2016 Housing Tax and Duty Guide in Bucharest

With the New Fiscal Code, significant changes regarding property taxes and duties have come into effect. The provisions will apply from the first day of next year, but local councils should have already prepared the taxation levels. According to the law, this should have happened as early as the first part of November. In practice, however, the tax and duty directorates in Bucharest cannot provide this information even by mid-December. IMOPEDIA.ro has compiled a guide to taxes and duties for the year 2016, addressed to those who want to know exactly what they have to pay, by when, and in what amount.

Derogations and payment exemptions

Since September 10, with the publication of the New Fiscal Code in the Official Gazette, local councils had a 60-day deadline to establish, through a resolution, the levels of local taxes and duties for 2016. Those most interested in this are particularly those who have registered offices in residential properties, given that increases of up to 250% are foreseen for this category of owners (Details here). So far, however, the tax and duty directorates cannot clarify matters for taxpayers.

„The norms have not arrived, we do not know when they will appear, and until then we cannot provide any information related to the 2016 taxes and duties. For indicative calculations, we can take this year’s grid and present a lower and an upper limit, depending on the Fiscal Code norms, but we would only complicate things for the taxpayer with information that could be misleading,” officials from the Sector 1 Tax and Duty Directorate explained for IMOPEDIA.ro.

Methodological norms have not yet appeared, but the new taxation grid must be functional from the first day of 2016

While no one can guarantee when the methodological norms might appear, they should be functional from the first day of next year (Details here). Nevertheless, state officials urge patience, assuring payers that it is still too early to pay the dues.

„There is time until the end of March next year for advance payments. Those who pay by then receive a 10% bonus; there is no rush, we will talk about 2016 in 2016. Those who cannot physically come to the counter to pay their dues, such as those leaving the country, can make these payments online, provided they submit a written request at any of the tax and duty directorate offices,” officials from the Sector 5 Tax and Duty Directorate explained for IMOPEDIA.ro.

Local councils and city halls are allowed to exceed the maximum permitted taxation limit by up to 50%

In 2016, local councils and city halls are permitted by law to exceed the maximum taxation limit allowed by law by up to 50%, thus reaching values up to 20 times higher than at present. In Bucharest, the lowest taxes for residential buildings are maintained (Details here), but an increase of 250% is expected for non-residential buildings, specifically those housing legal entities or Sole Proprietorships (PFA) (Details here). Individuals who, as of December 31, 2015, own non-residential buildings or mixed-use buildings (Details here), are required to submit declarations by March 31, 2016, inclusive.

„Multiple operations related to taxation and duties can be done on the internet; taxpayers are asked to inquire about this option which could save time and energy,” explained officials from the Sector 2 Tax and Duty Directorate for IMOPEDIA.ro.

The building tax is paid annually, in two equal installments, by March 31 and September 30, inclusive. Another change consists of the fact that, from 2016, taxes and duties will be indexed annually, by April 30, not once every three years, according to the current rule. When establishing the applicable taxes and duties, local councils must take the inflation rate into account, and the indexed amounts will be approved by a resolution of the local council or the General Council of the Municipality of Bucharest, in the case of the Capital. Certain categories of taxpayers benefit from preferential treatment, exemptions, or payment derogations (Details here).