[BUYING AND SELLING REAL ESTATE IN ROMANIA]
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according to Law 175/2020 which entered into force on 13 October 2020, the company who owns, outside city limits, lands, and which sells enough shares to ensure control over the company, shall pay a tax of 80% applied to the positive difference between the value of the agricultural lands from the date of sale and that from the date of purchase, determined according to the indicative value established by the expertise made by the chamber of notaries public or to the minimum value established by the market study carried out by the chambers of notaries public, as the case may be, from the respective period. This rule is also applicable if the sale of the control package takes place before the anniversary of 8 years since the acquisition of such lands and if such lands are more than 25% of the company’s assets. This tax is an additional tax to the ones due in consideration of the Fiscal Code, moreover, this tax is not considered a deductible expense when calculating the tax on profit. B. Residential Property The most frequent forms of ownership of residential property are: 1. Sole ownership : The owner is the only person authorized to control and dispose of the land in question. 2. Common ownership : More than one owner over the property; there are two types: (a) joint ownership (ownership by two or more persons
holding – undetermined – shares over the property – such as ownership by spouses); no deed may be concluded without the consent of the other co-owner. (b) co-ownership (ownership by undivided two or more persons holding determined shares over the property) which, in turn, can be ordinary co-ownership (e.g., two buyers acquire 50% each of a property) or forced co-ownership (e.g., forced co-ownership of the owners of apartments in a building over the common parts of a building – stairs, lobby, elevator, rooftop, etc.) – deeds may be concluded by each co-owner for its share of the property.
C. Commercial Property Owners of commercial property are most frequently legal entities. The most commonly used entities under Romanian law are joint-stock companies (SA) and limited liability companies (SRL). i. Limited Liability Company – SRL 1. Legal Entity SRLs are the most commonly used vehicles.
An SRL is managed by directors who act under the control of the general meeting of shareholders. Shareholders may also be appointed as directors.
ILN Real Estate Group – Buying and Selling Real Estate Series
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