returns can I expect?
- A. Many experts have predicted that that Romania will be the property investment hotspot for the next 10 years. Channel 4’s a place in the Sun believes returns of 414% are possible.