Romania has one of the lowest levels of property taxation in the European Union, with annual payments averaging under EUR 100 per person – more than seven times below the EU average, real estate consultancy Cushman & Wakefield Echinox said in an analysis based on Eurostat data.
The study found that Romania collects property tax revenues equal to just 0.5% of its GDP, compared with an EU average of 1.9%. France leads the bloc, with real estate taxes accounting for 3.7% of GDP. By comparison, the ratio is 1.4% in Poland and 0.8% in Hungary.
“Romania’s share of GDP from property taxes decreased from 0.9% to 0.5% over the last decade, as the GDP growth rate has been significantly higher than the corresponding one from property taxes,” Cushman & Wakefield Echinox said. “Additionally, the taxable values have remained relatively constant since 2016 and have not kept up with the real estate assets price surges, thereby diminishing the share of these revenues in GDP.”
In absolute terms, Romania collected EUR 1.8 billion in property tax revenues in 2023, well below Poland (EUR 10.7 billion), Spain (EUR 38 billion), Italy (EUR 45.3 billion), Germany (EUR 40 billion), and France – where property tax revenues exceed EUR 100 billion annually.
On a per capita basis, Romanians pay an average of EUR 93 annually in property taxes, far below the EU average of EUR 710 and dramatically less than the EUR 1,550 paid in France. Italians and Spaniards each contribute over EUR 750, while Poles pay about EUR 300 and Hungarians EUR 163, the same report said.
Vlad Săftoiu, Head of Research at Cushman & Wakefield Echinox, commented: “Romania’s low level of property taxation represents an important competitive advantage which has significantly supported its real estate market development, while also facilitating access to residential properties, contributing to Romania’s position as the country with the highest home-ownership rate in the European Union. On the other hand, the relaxed taxation translates into limited funds available for public investment, considering that these taxes are predominantly collected by local authorities.”
Property taxes account for just 2.1% of Romania’s total fiscal revenues, compared with the EU average of 4.7%. In France, the figure reaches 8.4%, while in Greece it is 7% and in Spain 6.7%.
Property taxes include taxes imposed on owners of real estate assets – buildings and land – in the form of annual taxes (local taxes on buildings and land) or ad-hoc charges (transfer taxes, inheritance taxes, etc.), the company explained.
Tax rates in Romania remain among the lowest in the bloc, with residential property taxed at 0.1%–0.3% depending on category and location, and commercial properties facing rates between 0.5% and 1.5%.
irina.marica@romania-insider.com
(Photo source: Andrey Popov/Dreamstime.com)
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