How to Buy a Property in Romania

Three Parts:Understanding the Legal LimitationsFinding and Purchasing a PropertyCompleting the Sale

Romania is a beautiful country, and property prices in Romania, compared to other parts of the world, may be a bargain.[1] Romania has a moderate climate and beautiful scenery.[2] However, non-Romanian individuals who wish to buy real estate in Romania need to understand certain legal limitations and procedures that are a part of buying real estate. The general process is not much different than buying real estate anywhere else, but the legal differences that do exist are important. Especially if you are a first-time buyer in Romania, you should seriously consider hiring an attorney to assist you with the process.

Part 1
Understanding the Legal Limitations

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    Learn who can own property in Romania. Romanian law sets certain restrictions on who is allowed to own property. This will vary depending on the classification of the individual and the classification of the property:
    • Romanian citizens may freely buy and sell any property.[3][4]
    • Foreign citizens (non-Romanian) may purchase a home or apartment in Romania, but they are not entitled to own the land itself that the property sits on.[5][6] These requirements appear to be in a state of flux,[7][8] particularly with regard to citizens of European Union countries.[9][10] As time goes by, you may need to check these ownership laws again for any possible revisions.
    • Romanian companies or “legal entities” may buy property and own the land itself. It is possible, under the right conditions, for foreign individuals to create a Romanian company and then use that company to purchase land.[11][12][13][14]
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    Consider the type of property. If you are purchasing a private residence for your own use, whether a home, apartment or condominium, there are fewer legal restrictions than if you are purchasing a property primarily as an investment.[15]
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    Understand that agricultural land is different. After 2014 (a seven-year period following Romania's joining the European Union), many restrictions on the ownership of agricultural land were removed. It is now easier for foreign individuals, particularly those who are citizens of European Union nations, to own agricultural land in Romania.[16]

Part 2
Finding and Purchasing a Property

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    Select a region. Romania has several distinct regions, with varied qualities: mountains, cities, farmland, sea coast.[17] Unless you are already familiar with the country, you will probably want to work with a real estate agent or a listing agency to locate a property. Several web sites are available internationally that can help you search for properties:[18]
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    Find a real estate agent. Real estate agents in Romania are not required to be licensed or covered by any governmental agency.[19] You will want to be careful before selecting someone. When you are selecting a real estate agent to work with, ask about his or her credentials, experience with the properties in the area, length of time in the business, etc.[20]
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    Locate a property. Your local real estate agent can help you identify specific properties that are available. You can also use the same Internet sources to locate properties. Eventually, you will want to visit in person and view the property yourself.
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    Obtain a loan. Non-Romanian citizens who are working in Romania are eligible to borrow money for a mortgage loan in Romania.[21] As with other issues of Romanian real estate law, the requirement to have employment in the country may change over time, so check the latest available research. The general steps to obtaining a loan are as follows:
    • Locate a property
    • Contact several banks and compare lending rates and contract terms
    • Complete the bank's lending documents
    • Enter into a pre-contract with the seller
    • Finalize the mortgage contract with the bank as part of the closing
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    Make an offer and negotiate an agreement. When deciding how much to offer for the property, you need to consider your personal finances, the relative market price in the area, and a variety of other factors.[22] When you have determined what the property is worth to you, submit your offer through your real estate agent.
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    Understand the costs connected with the sale. The sale price of the property is not your only concern. Buying real estate, particularly in Romania, has other costs associated with it. In particular, you can expect to have the following additional costs:[23][24][25]
    • Agent’s commission. This is approximately 2-4% of the price of the property. If the deal involves both a selling agent and a buying agent, you can expect it to be double.
    • Local tax, about 2-4%.
    • Notary fees. A notary is required to be present as part of all real estate sales.[26] The fee is about 0.5-1% of the purchase price.
    • Translator fees. All non-Romanians must have legal documents translated into your own native language by a certified translator. The fee is about 60 Euro/$70 U.S./50 British pounds.
    • Surveyor’s fee. This is optional for most sales but will be about 150 Euro/$170 U.S./120 British Pounds.
    • Registration fees. Depending on the location, this may be 0.5-2.0% of the price.
    • Transfer tax. The amount of this tax will vary from 1-3% according to the length of time that the seller had owned the property and the property’s value.
    • Value Added Tax (VAT). This will not apply if the sale is from a private owner to a private buyer. However, in some circumstances, there could be a fee as high as 24%. You should check with your local real estate agent to understand if you are subject to this tax.

Part 3
Completing the Sale

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    Use a local lawyer to “verify” the property. This is a process similar to a Title Search in the United States. A local Romanian lawyer will verify the owner’s Title Deed and Land Survey documents. He or she will also obtain a report from the Romanian Land Registry.[27] All of this helps to assure that you are buying clear legal title to the property.
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    Draft a contract. This may be prepared by the notary[28] or the attorney.[29] The contract is important to bind both parties to the agreed sale.
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    Attend the closing. Both parties or their representatives are required to be present.[30] The notary will collect the necessary fees, the parties will sign the contract, and the attorneys will attend to registering the new deed with the Land Registry.[31][32] The following documents are generally required at the closing:[33]
    • Seller’s original ownership documents
    • Fiscal record of the property showing no taxes owing
    • Registration in the Land Register
    • Excerpt from the Land Register showing the property free of all mortgages or other encumbrances
    • Personal proof of identification or corporate structure or identity

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Categories: Buying Property