Can Foreigners buy Real Estate in Romania? Buy Property in Romania

Romania offers a growing real estate market that appeals to foreign investors. Both EU/EEA and non-EU citizens have the opportunity to purchase various types of properties. However, differences exist between the rights and limitations based on citizenship. EU citizens enjoy relatively fewer restrictions, allowing them to own properties and land, while non-EU citizens often need to establish a Romanian company to own land—although they can directly acquire properties like apartments and commercial buildings. For instance, American citizens have similar property ownership rights as Romanian citizens, with particular regulations for land ownership.

Before diving into the Romanian real estate market, it’s crucial for foreign investors to understand the legal landscape. Consulting with a lawyer becomes indispensable to ensure compliance with local regulations and to handle essential documents like the Fiscal Identification Number and residency permits. Additionally, purchasing property in Romania does not grant automatic residency or citizenship, which is another pivotal factor for prospective buyers. For a detailed overview of the regulations and processes, check this resource¹.

Key Takeaways: How to Buy a Property in Romania

EU citizens face fewer restrictions and can own land and property in Romania¹.
Non-EU citizens need a Romanian company to own land, but not for properties¹.
Legal consultation is crucial to ensure compliance with local regulations.
Buying property in Romania does not grant automatic residency or citizenship.
Attractive investment regions include Prahova Valley, Transylvania, and Bucharest².

Overview of the Romanian Real Estate Market

Romania’s real estate market has shown consistent growth over recent years, making it a favorable destination for property investment. The steady increase in property prices is mirrored by a rising Romania’s residential property price index, illustrating the market’s upward trajectory and potential for profitable investments.

Current Market Trends

Current real estate investing trends in Romania reveal a diverse and dynamic market. Among the key drivers are the country’s economic growth and the rising GDP per capita, which has increased by 13.9% over the past 5 years, subsequently pushing property values higher³. Rental yields in Romania offer moderate returns, ranging from 2.6% to 5.3%³, making the rental market an attractive option for investors seeking steady income. Currency exchange rates also play a significant role in property purchases, influencing the final purchase prices and making it essential to monitor fluctuations closely⁴.

Average Property Prices

The average property prices across Romania vary significantly by region. In Bucharest, properties range between 5,000 – 10,000 RON per square meter due to the city being the national capital and economic hub³. Cluj-Napoca, known as a university city and tech hub, sees prices between 6,000 – 12,000 RON per square meter³. In contrast, cities like Iași offer more affordable rates, with property prices ranging from 3,000 – 6,000 RON per square meter, making it an attractive option for budget-conscious investors³.

Popular Regions for Investment

Several regions are particularly popular for property investment in Romania, thanks to their potential for growth and economic stability. Brasov, known for its scenic medieval old town and proximity to the Transylvanian Alps, has property prices averaging between 4,000 – 8,000 RON per square meter³. Similarly, Constanta on the Black Sea coast is famous for its vibrant summer nightlife and offers competitive property prices within the same range³. Notably, properties in Sibiu, a city celebrated for its medieval charm and status as European Capital of Culture 2007, fall within the same price bracket, attracting cultural enthusiasts and investors alike³.

For those seeking detailed guidelines on the purchasing process and legal framework in Romania, it is essential to explore resources such as the information provided by Romanian Law Office here⁴.

Legal Requirements for Foreigners

necessary documents for property purchase

Navigating the real estate laws in Romania can be intricate, especially for foreign investors. There are several legal requirements and necessary documents for property purchase that must be understood to ensure a smooth transaction.

Necessary Documents

When buying property in Romania, specific documents are indispensable. A key requirement is the NIF (Tax Identity Number), essential for property purchase, opening a bank account, and dealing with utility companies⁴. Additionally, foreign buyers need to provide Powers of Attorney, which can cost around £350 plus VAT for drafting, excluding notary fees and other related expenses⁴.

NIF (Tax Identity Number)
Proof of Identity
Property Registration Documentation
Powers of Attorney for transactions

Legal Limitations for Non-EU Citizens

Non-EU citizens face specific legal limitations regarding property ownership in Romania. While they can own residential property, they are restricted from owning the land the property is built on⁵. However, non-EU citizens can navigate this limitation by establishing a Romanian company, which then allows them to purchase land⁵. It is crucial to ensure all documentation is in order and to seek legal advice to avoid potential pitfalls.

Tax Implications

Foreign property owners need to be aware of the tax implications for foreign property owners when purchasing real estate in Romania. Additional costs, including notary fees and taxes owed to the government, can range from 1% to 3% of the property value⁴. It is also important to handle currency exchange rates carefully, as they can significantly affect the overall cost of the property purchase, leading to potential variations in amounts paid⁴.

Consulting a professional can assist in understanding these complexities, ensuring that all necessary documents for property purchase are in order, and minimizing tax implications for foreign property owners.

Can Foreigners buy Real Estate in Romania

buying a house in Romania as a non-citizen

Foreigners, including EU, non-EU, and American citizens can acquire property in Romania, albeit with some specific conditions and regulations. While foreign ownership of Romanian property is mostly unrestricted for buildings, non-EU citizens may find direct land ownership more challenging and might need to establish a Romanian company to purchase land⁶. EU and EEA (European Economic Area) citizens enjoy the same rights as Romanian citizens concerning agricultural and forest lands, broadening their investment options⁶.

It’s worth noting that buying a house in Romania as a non-citizen, especially for those outside the EU, does not automatically grant residency rights. However, property ownership can be a positive factor when applying for residency in the future³. There is no need for special authorization or a minimum investment requirement to purchase property in Romania, making it accessible for a wide range of investors³.

Real estate transactions in Romania involve specific documentation. Required documents include proof of identity, residence, and income. Engaging a local lawyer is strongly advised to navigate the legal landscape effectively, considering there are certain risks, such as title fraud and potential overpricing, that need careful attention foreign ownership of Romanian property⁶.

For commercial enterprises, the process of acquiring, owning, and using properties in Romania is relatively straightforward as long as the properties are essential for their business operations. For those seeking to buy property with the intention of obtaining a business residency permit, the prerequisite is to first apply for a business visa and demonstrate plans for commercial activities in Romania⁶.

The Romanian property market offers a varied landscape of opportunities, from urban apartments in bustling cities to serene rural homes. The average property prices per square meter vary significantly across key cities. For instance, Bucharest ranges from 5,000 to 10,000 RON, Cluj-Napoca varies between 6,000 and 12,000 RON, and Timișoara falls between 4,000 and 8,000 RON³.

Here is a quick comparison of average property prices:

City	Price per Sq Meter (RON)
Bucharest	5,000 – 10,000
Cluj-Napoca	6,000 – 12,000
Timișoara	4,000 – 8,000
Brasov	4,000 – 8,000
Constanta	4,000 – 8,000
Iași	3,000 – 6,000

Whether you are considering buying a house in Romania as a non-citizen or exploring foreign ownership of Romanian property, the overall legal framework is amicable. Non-EU citizens should stay informed about the need to establish a company for land purchase, reflecting Romania’s nuanced approach to property ownership by foreigners.

Steps to Buying Property in Romania

steps to purchasing property in Romania

When considering the steps to purchasing property in Romania, it is crucial to follow a structured approach to ensure a smooth transaction. This involves finding a reliable real estate agent, conducting a thorough property inspection process, and making an informed offer.

Finding a Real Estate Agent

Finding a real estate agent is the first step in navigating the Romanian property market. A trustworthy agent can provide valuable insights, including current market trends and property availability, making them indispensable in your search. It’s important to note that real estate agent commissions in Romania usually fall between 3% to 6% of the property price, which buyers need to budget for⁷. Additionally, hiring a real estate agent can help mitigate issues like language barriers and legal complexities faced by expats and foreign buyers⁸.

Property Inspection

The property inspection process is vital as it allows buyers to assess the condition and value of the property. In Romanian cities like Bucharest, Cluj-Napoca, and coastal areas like Constanta, property prices can vary significantly⁸. Ensuring a thorough inspection can help identify any potential issues that might affect your decision or lead to negotiations over the price.

Making an Offer

Once you have found a property that meets your requirements, the next step is making an offer. It’s essential to consider all associated costs, such as legal fees, transfer tax, and notary fees, which typically amount to around 1-3%, 2-3%, and 0.5-1% of the property value, respectively⁷. These additional costs should be factored into your budget to avoid any surprises during the purchasing process.

Step	Description	Additional Costs
Finding a Real Estate Agent	Locate a reliable agent to guide you through the market.	Commission: 3-6% of property price⁷
Property Inspection	Conduct a thorough inspection to assess property condition.	N/A
Making an Offer	Submit an offer factoring in all related costs.	Legal Fees: 1-3%, Transfer Tax: 2-3%, Notary Fees: 0.5-1% of property value⁷

Types of Property Available to Foreigners

types of Romanian property

Foreigners have a wide range of options when it comes to purchasing property in Romania. From charming residential houses and modern apartments to bustling commercial spaces and serene agricultural lands, the types of Romanian property available to foreigners are diverse and plentiful. Understanding the particularities of each property type can greatly ease the acquisition process.

Residential Properties (Houses and Apartments)

Foreign nationals can easily acquire residential properties like houses and apartments in Romania without needing to meet any residency requirements. This accessibility makes Romania an attractive location for those looking to invest in properties outside their home country⁹

Whether in bustling cities like Bucharest, where the average price for older properties hovers around EUR 1,682 per square meter¹⁰, or peaceful countryside locales, there are numerous residential opportunities to explore. EU citizens can freely purchase houses with attached land, simulating the ownership experience enjoyed by Romanian natives⁹.

Commercial and Industrial Properties

For those interested in residential and commercial real estate for foreigners, Romania offers excellent investment possibilities. Investors can acquire buildings such as office spaces, shops, malls, and industrial properties without residency limitations⁹. Bucharest stands out as a prime location due to its dynamic real estate market, bolstered by accurate property valuations from platforms like Realiste⁹. Additionally, commercial real estate investments can yield substantial returns, influenced by reasonable notary fees ranging from 0.5% to 2% depending on the transaction value¹⁰.

Agricultural and Forest Lands

Acquiring agricultural and forest lands in Romania involves more stringent regulations. While EU citizens have been able to purchase such lands since 2014, they are required to maintain residency or establish their presence for at least five years before acquisition¹¹. For non-EU citizens, purchasing agricultural lands outside of urban areas is primarily facilitated through the establishment of Romanian companies to meet legal stipulations⁹. Foreign buyers should also be mindful of laws, such as Law no. 175/2020, which enforce preemption rights and mandatory approvals, ensuring compliance to prevent nullified transactions¹¹.

Understanding the distinctions among different types of Romanian property, including the legal and regulatory requirements, can significantly enhance the investment experience for foreign nationals. For a comprehensive overview, potential buyers can find more detailed guidelines and assistance by visiting this resource⁹.

Using a Romanian Company to Buy Property

corporate property ownership in Romania

Purchasing property in Romania can be an attractive option for non-EU citizens through corporate ownership. Setting up a company to buy property can simplify the process and offer several advantages for foreign investors.

Setting Up a Company

For non-EU citizens interested in property acquisition in Romania, establishing a Romanian company is vital. This process involves registering the company with the local Trade Registry and obtaining a unique registration code. Once registered, this company can legally purchase properties, including land, which non-EU individuals cannot own directly¹.

Corporate property ownership in Romania can be beneficial due to less restrictive regulations for companies. Additionally, having a Romanian company allows non-EU citizens to hold land and buildings without needing a right of superficies agreement, which is often required if the land is purchased solely by a non-EU individual¹².

Advantages of Corporate Ownership

Corporate property ownership in Romania offers multiple advantages:

Legal Facilitation: Setting up a company to buy property enables non-EU citizens to circumvent land ownership restrictions directly applied to individuals, streamlining the process¹².
Investment Flexibility: Corporate ownership allows for easier transfer of property rights and facilitates investment diversification, making it simple to manage multiple properties under a single entity.
Tax Benefits: Romanian companies benefit from certain tax incentives and potential deductions that individual non-EU investors might not access directly. This can result in significant financial savings over time.

Moreover, corporate ownership provides non-EU citizens with better access to financing options, including loans and external funding. It also offers protection against some legal limitations that non-EU individuals face, providing enhanced security for their investments¹. For comprehensive details on the legal framework, buyers are encouraged to consult resources like this one to ensure full compliance and procedural understanding.

Aspect	Corporate Ownership	Individual Ownership
Legal Restrictions	Minimal for non-EU citizens	Direct land ownership restricted
Tax Benefits	Eligible for incentives	Limited access
Property Transfer	Simplified and flexible	More complex and regulated

Establishing a company can be the strategic move for foreign investors looking into corporate property ownership in Romania, opening doors to significant opportunities and benefits not awarded to individual buyers.

Financing Options for Foreign Investors

financing property investment in Romania

Foreign investors looking to finance property investment in Romania have several options. It’s essential to grasp the terms, interest rates, and different financing strategies before making a decision.

Bank Loans

For those considering bank loans for foreign buyers, Romanian lenders such as BRD, Raiffeisen Bank, and Banca Transilvania offer mortgages tailored for non-residents. Notably, Libra Bank is the only institution that accepts mortgage applications from foreign non-residents, with a loan-to-value ratio of up to 70% and a variable interest rate totaling approximately 9.26%¹³. Apart from the onus of meeting a minimum net income criterion of 10,000 RON, it’s crucial to engage with experienced legal professionals to facilitate a smooth transaction process¹³.

Private Financing

Private financing options can also support foreign investors in Romania. Entities like Realiste provide vital market data, property valuations, and investment recommendations, which are invaluable when opting for private financing¹⁴. This flexibility often allows quicker completion of property purchases, from identification to ensuring the property is litigation-free and registering it in the Land Book Register¹⁴. It’s advantageous for investors to leverage local legal expertise for deep insights into property laws and documentation review, ensuring the necessary paperwork is efficiently managed.

External Financing Options

External financing options are equally viable for securing property investments in Romania. Platforms like Homevest offer digital solutions that streamline the application process. This digital approach is especially beneficial as it reduces the average property procurement time to about two weeks, or up to three months at most¹³. It’s important to understand the eligibility requirements and the specific financing terms laid out by these platforms.

For more details on the different financing options available for foreign investors and a comprehensive guide on property financing in Romania, you can visit the Expat Focus Guide.

Risks and Precautions

When investing in Romanian real estate, it is essential to be aware of various risks and precautions. One of the significant risks in buying Romanian real estate is encountering legal traps. These legal traps often stem from invalid contracts, such as those missing a Fiscal Identification Number (NIF). Ensuring the validity of contracts is crucial for the enforcement and priority ranking against third parties.

Legal Traps to Avoid

Avoiding legal traps can be a challenge without thorough knowledge of the Romanian legal system. One common trap is improperly executed mortgage agreements. In Romania, mortgages over real estate require execution in front of a notary public and registration in the Land Book for enforceability against third parties and priority ranking¹⁵. Investors should also be wary of insufficiently registered movable mortgages, which can cover assets ranging from machinery to intellectual property¹⁵. These mortgages must be registered with both the National Registry for Movable Security Publicity and the Commercial Registry to be enforceable¹⁵.

In addition, Romania’s economic indices underscore potential risks. For instance, Romania ranks 69th out of 175 countries on the TI Corruption Perceptions Index 2020¹⁶, and the ease of starting a business is below the EU average according to the World Bank’s Doing Business Reports¹⁶. This indicates that prospective investors need to be diligent and cautious.

Consulting a Lawyer

The importance of legal consultation cannot be overstated when dealing with risks in buying Romanian real estate. Consulting a lawyer ensures that all contractual details are vetted thoroughly, providing peace of mind and legal protection. Legal consultations can help in navigating complex legal processes and ensuring compliance with local laws and regulations. With Romania’s strategic location attracting foreign direct investment, it is pivotal to have expert legal guidance. For more detailed insights, you can refer to the Romanian Agency for Investment and Foreign Trade report¹⁵.

The Role of Zoning and Land Use Planning

In Romania, understanding zoning laws and land use planning is crucial for any real estate investor, especially those from foreign countries. These legal frameworks determine where certain types of buildings can be located, the purpose each piece of land can be used for, and any restrictions that might apply.

Understanding Zoning Laws

Romanian zoning laws define how land within specific areas can be used. Zoning regulations often categorize areas into residential, commercial, industrial, and agricultural zones. This classification helps ensure that land use is appropriate for its location and purpose. For example, in 2023, the industrial and logistics market in Romania showed a significant interest from investors due to the country’s strategic position as a regional distribution hub¹⁷. Additionally, zoning laws play a pivotal role in promoting sustainable land use planning, ensuring harmonization between urban development and environmental conservation.

Land Use Restrictions

There are several restrictions in Romania regarding what can be built on certain land types. For instance, buildable and agricultural land is not readily available for purchase by nationals of non-EU states unless under strict reciprocity conditions, and even then, very few treaties are in force¹⁸. Land use restrictions are not merely local but often influenced by national policies aimed at sustainable development and environmental protection. In 2023, Romania saw a dynamic shift towards environmental sustainability with an increased focus on sites for photovoltaic and wind projects¹⁷. These land use restrictions ensure the proper utilization of land resources aligning with national growth strategies.

Moreover, significant real estate investments by non-EU nationals or companies are usually made through special-purpose vehicles (Romanian SPV companies) to bypass these restrictions¹⁸. Therefore, understanding Romanian zoning laws, land use planning, and specific restrictions in Romania is indispensable for compliant and profitable property investments.

Benefits of Investing in Romanian Real Estate

Investing in Romanian real estate offers a variety of substantial benefits. The country’s real estate market is characterized by its significant potential for growth, particularly in regions that attract tourism. Economic stability further enhances the allure of Romania as a viable destination for real estate investment.

Potential for Growth

One of the most compelling reasons for investing in Romanian real estate is the growth potential. Regions such as Bucharest and Cluj-Napoca have been experiencing a steady increase in property values, making them attractive locations for both residential and commercial investments. Investors in Romania may have the opportunity to obtain citizenship after completing an eight-year journey through the Residency by Investment Program¹⁹. The minimum upfront investment for Company Shareholders to gain residency is €50,000 for limited liability companies or €70,000 for joint-stock companies¹⁹.

Tourism Opportunities

The tourism sector offers excellent tourism investment opportunities in Romanian real estate. With its rich cultural heritage and growing influx of international visitors, properties in tourist hotspots are in high demand. For instance, making an investment of €1,000,000 or creating at least 100 full-time roles in Romania can pave the way for permanent residence, thus appealing to long-term investors looking to capitalize on tourism influx²⁰
Moreover, the Romanian Residency by Investment Program emphasizes benefits like access to Romania’s growing economy and potential Schengen Zone membership, making tourism-related investments even more attractive²⁰.

Economic Stability

Romania’s economic stability significantly contributes to the appeal of its real estate market. The country is enjoying steady economic growth, which translates to a robust and resilient real estate market. Investors making a significant commitment of €500,000 or creating 50 full-time roles can earn a three-year residency extension, signaling economic stability and offering long-term returns²⁰. Furthermore, sectors relevant to national security, including energy, IT, and transportation security, highlight Romania’s commitment to a secure and stable investment environment¹⁹.

In summary, the combination of growth potential, tourism investment opportunities, and economic stability makes investing in Romanian real estate an attractive and profitable venture.

Conclusion

Delving into Romanian real estate presents a promising avenue for foreigners, particularly with comprehensive insights into the market trends, legal frameworks, and financing options. The ability for EU citizens to purchase land after living in Romania for five years offers substantial opportunities for long-term investments²¹. Moreover, platforms like Realiste facilitate seamless investment processes by providing detailed property valuations and market insights without requiring physical presence²¹.

Potential foreign buyers should navigate key legal requirements, including understanding notary, land registry, and lawyers’ fees, along with compliance to Money Laundering and Terrorist Financing Laws²². Furthermore, investors are encouraged to weigh the benefits of corporate ownership as a method to bypass the limitations faced by non-EU citizens regarding direct land ownership¹⁰. This comprehensive guide to buying property in Romania aims to provide expert insights on Romanian property law, offering invaluable information to smoothly traverse the intricacies of the Romanian real estate market.

Conclusively, well-informed decisions reinforced by an understanding of zoning laws, land use planning, and tax implications will yield significant returns on investment. Partnering with experienced real estate agents and legal consultants for property inspections and negotiations is recommended to mitigate risks. By leveraging the benefits outlined, prospective buyers can capitalize on the potential for growth and economic stability offered by the thriving Romanian real estate market²¹. This expert insights on Romanian property law guide empowers foreign investors, making their venture into Romanian property both rewarding and secure²¹ and¹⁰.

FAQ

Can foreigners buy real estate in Romania?

Yes, foreigners can buy real estate in Romania. However, the process varies depending on whether you are an EU, EEA, or non-EU citizen. EU and EEA citizens have similar rights to Romanian citizens, while non-EU citizens face certain restrictions.

What are the current market trends in the Romanian real estate market?

The Romanian real estate market has been experiencing steady growth in property prices quarter by quarter. This trend is partly due to increasing demand and economic stability in key regions.

What are the average property prices in Romania?

Average property prices per square meter vary across different regions in Romania. These prices are influenced by factors such as location, property type, and regional economic conditions.

Which regions in Romania are popular for real estate investment?

Popular regions for real estate investment in Romania include Bucharest, Cluj-Napoca, and Brasov. These areas are favored due to their economic stability and potential for growth.

What documents are needed to buy property in Romania?

Foreigners need a Fiscal Identification Number and various other specific documents such as a purchase agreement, valid identification, and proof of funds to buy property in Romania.

What legal limitations exist for non-EU citizens buying property in Romania?

Non-EU citizens can buy property in Romania but are generally restricted from directly owning land. Instead, they might have to consider corporate ownership or other legal structures.

What are the tax implications for buying property in Romania as a foreigner?

There are several taxes implicated in property transactions, including government taxes, seller’s taxes, and notary fees. These can vary depending on the value of the property and other factors.

How can non-residents buy property in Romania?

Non-residents can buy property in Romania either directly (for EU/EEA citizens) or through setting up a Romanian company (for non-EU citizens). Legal and financial advice is crucial in this process.

What are the steps to buying property in Romania?

The steps include finding a reliable real estate agent, conducting a thorough property inspection, and making an informed offer. Legal advice and careful documentation are essential throughout the process.

What types of properties are available to foreign investors in Romania?

Foreigners can invest in residential properties (houses and apartments), commercial and industrial properties, and under specific conditions, agricultural and forest lands. Each type comes with its own set of regulatory parameters.

How can foreign investors use Romanian companies to buy property?

Foreign investors can set up a Romanian company to facilitate property ownership. This can offer legal and financial benefits, including easier navigation of local property laws.

What financing options are available for foreign investors in the Romanian real estate market?

Financing options include bank loans, private financing, and external financing facilities. It’s important to compare the terms, interest rates, and align them with your financial strategy.

What risks and precautions should foreign investors be aware of when buying property in Romania?

Investors should be cautious of legal traps such as invalid contracts and ensure they possess a Fiscal Identification Number. Consulting a lawyer is essential to navigate the legal landscape and avoid potential risks.

What is the role of zoning and land use planning in property acquisition in Romania?

Zoning laws and land use planning dictate permissible land use and impose restrictions. Understanding these regulations is crucial for compliance and proper use of the property.

What are the benefits of investing in Romanian real estate?

Benefits include significant growth potential, especially in regions appealing to tourists, and areas with economic stability. These factors can lead to long-term returns on investments.