Prime Minister Ilie Bolojan said on Tuesday that property taxes in Romania are "very low" as against necessary local investments.
The increase in property taxes for individuals was "a necessity", he told TVR 1 public broadcaster.
"In Romania, property taxes in all make up about 0.55% of Romania's GDP, while the average in other European countries is more than three times higher. It is 1.85%. So, the level of property taxes in Romania, for 20 years now, been very low - it's a reality - compared with the investments that must be made locally and the purchasing power in Romania versus the other EU countries," Bolojan said.
He added that Romania is committed to "correcting" that and bringing taxes to the market value of buildings. He also said that, although the general percentage increase of the tax is 70%, the contribution is not "that high" compared with taxes in other countries.
"Romania's commitment, taken four years ago by our governments - and which is conditional in the National Recovery and Resilience Plan (PNRR) - is to bring taxes up to the market value of buildings. Currently, one square metre of real estate in the urban area is around EUR 500. But no one sells an apartment block at such a price. In general, in county residences, the square metre of usable area in an apartment exceeds EUR 1,000. So, anyway, the level of taxation, today, if it were at the market price - as it is everywhere in the world - is at an acceptable level," he said.
Also, a software will be developed to estimate the market value of housing based on which taxes in 2027 would be established.
"Romania has committed that by January 1, 2027 it will set the property taxes according to the market prices. This is a medium intermediate level that in certain places could decrease, because now they are working on a software at the Ministry of Finance, which takes data from all the transactions that are made in Romania - that is, sales, purchases of apartments. (...) A database is made by settlements, apartments, cities. The more transactions there are, the more accurate the data is and it is known about the market value of a square metre of apartment in the central area."
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