The Romanian Government has decided to increase the benchmark price per square meter used to calculate the taxes on buildings by 50% starting next year, Prime Minister Nicolae Ciuca said.
Romania has some of the lowest property taxes in the European Union and was under pressure from the EU and the International Monetary Fund to align property taxes to market rates and increase budget revenues.
Local authorities set, collect and spend the tax revenues. They have the leeway to decide on a property tax of between 0.8% and 2% of the value calculated based on the benchmark value, the prime minister said.
Increasing property taxes is part of the fiscal package passed by the government earlier this year, aimed at increasing revenues.
There disagreement within the coalition on plans to calculate taxes based on the benchmark prices of properties set by notaries as well as technical difficulties. As a compromise, the government agreed to a flat 50% hike.
„There was a political agreement for this decision to be postponed. We introduced for a flat 50% increase instead,” Mr Ciuca said.
A 3rd floor apartment built in 1950 of about 100 square meters in a good area of Bucharest, which had an annual property tax of 200 lei a year, will rise to 300 lei in 2023, Hotnews reported.
A 200-square meter house on 800 meters of land on the outskirts of the northwest city of Cluj, which had a tax rate of 958 this year, will go up to 1,437 lei next year with the increase.