VAT on Residential Properties in 2024 – When Do You File Forms 5%, 9%, or 19%?

In accordance with Law 296/2023, the value of the reduced VAT rate for the purchase of a new housing for individuals will be 9% starting in 2024. This legislative change comes as part of a series of tax measures designed to stimulate the real estate market and support the public’s access to new housing.

This article provides all the essential information about the new VAT regulations for housing, detailing the situations in which the reduced VAT rate of 9% applies, the standard 19% VAT rate, and explaining how buyers can continue to benefit from the reduced 5% VAT rate.

Here you can see the apartments in GREENFIELD Băneasa that qualify for 9% VAT and 19% – See the apartments

Conditions for VAT on housing 2024

Individuals who wish to purchase a home may qualify for the reduced VAT rate of 9%, provided they meet the following criteria:

1. Purchase priceThe residence must not exceed 600,000 lei, excluding VAT.
2. Usable areaThe dwelling must have a usable area of no more than 120 sq m, excluding utility outbuildings.
3. First purchase with reduced VATThe beneficiary must not have previously purchased a home with reduced VAT.

Clarifications Regarding VAT Conditions for Residential Properties 9%

There are a few important points regarding the application of the reduced 9% VAT rate that are worth mentioning:

• For individuals: The 9% rate applies exclusively to individuals. Transactions between legal entities are subject to a 19% VAT rate, regardless of the circumstances.
• Built-up areaDo not consider the total built area. If the usable area is less than 120 sqm, the reduced rate applies even if the total built area exceeds this threshold.
• Purchase from legal entities: VAT applies only to the purchase of new homes from developers or private contractors (legal entities). If the home is less than three years old and meets the other conditions, the 9% rate applies. Otherwise, the standard rate of 19% applies.

How can you take advantage of the 5% VAT rate for residential properties in 2024?

You are eligible for a 5% VAT rate if you signed a preliminary sales agreement in 2023, with an advance payment for a property that does not exceed 600,000 lei and 120 square meters of usable floor space, and the property is delivered in 2024.

If the sales agreements were signed before 2023 but are finalized in 2024, a 9% VAT rate applies, provided that the other conditions are met.

When is 19% VAT due on real estate?

The standard VAT rate in Romania is 19%. This applies to residential properties that do not meet the conditions for the reduced rate of 9%, including:

• High valueHousing exceeding 600,000 lei, excluding VAT.
• Large areaResidences with a usable area greater than 120 sqm.
• Second reduced VAT purchaseIndividuals who previously benefited from reduced VAT on a purchase.

Differences Between Real Estate VAT in 2024 and 2023

The main change for 2024 is the increase in the reduced VAT rate from 5% to 9%. This increase could have a more significant impact on people buying homes to live in, compared to real estate investors. Otherwise, the conditions remain unchanged: the maximum value and maximum usable area are the same.

How much VAT do you pay for apartments in GREENFIELD Băneasa?

At GREENFIELD Băneasa, you’ll find apartments with a VAT rate of 9% as well as apartments with a VAT rate of 19%. Below, we’ll detail the exact VAT rates for each available apartment.

• Studio 62 mp – VAT rate 9%
• 69 sqm studio apartment – VAT rate 9%
• 2 room apartment, 76 sqm – VAT rate 9%
• 2-room apartment, 73 sqm – VAT rate 9%
• 2-room apartment, open space, 79 sqm – VAT rate 19%
• 2-room apartment, 79 sqm – VAT rate 19%
• 2-room apartment, 73 sqm, with garden – VAT rate 19%
• 2-room apartment, 88 sqm – VAT rate 19%
• 2-bedroom apartment, 84 square meters, with a garden – VAT rate 19%
• 3-room apartment, 98 sqm – VAT rate 19%
• 3-room Open Space Apartment, 98 sqm – VAT rate 19%
• 3-room apartment, 108 sqm – VAT rate 19%
• 3-room apartment, open space, 108 sqm – VAT rate 19%
• 3-room apartment, Open Space, 103 sqm – VAT rate 19%
• 3-room apartment, 104 sqm – VAT rate 19%
• 3-room apartment 99 sqm, with garden – VAT rate 19%
• 2-room apartment with terrace, 142 sqm – SPECIAL TYPE – VAT rate 19%
• 3-room apartment with terrace, 160 sqm - SPECIAL TYPE – VAT rate 19%
• 3-room apartment with terrace, 203 sqm - SPECIAL TYPE – VAT rate 19%

In conclusion, Law 296/2023 introduces significant changes regarding VAT rates for the purchase of new homes. The reduced rate of 9% applies under certain strict conditions, offering savings opportunities for individuals. However, it is very important to be well-informed and to plan your purchase carefully in order to take advantage of these tax benefits.