If you’re a foreign citizen looking to buy an apartment in Romania you need to understand how the laws concerning property ownership work and what is the procedure to follow. Whether you’re using a real estate agency or not, do keep in mind that all contracts regarding buying or selling a property need to be authenticated by a notary public in order to be legally valid.
Here are the steps to buying an apartment in Romania.
1) If you’re not a Romanian citizen, you must obtain tax registration number NIF
Any foreigner is allowed to buy an apartment or house in Romania, but things are easier for EU citizens, who can also own land in Romania.
A real estate transaction involves paying a number of taxes. In order to do so, a foreign citizen must obtain a tax registration number, called NIF. This is the equivalent of TIN, or tax identification number, used in other countries. Romanian citizens do not have a tax identification number, but use their personal numeric code (assigned at birth) for tax purposes.
If you’re an EU citizen, you can obtain a registration certificate for residence in Romania. When you get your residency permit you will be assigned a personal identification number (CNP). You will be able to use your CNP to pay taxes instead of NIF.
Non-EU citizens have to get their NIF before doing a real estate transaction. You can obtain a NIF from the local tax office (ANAF), either in person or by using a proxy. You or your proxy will be asked to fill in the so-called Form 30. As for documents, you will be required to submit your passport and your proxy’s ID, both in copy. If you choose to use a proxy, they will have to present a notarized power of attorney. You can send the documents by post, but it is advisable that you go in person, or send your proxy to the ANAF offices.
Keep in mind that obtaining your NIF takes up to 21 days. Any errors in the Form 30 or any missing document will cause a delay in obtaining your NIF so purchasing an apartment in Romania will take even longer.
If you find this confusing, it might be best to get yourself a lawyer, preferably someone specialized in due diligence, as they will be able to help you through the whole process.
2) Find a trusted real estate agent
If you’ve been living in Romania for some time or know people here, you might find an apartment to buy on your own. However, most foreigners relocating to Romania use a real estate agency. When dealing with a real estate agent, make sure they are reliable.
First of all, check that they work with a reputable agency. Ask them how long they’ve been doing business in that town or specific area. Ask them what type of services they provide and if they can help with all the legal steps.
Don’t forget to ask about the commission they use. Most real estate agencies take 3% commission. When you sign a contract with a real estate agent, have them put in writing what commission you owe them as a buyer. Usually, the commission is paid on the day the sale/purchase is signed.
3) Find and close the deal for a property you like
Take your time to see as many properties as possible. Some people prefer to buy new or recently refurbished properties, while others are interested in getting an older property and renovating it to their liking. Properties that need renovating will sell for less money, but do inquire about the costs of refurbishing said property to see if it’s a good deal.
4) Sign pre-contract and fix the date when the final purchase agreement will be signed
In Romania, it is customary to meet with the seller and draw a pre-contract. By signing this document, the owner agrees to sell the apartment to you by a certain date, which should be clearly written in the pre-contract. You will be asked to pay a certain sum, usually 10% of the agreed price. Make sure that the pre-contract stipulates you will get your money back (with added penalties) if the transaction is not completed by the agreed date due to seller’s fault. The pre-contract will be authenticated by a notary public, but it might be a good idea to have your lawyer present to review the document.
5) Get property documents from the seller and have them verified
In order to make a real estate transaction, the owner of the property must present certain documents. Have a lawyer or a notary public examine these documents to make sure everything is in order. Here are the documents the seller must present:
- Identity documents (ID card or passport (original plus copy). Marriage certificate or divorce papers, if applicable.
- Documents attesting ownership of the apartment, house or building you’re buying. Such documents include sale / purchase contract, a donation contract, heir certificate if the property was inherited, title of ownership or a final and irrevocable civil decision through which they were granted ownership of that property.
- Fiscal certificate on behalf of the owner, which must be issued by the local Financial Administration. This certificate proves the seller has paid their due taxes for the current fiscal year and is valid for 30 days.
- The cadastral documentation of the property. This document is drawn up by an authorized cadastral expert and includes the property’s plan as well as the location plan.
- Land registry certificate. It is the notary public that asks for this certificate, which is valid for 5 days, during which the sales contract must be signed.
- Energy performance certificate, issued by a certified energy auditor;
- For apartments, the owners or tenants association must issue a certificate showing the seller is up to date with their maintenance and repairs payments. If not, you can agree to take over the unpaid debts as your own.
- Last invoice and receipt regarding utilities payments.
6) Sign the final purchase agreement at the notary office
Once all the documents are in order, both buyer and seller go to the notary public’s office. The notary public will go over the documents before they can be signed. The notary public will also witness the payment. In Romania, the maximum sum you are allowed to pay in cash is 9,500 Euro, so in most real estate transactions payments are made by bank transfer.
The buyer is the one who pays the notary fees and the registration tax, usually 1,2% of the property’s value.
7) Get your land registry document
The notary public will see to it that the ownership transfer is registered with the land registry. This might take 2 or 3 weeks after the transaction went through. Once the formalities are done the notary public will give you the land registry document with your name on it, which proves that the property is now registered to your name.
8) Register the apartment at the City Hall
As the new owner of the apartments, you must go to the City Hall, to the financial administration to be more specific, to obtain the fiscal role, also known as ROL. Basically, it is a formality meant to update the name of the person that owes taxes for a certain property. The documents needed to change the ROL, include your ID, the contract of sale/purchase, and a copy of the property plan. You have 30 days from the date the contract was signed to change the ROL to your name. Failure to do so might incur a small fine.
9) Change utilities contract
As the new owner, you need to transfer all the utilities contracts (gas, electricity, Internet and TV, etc) to your name. Technically, there is no rush to do that, but it might create troubles for you, especially if you need to report a problem and it turns out you don’t actually have a contract with the utility provider.
Use the opportunity to review the contracts and change the terms according to your needs.
10) Make mandatory insurance and optional insurance policies
According to the law, all property owners in Romania must take out an insurance policy against natural disasters. This refers to damage caused by earthquakes, landslides and flooding due to natural causes. The price of the mandatory insurance is 20 Euro. With such an insurance, you are entitled to receive damages of up to 20,000 Euro, which might not be enough to cover the expenses if your apartment is completely destroyed.
You have the option to take out an optional insurance policy, covering other types of damages and raising the sum you are entitled to. Check out the offers of the major insurance agencies operating on the Romanian market.