Advice on buying Property in Romania

Successfully Buying a Property in Romania

Foreigners can invest in Romanian real estate. It is possible for foreigners to purchase apartments with no difficulty: the process is similar to buying a freehold property in the UK.
Villas, houses and land can also be purchased by foreigners but not directly.
The Romanian Constitution presently restricts the right of ownership of Romanian land to Romanian citizens and to Romanian companies and other legal entities.
The only exception to this rule is that a non-Romanian may own Romanian land which has been inherited through the intestacy laws, i.e. not through a will.
This is expected to change when Romania becomes a member of the European Union, which is expected to be on either 1 January 2007 or on 1 January 2008.
Law 312/2005 provides that, upon Romania becoming a member of the EU, citizens of other EU countries, stateless persons domiciled in Romania or in another EU country and legal entities existing under the laws of other EU countries may own Romanian land, subject to some exceptions, on the same terms a Romanian citizens and legal entities.
The Romanian Constitution only restricts non-Romanians from owning land in Romania - it does not prevent foreigners from owning buildings constructed on land in Romania.
It is therefore perfectly possible for non-Romanians to purchase flats in Romania.
The same principle would apply also to a house, however to avoid any difficulties over the garden and driveways surrounding a house (and also the land under the house should the house burn down), it is probably better to have a Romanian company own the land and, possibly, the building on it.
This is because the owner of a building constructed on land in Romania (whether the owner is or is not Romanian) has a legal right to use the land which supports the building whilst the building exists (the so-called "superficies" right).
The notary is responsible for obtaining an excerpt in respect of the property from the Land Registry. This excerpt will specify whether there are any mortgages or other legal rights affecting the land and grant a period of priority for the transaction to be made and recorded with the Land Registry.

The notary will also collect the relevant state taxes on the transaction in addition to the notary's fees and will normally deal with the registration of the transaction in the Land Registry.
If this is not done, the transaction will be binding as between the seller and the purchaser but will not be binding on third parties.
Sellers and purchasers of real estate must either be present in person to sign the documents before the notary or must send duly-appointed representatives under formal and specific powers of attorney to do so. Such powers of attorney must however themselves have been given before a notary.
A stamp duty, including a fixed amount and percentage calculated on the value of the real property ranging from 0.5 to 3 (subject to 50 discount for transfers of undeveloped land), must be paid for notarisation of sale-purchase contracts involving real estate.
Mortgages and transfers of real property must be certified by a notary. The fee is negotiable but normally ranges from 0.5 to 1.5.
Payments of commissions and fees for services performed in Romania (e.g. consultancy and management services) are subject to a withholding tax of 15 irrespective of the location where they are performed.

These guidelines are meant for guidance only and describe a straightforward purchase scenarios. However this information is not meant to replace proper legal advice, which we always insist you take.