Buying in Romania
At the present time, the Constitution of Romania prohibits a foreign national from directly owning real estate in Romania. However, a Romanian company may own real estate in the country even if that company is owned 100% by a foreign national.
The process for creating these companies is not that difficult. We have engaged a law firm to represent our UK and Irish clients. They will set up a limited company based in Romania. There is an added bonus in that these companies will be exempt form the VAT at 16% that private individuals must pay.
The entry of Romania into the EU in 2007 is the primary reason that the Romanian government has set upon a course to liberalise the real estate laws and thereby remove the need for establishing limited companies. Currently this is set at 5 years from EU accession.
The process of purchasing commences with the execution of a preliminary contract for sale. This document establishes the purchase price and a deposit is made by the buyer. In most instances, the deposit is set at an amount equal to 20% of the overall purchase price of the property.
The purchaser is obliged to obtain any necessary financing needed to purchase their investment. Again, in the case of our UK and Irish clients the financing arrangements will be made in favour of the established Romanian limited liability company. Due to the developers excellent relationship with the Romanian banking sector they have established borrowing facilities of 80% loan to value. No other company in Romania can offer these attractive terms to their investors.
In terms of the associated extra costs a property investor in Romania should budget for at least an extra 5% of the original purchase price. Costs will include the lawyer and notary costs as well as state taxes.
UK
Morocco
Istanbul
Montenegro
Solar Investments
