[BUYING AND SELLING REAL ESTATE IN ROMANIA]
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are special VAT percentages in some cases (e.g., starting on 1 January 2023 – 5% for a natural - person buyer individually or together with other natural person of a property under Euro 120,000, and with a surface of a maximum 120 m 2 , provided that the property is fully constructed – the buyer can immediately move in and only for the first acquisition). Nevertheless, if both the seller and the buyer are registered for VAT purposes, VAT is not effectively paid as the reverse charge mechanism is applied. B. Share deals: Related taxes If the shares are sold at their nominal value, no special taxes shall be imposed. However, if the shares are sold at a price higher than their nominal value, the seller shall pay profit/revenue taxes on the difference between the nominal value and the value of the transaction. Also, certain fees must be paid to register the transfer of the shares with the Trade Registry (approximately EUR 200). IX. Examinations Before Closing The buyer should make the relevant examinations in order to determine any deficiencies in the property right or in the property itself. Pursuant to Romanian law, a legal conclusion on whether there is a valid title to certain real estate may be given only after examination of the whole chain of transfers in respect of the particular real estate. There is no rule under Romanian law that the last registered owner of the real estate is its true owner/holder. The registered owner is only presumed to own a valid title until proven otherwise by an interested person. If any of the current
owner’s/holder’s predecessors’ rights over particular real estate suffer from any defect in title, such defect survives the subsequent right transfer and affects the right of the current owner/holder. Thus, under Romanian law, if the ownership title over real estate is cancelled, all subsequent acts of the ownership transfers might also be cancelled by Romanian courts, at the request of interested persons. Cancellation of the subsequent acts may be requested at any time, no statute of limitations is provided by Romanian law in such cases, in consideration of the fact that property right is guaranteed under the Romanian Constitution. Nevertheless, according to the Land Book Law, if no deficiency arises from the analysis of the relevant Land Book, a third party may no longer be deregistered after three years from the moment the last owner was registered in the Land Book. This provision is applicable only if the third party is at least the third owner registered for that particular Land Book – i.e., if the Land Book is newly opened, this should not apply, and the third party may be deregistered at any time. Consequently, in practice, as the safeguarding of concluded transactions is preferred, it becomes more difficult to amend the content of the Land Book and implicitly, to challenge the ownership title once the aforementioned conditions are met. The seller should disclose any relevant hidden defects in the property itself or in the property rights. If the buyer intends to build on the land, verifications should be made in order to assess the existence of restrictions on building in that area (general, zonal, and
ILN Real Estate Group – Buying and Selling Real Estate Series
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