Reduced VAT rate for more expensive residential properties

Reduced VAT rate for residential properties

Amendment made to the threshold under which the reduced VAT rate is applicable for supplies of residential properties to individuals

Alin Negrescu

Tax Partner, Head of Automotive and Industrial Markets

KPMG in Romania


Law no. 248/2020 on amending art. 291 of the Fiscal Code (Law no. 227/2015) was published in the Official Journal of Romania (no. 1079) on 13 November 2020. The Law states that starting from 1 January 2021, supplies of residential properties with a maximum useful surface area of 120 m2 and the price of which does not exceed the equivalent in RON of EUR 140.000, will be subject to the reduced VAT rate of 5% when supplied to individuals. The reduced VAT rate will be applicable only for properties which can be occupied as such at the moment of the supply.

KPMG Comment

Considering the fact that this amendment to the threshold will come into force starting from 1 January 2021, sales contracts of residential properties concluded this year must be analyzed from the perspective of the applicable VAT rate by taking into account the specific rules in this regard.

©2024 KPMG România SRL, a Romanian limited liability company and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.

For more detail about the structure of the KPMG global organization please visit


Connect with us

Stay up to date with what matters to you

Gain access to personalized content based on your interests by signing up today