Local administrations in Romania have sharply increased property and motor vehicle taxes, in some cases by rates well above those indicated by the government (around 70%), according to media reports, triggering public debate over the scale of the hikes.
The increases followed a decision by the government to raise the upper limits of recommended local taxation bands. This allowed municipalities that had previously levied taxes closer to the lower thresholds to boost revenues substantially, in some cases by more than 100%, while arguing that the additional income should remain entirely in local budgets, Ziarul Financiar reported.
In several localities, the rise in property taxation was further amplified by the elimination of tax reductions previously granted for historic buildings, the publication said, adding to the burden on owners.
The government estimates that the higher property taxes will generate additional revenues of RON 3.7 billion (EUR 700 million) in 2026, an increase of more than 30% compared to 2025. While all proceeds will formally remain with local administrations, the central government plans to reduce transfers to municipalities by equivalent amounts, effectively neutralising the impact on the consolidated budget.
Prime minister Ilie Bolojan defended the measure amid criticism over the scale of the increases, arguing that property taxation in Romania remains significantly below the European Union average. He also pointed to weak collection rates in some areas as a justification for the reform.
According to government data cited by Ziarul Financiar, Romania collects only 0.55% of GDP from property taxes, compared with an EU average of 1.85%. The prime minister said this gap highlights both the low level of taxation and inefficiencies in enforcement.
Increasing revenues from property taxation is also a formal milestone under Romania’s National Recovery and Resilience Plan, Bolojan reportedly said, linking the reform to commitments made to the European Commission. The daily noted that disparities between localities were substantial, with tax levels and collection rates varying widely across the country.
Approximately one-third of assessed property taxes are not collected in some jurisdictions, according to the publication, a factor that authorities say undermines local budgets and limits funding for public services.
iulian@romania-insider.com
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