Romania stands out in the European fiscal landscape due to a significantly lower level of property taxation compared to the European Union average, according to an analysis carried out by a real estate consultancy company based on Eurostat data.
"Low taxation is also reflected in macroeconomic indicators, with only 0.5% of Romania's GDP coming from property taxes, compared to the EU average of 1.9% or 3.7% in France, the European leader. In Poland, the share of property taxes in GDP is 1.4%, and in Hungary, 0.8%," Cushman & Wakefield Echinox points out in a press release.
Over the past 10 years, Romania's share of property tax in GDP has decreased from 0.9% to 0.5%, thus reflecting a much faster growth of the gross domestic product compared to revenues from property taxation. At the same time, taxable property values have remained relatively fixed since 2016 and have not kept pace with the increase in property prices, further reducing their share in GDP.
Additionally, property tax revenues in Romania account for around 2.1% of total fiscal revenues, below the EU average of 4.7%, indicating a low dependency of the public budget on this form of taxation. In Greece, this share reaches 7%, in Poland 4.1%, while in France it stands at 8.4%. In Italy, property taxes represent 5.1% of total fiscal revenues, and in Spain 6.7%.
The total property tax revenues collected in Romania stood at 1.8 billion euros in 2023 (the latest year for which Eurostat data is available), far below countries such as Poland (10.7 billion euros) or Italy (45.3 billion euros). In France, property tax revenues exceed 100 billion euros annually, while Germany collects around 40 billion euros, and Spain nearly 38 billion euros from taxing property owners, according to the quoted analysis.
According to the real estate consultancy, on a per capita basis, a Romanian contributes approximately 93 euros annually through property taxes, compared to the EU average of 710 euros and 1,550 euros in France. In Poland, this indicator stands at 300 euros, while an Italian pays over 760 euros annually, and a Spaniard over 750 euros. Even in Hungary, the average contribution per resident is higher than in Romania, reaching 163 euros per year.
"The low level of property taxation in Romania has represented a real competitive advantage, supporting the development of the real estate market and facilitating access to housing for the population, thereby contributing to Romania holding the highest rate of homeownership in the European Union. On the other hand, such lenient taxation limits the funds available for public investment, as these taxes are primarily collected by local administrations," said Vlad Saftoiu, Head of Research at Cushman & Wakefield Echinox, as quoted in the press release.
Property taxes include those levied on real estate owners - buildings and land - in the form of annual taxes (local building and land taxes) or one-off payments (transfer taxes, inheritance, etc.). The level of these taxes varies significantly across EU countries, depending on local fiscal policies and the role these revenues play in national budgets.
In Romania, the tax rates applied to buildings, including residential properties, and land are among the lowest in the EU, with a standard rate of approximately 0.1% - 0.3% for residential buildings, depending on their category and location, while for commercial properties, the rate ranges between 0.5% and 1.5%, according to the source.
Cushman & Wakefield Echinox is a real estate consultancy firm and the exclusive affiliate of Cushman & Wakefield in Romania, independently owned and operated. Cushman & Wakefield employs 52,000 people across 400 offices in 60 countries. With revenues of 9.4 billion dollars, the company's core services include asset and investment management consultancy, capital markets, leasing, property management, tenant representation, project services and valuation.
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