The Govern is Merciful with the Owners of Multiple Homes

The Govern decided to be more merciful with the owners of multiple homes. Until now, the property taxation system formula was raising the property tax by up to 300% for a third property. The citizens who own multiple homes will no longer be taxed additionally, according to the new Fiscal Code of Romania. The stipulation comes into effect next year. Until now, the private entities who own two or more homes were paying 65% larger tax for the second property (except the home address), 150% more for a second extra property and 300% more for the third or more extra properties. The latest draft of the Fiscal Code is stipulating that this over-taxation will be eliminated, and the Govern has a simple explanation for this decision: the additional taxing of the private entities who own several properties can be considered “unfair” by the taxpayers and also generated lots of “administrative problems” on local level.

On the other hand, the Govern is amending also the calculation method for the property taxes on the buildings owned by companies, and the tax will be calculated strictly according to the value of the building resulted from a valuation report, similar to the market value. This means that the property tax for companies will increase. At this moment, the juridical entities pay a property tax for buildings calculated according to the accountancy value of that facility, meaning the patrimony value of the building registered in the company accountancy. The explanation for this change is the fact that the accountancy value of the buildings can be significantly different from the real value of the same building. Starting next year, for the residential buildings owned by companies, the property tax will represent 0.1% of the taxable value of the building, and for non-residential buildings, the tax will range from 0.25% to 1.50% of the taxable value of the building, calculated based on a valuation report made by an authorized valuation agent. The local council establishes the exact quota of the contribution.

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