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Can a Foreigner Own a Property in Romania

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business man and house

If you are a foreigner and you want to buy property in Romania, you need to find out what rights and obligations you have. Although the Romanian Real Estate market is flourishing, it might be tricky to have your own place, depending on your citizenship.

Starting from 2012, citizens from EU and EEA can obtain a place to live in Romania in the same way as any Romanian citizen. They can buy, receive it as a donation, make an exchange or inherit it (but not by legal will). However, regardless of how they got the property and what kind of property it is, it can only serve as a secondary residence. Also, from the beginning of 2014, EU and EEA citizens can obtain, in any way, agricultural lands, forests and forest lands.

In the case when the foreign citizen wants to buy any property in Romania without a Romanian Personal Identification Number, a Fiscal Identification Number is Necessary. The PIN can be obtained easily by the foreigners who have a residence permit in Romania, either for study, business, research or as a family member. Apart from this, there is nothing special required from a foreigner citizen for the transaction; he can buy or sell in the same way as a Romanian citizen, and he will pay the same taxes for the government, seller and notary.

For the citizens who are coming from countries outside the EU or EEA, things are more complicated. In most cases, they can only have the right to own the construction, but not the land itself. There are a few countries that have a special agreement with Romania regarding this issue, but most of them don’t.

For example, a citizen outside the above mentioned areas can not own a land and the house that is built on it. He can obtain the right to use the house and the land, but only as long as the house exists on the land. In the moment the construction is no longer there, his legal rights over the land stop. The same rule applies regardless the type of construction or land that he wants to buy.

The laws stated above only apply to natural persons. For commercial enterprises, the entire process tends to be easier. According to the law, they can obtain easily the right to own, buy, sell or use different types of properties, as long as the properties are necessary for their activity. There are, on the other hand, some risks when it comes to owning a property in Romania in the case when the activity of the enterprise stops, so a lawyer should be consulted.

Citizens of any country who want to buy a property in Romania and obtain a business Residency Permit, need to apply first for a Business Visa and to prove that they are planning to start a commercial activity on the territory of the country. They can submit their documents in their own country, at the Embassy of Romania. Once they obtain the Visa, they can apply for a Residency Permit in Romania at any Immigration Office.

Before starting a transaction with any kind of property in Romania, it is recommended to discuss with a lawyer and understand what are your rights and obligations through the entire process. Also, If you do not have a Residency Permit in Romania, make sure you follow all the legal steps to obtain a Fiscal Identification Number before you attempt to buy a property. Otherwise, any contract you sign is invalid and you can easily get trapped in a legal situation.

Necessary Documents for Buying or Selling Apartment in Romania

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stack of paper documents and files

In the past few decades, Romania has become a hub for foreigners who want to purchase a house or an apartment in the midst of the beautiful Romanian capital. However, many are afraid of the famous bureaucratic system of Romania that they will have to go through in the process of buying or selling an apartment in this country. At the same time, many are afraid of the language barrier that may exist when trying to understand what documents they need to submit in order for the transaction to be legal. In order to help you get an idea of the documents you will need and to save you a lot of time and money, we comprised a list of all the steps you must take and the documents you will need to have when buying or selling an apartment in Romania. Without further ado, here they are:

  1. Deciding on a price for the apartment

If you are selling an apartment, decide on a reasonable price to attract customers, but also make sure you make a profit. In recent years, average price for an apartment increased by 10-20 percent. The key is analyzing the market and understanding the price that others are selling their apartments for.

  1. The paperwork needed

Here comes the ”fun” part. There are many documents you will need to have with you or obtain from various Romanian institutions. Here they are, listed:

  • Your ID card, both a copy, as well as the original;
  • The marriage certificate or the divorce sentencing, both a copy as well as the original;
  • The documents that show that you own the apartment. Here we can count a contract of sale, an order from the court, a donation contract and so on;
  • The cadastral plan and the real estate registration in the real estate registry (Cadastru);
  • Real estate register excerpt that shows how many properties you have in your name, including the apartment you are currently trying to sell. This excerpt is given to you by the notary which will validate your sales contract from the Cadastral Office and it is valid for 5 days after the notary applied to receive it;
  • A fiscal certificate which is released by the Office of Local Taxes from the county or sector where your apartment is located. This certificate is valid for 30 days after it was released;
  • If your apartment is located in a block of flats, then you will also need a certificate from the association of all those living in the block of flats. This certificate essentially confirms the fact that you paid all your bills on time and that the new owner will not be forced to pay some of your previous bills;
  • The last document you will need is a document that attests the energetic performance of the building where your apartment is located. In order to do this, you must talk to an expert in this field who will then analyze the apartment and issue a document that will attest the energetic performance of the building and where he or she will also recommend various ways of improving this performance and of saving money on the bills;
  1. Settling on a price and signing the pre-contract

After you gathered all the documents listed above and after finding a buyer, you must settle on a price and sign the pre-contract. The pre-contract is basically a document signed by both parties where they agree on:

  • The money sum that will later be paid by the buyer to the seller;
  • The manner in which the money sum will be transferred from one party to the other;
  • The date when the official contract will be signed;
  • The date when the seller will leave the apartment and the buyer can move on;
  • The advance sum that the buyer must pay for the apartment;

Make sure you sign the pre-contract in the presence of a public notary and do not hand over the original papers to the buyer! Never trust a person with your original documents on the apartment. They are very hard to gather them all after that, not to mention very time consuming and expensive.

So there you have it, these are the main documents that you need to have with you if you plan to sell your apartment. Likewise, if you want to buy an apartment, makes sure you ask the seller to provide you will all of these because each document has its own purpose and you don’t want to wake up with surprises down the road.

The Most Expensive Apartment in Bucharest

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contemporary design of penthouse main room

Although most investors perceive Bucharest as cheap, the city does have its luxury properties. The current most expensive apartment in Bucharest costs a whopping $3,800,000 and can make even the most exuberant buyer blink.

The apartment is located on the 4th floor of a 5-floor building and includes 7 rooms and 5 bathrooms. A total living area of 450 m2 is more than generous given the fact that typical block apartments rarely manage to go past 100 m2. The penthouse is fully furnished with the best materials, and the price reflects that no compromises were made here. The offer also includes 3 parking spaces. Because it was built in 2011, the structure is in line with more recent building codes and offers a guarantee of safety and reliability.

There is no surprise that the most expensive real estate intended for a single family is located in the Primăverii Neighborhood, in the northern part of the city. The area managed to build quite a reputation for itself and accounts for an important percentage of the total price. Primăverii was established as a retreat for the wealthy and privileged since Communist times. Even now, the elite of the Romanian society can be found here. Entrepreneurs, specialists or even showbiz personalities appreciate the advantages offered by the neighborhood. A quick stroll through Primăverii makes most think of prime residential areas from cities like Berlin or Vienna.

Located on a small peninsula that protrudes in Floreasca Lake, the property offers a magnificent view of Bordei Park and is minutes away from Bucharest’s biggest park, Herăstrău. However, a quick tour of the horizon can confuse the ones not familiar with the cityscape. Because all of the adjacent properties have generous green spaces, the building appears to be a “relic” of urban development surrounded by green. Primăverii is an oasis of tranquility that has nothing to do with the noise, pollution, and overall commotion that is characteristic to the vast majority of other areas. The low density of constructions, as well as the small height regime highlights that quality reigned over quantity here.

The apartment is clearly not for those that like to depend on the public transportation system. The 12-minute walk separating it from the nearest metro station and the absence of nearby bus stations come as advantages. The street is closed to non-residents. However, the location offers a quick gateway from the city because of its north position.

Selling the most expensive apartment in Bucharest was a job left at the hands of Coldwell Bankers. As of February 2017, the property is still available for sale, and given the growing demand felt on the market, the price will most likely see a steady rise in the future.

Vacant Lots Grow In Popularity As Prices Stay Stable

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While the real estate market has been stagnant for the last couple of years with little to no action being registered, 2014 brought a huge change in the market with 2015 leading the way to more development. While condominium sales have had a small yet steady rise since the end of the financial crisis, land sales have plummeted, with little demand for residential or industrial properties being the main reason.

A recent analysis on the state of real-estate industry has shown that the past two years have seen a resurgence of vacant lots demand; suitable for condo or individual home builds. The study tracked online searches for vacant lots as well as price oscillations in the past 12 months for lots found at the edges of Romania’s big cities.

Demand for this market segment grew as a whole with prices remaining pretty much stable, the only exception being noticed for medium priced lots which registered modest growth.

At the edge of most of Romania’s major cities land price is generally under 50 euros per square meter. The price goes for lots outside Bucharest as well which was known to have a significantly more expensive market than the rest of the country.

Iasi, one of the largest cities in the country after Bucharest and the largest in the historic region of Moldova has registered the most significant growth in terms of online popularity for vacant lots since the spring of 2014. The number of online searches has grown by a whopping 183 percent even though actual demand is still rather low. Prices have varied by only 1 percent with the smallest asking price per square meter being found in the Popas Pacurari area at 8 euros per square meter.

Vacant lots in Bucharest and its surroundings have registered on online growth of 79 percent in the last year, being the second in terms of growth. Demand has also grown by a significant amount, being the largest in the country in the country with 78 percentage points larger than the following city, Brasov. Prices have stayed pretty much the same with an increase of just 2 percent. Prices start from 45 euros per square meter on lots 900 square meters in size located in the Militari-Chiajna neighborhoods.

In Brasov, one of the major tourist hotspots in the country demand stayed relatively low at 18 percent while online searches grew to the second spot after Bucharest. Brasov was the only market where prices went down with a decrease of approximately 11 percent.

Best Bucharest Neighborhoods Property Value

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A good neighborhood doesn’t just improve the day to day life of its inhabitants but also guarantees that their property will maintain its market value or even increase it. It also guarantees that said property can be sold for a profit, regardless of market conditions or demand levels.
Despite popular belief, a good neighborhood isn’t necessarily a centrally located one or an exclusive and detached one either. A good neighborhood can be called that when it has shown consistent good value for sellers, better than median value, regardless of market conditions.
The time-old real-estate saying “Location, location, location” is as accurate as ever and is certainly the motto that most successful investors follow when buying property, be it in the form of apartments, houses or land. While price is also an important factor, a good price in a bad area can quickly lead to a failed project or reduced profits in the long run.
Real estate experts say that while price is the most important aspect for customers, they should consider the state and location of the property equally important. Even the communist neighborhoods can be considered premium if they can compensate the quality of the architecture with other factors such as parks, good schools, safety and good infrastructure. A good neighborhood isn’t necessarily an exclusive one, or one dedicated to high net worth individuals. Certain communist built neighborhoods registered great transaction rates even during the toughest period of the financial crisis.
Real estate agents generally give the 1 Mai to Mihalache Bulevard example which mixes older buildings with communist condominiums. The good mix of middle and upper class inhabitants, numerous parks, good accessibility to the center of Bucharest as well as numerous public transport routes make it a great investment. The fact that apartments have been sold even during the toughest years of the financial crisis in the area is also an argument that real-estate agents frequently mention to potential buyers. Numerous other sectors and regions in the city have reduced prices and still haven’t managed to sell during low market conditions due to low demand; this is not the case for the 1 Mai – Mihalache Boulevard zone.
Newly built residential areas are controversial as some lack the quality of life, commercial diversity or infrastructure and proximity to the city-center that older neighborhoods have. This isn’t always the case as some projects have grown into well-developed neighborhoods which thrive on the larger and newer look of their buildings.

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