Regarding real estate transactions carried out in Romania, there are several crucial legal aspects that it is necessary to be aware of both as a property seller and as a buyer.
It is essential to be aware of the required documents and expenses when deciding to sell or purchase real estate. Therefore, in the following, we will describe this information as accurately as possible.
Real Estate Sales and Purchase Agreement
The real estate sales and purchase agreement is the legal document that regulates the conditions under which the transfer of property rights over a real estate property from the seller to the buyer will take place
The mandatory information to be included in the real estate sales and purchase agreement is as follows:
❖ Information about the involved parties.
❖ Description of the real estate property - address, number of rooms, built and usable area, cadastral number.
❖ The manner in which the current seller acquired the property - inheritance, purchase, donation.
❖ The price of the property for the current transaction, clearly specifying the payment method and the currency
in which it will be paid, expressed both in numbers and in words.
Pre-sale Purchase Agreement
There are situations where, before the actual signing of the sales and purchase contract, the parties agree to enter into a pre-sale purchase agreement. This functions as a written promise signed in front of a notary and ensures the transfer of ownership in the future, specifying a certain advance payment that the buyer makes now, as well as the price difference to be paid when the final contract is signed.
Seller's Obligations in the Real Estate Sales and Purchase Agreement
When selling a real estate property, there are certain aspects that need to be addressed concerning complete documentation and any associated debts. Additionally, it is essential to be aware of the costs that fall on us. More details can be found below.
Documents Required for Selling an Apartment
To sell an apartment you own, the following documents are required:
❖ Identity card for each of the owners - to ensure it is valid.
❖ Documents proving ownership of the apartment:
➔ Sales and purchase contract;
➔ Deed of donation;
➔ Divorce court decision;
➔ Title deed;
➔ cCertificate of inheritance obtained through succession at a notary and registered in the land register.
❖ Fiscal certificate - a document issued for each owner by the local Public Finance Administration, certifying that all obligations to the state regarding the apartment have been fulfilled.
❖ Cadastral documentation issued by the local Land Registry and Real Estate Advertising Office:
➔ Cadastre - contains the documents and measurements of the apartment related to sketches, plans, technical memorandum, registered with the Cadastre Office, to give the apartment a unique identifier in fiscal records, called a cadastral number.
➔ Land Register Entry - registration based on the cadastral number in the Land Register at the Land Registry and Real Estate Advertising Office, where land properties are described.
❖ Land book extract - a document issued by the Land Registry and Real Estate Advertising Office directly to the notary handling the apartment sale.
❖ Energy Performance Certificate - issued by energy auditors and valid for ten years from the date of issuance.
❖ Certificate issued by the apartment owners/tenants association - this serves as proof that the seller has no dues to the association for the specific apartment. It is valid for 14 days and must be issued and signed by the association's president and the building's administrator.
❖ The latest utility bills - showing that the seller is up to date on utility payments.
Additional Documents Required for Sales and Purchase by Legal Entities
If the seller is a company, the following additional documents will be required:
• The latest memorandum of association or articles of incorporation.
• Registration certificate issued by the Trade Register or an equivalent document.
• Valid certificate of registration issued by the Trade Register.
• Notarized power of attorney or a General Assembly decision for the legal entity's representative.
• General Assembly decision showing the agreement of all associates/shareholders of the company regarding the sale of the asset, as well as the approved sale price.
Taxes to be Paid by the Seller
When selling an apartment, the seller will be responsible for covering the costs associated with obtaining all the documents mentioned above. Additionally, they will need to pay the state tax and any potential commission charged by the real estate agency if such an intermediary was involved.
State Tax
The income tax owed by the seller of a property varies depending on the number of years they have owned the property, whether it's more or less than 3 years. A tax simulation for each case can be found below.
Tax Simulation
Scenario 1:
• Apartment Price: 85,000 euros (425,000 lei)
• Apartment owned for more than 3 years
Scenario 2:
• Apartment Price: 85,000 euros (425,000 lei)
• Apartment owned for less than 3 years
• Sales tax: 3% * 425,000 lei = 12,750 lei
Commission to the Real Estate Agency
The commission to the real estate agency is to be paid by the seller as long as they have used the agency's services and have signed a cooperation contract with the agency.
As long as the agency has handled the promotion of the apartment, viewings, discussions with potential buyers, and provided necessary information regarding the documentation, the commission that the seller must pay can vary between 3% and 6% of the property's value.
Notary Fees
Notary fees are the responsibility of the buyer. They vary based on the apartment's selling price, the payment method (through a government-backed loan, a mortgage, or direct payment), as well as the notary's fees.
Land Registration Fees
The buyer is also responsible for the land registration fee, which is charged by the National Agency for Cadastre and Land Registration (ANCPI). This fee is 0.15% and is applied to the purchase price in the sales and purchase contract. It is paid to the notary who will handle the registration on behalf of the new owner.
Fee Simulation
Situation 1 - Payment for the apartment without credit:
• Apartment Price: 85,000 euros
• Notary Fees: 929.4 euros (4,647 lei)
• Land Registration Fee: 125.8 euros (629 lei)
Situation 2 - Payment for the apartment through the "Noua Casa" credit - 30% reduction in notary fees:
• Apartment Price: 85,000 euros
• Notary Fees: 650.6 euros (3,253 lei)
• Land Registration Fee: 125.8 euros (629 lei)
Situation 3 - Payment for the apartment through a mortgage:
Real Estate Agency Commission
In the case of a real estate sales and purchase transaction involving an intermediary such as a real estate agency, both the seller and the buyer are responsible for paying the commission. This amount can range from 3% to 6% of the property's value.
Example:
- Apartment Price: 85,000 euros
- Agency Commission 5%: 4,250 euros (21,250 lei)
Model Sales and Purchase Agreement for an Apartment
Usually, the notary facilitating the sales and purchase agreement has a model contract they use. However, to be prepared and know what to expect, you can find a model contract here.
MODEL CONTRACT (IMOBILIARE.RO)
Frequently Asked Questions
Can the sale take place at a notary from a different location?
Yes, the sale of a property can be conducted at any public notary in Romania. There are no restrictions regarding the notary's location in relation to the property or the parties' domicile
When does the registration in the land register take place?
Registration is done after the construction of the property and is mandatory before concluding the sales and purchase contract.
Can a foreign citizen purchase a house with land in Romania?
Yes, citizens of the European Union and the European Economic Area can own land, apartments, or houses in Romania, as secondary residences, after obtaining a special code, called NIF, from the National Tax Administration Agency (ANAF). This code allows them to pay taxes and duties.
Vânzarea între soți este permisă de lege?
Da, în prezent legea permite acest lucru în țara noastră.
Can the sales and purchase agreement be canceled? How?
Yes, there are two options for cancellation:
⦁ By mutual agreement of the parties.
⦁ At the notary.
⦁ In court, only after a specialized lawyer can determine whether the contract is an absolute or relative nullity.
Estimated Price for an Apartment
When we desire to purchase a new apartment, it's essential to evaluate both our space needs and budget.
For a young family, a 2-room apartment is most suitable. It is ideal, providing enough space for two people while maintaining an intimate atmosphere, allowing for a balance between private and social spaces. Depending on the layout and area, prices for such apartments range between 117,900 Euros and 174,500 Euros, plus VAT.
If a child is already part of the family or there's a need for a dedicated workspace at home, a 3-room apartment is more appropriate. With this option, you can have a separate bedroom for the child or set up a home office, providing increased comfort in either case. Prices for 3-room apartments can go up to 201,500 Euros + VAT.
For a larger family with two children or if you require rooms for specific hobbies, you'll need to consider a larger 4-room apartment. This will provide ample space and room for guests without concerns. The average price for such apartments is around 251,900 Euros + VAT.
When, in addition to a living space, we desire our home to be truly exclusive, where we can feel truly exceptional, we have the option to choose a penthouse. Here, the terraces are quite large, and you can enjoy a superb panoramic view of the city where you live. The feeling is one of freedom and luxury, and in such an environment, you can't help but feel extraordinary. Prices for penthouses can range from around 443,500 Euros + VAT for a 185 sqm area to 1,320,500 Euros + VAT for 566 sqm.
Price variations are quite significant at present due to fluctuations in the construction materials market and the uncertain economic context. Of course, with many types of apartments, varying facilities, and different features, prices for the same number of rooms in theory can fluctuate quite a bit in practice, depending on the actual space, associated balconies or terraces, and the level of comfort you desire.