In brief
Buying a property in Romania does not in itself require filing a capital declaration. A declaration is filed only when the assessing officer sends a demand under section 135 of the Income Tax Ordinance. If a demand arrives, the property is entered on Form 1219 at actual cost, including expenses and improvements, with each payment in euros converted into shekels at the representative rate on the day of payment.
Key takeaways
- 1There is no obligation to file a capital declaration on your own initiative because you bought a property. Filing is made only upon a demand from the Israel Tax Authority.
- 2On Form 1219 you enter what you actually paid, including the purchase expenses and the improvements, and not the market value.
- 3Every payment in foreign currency is converted into shekels at the Bank of Israel representative rate on the day it was paid.
- 4You file within 120 days of the date of the demand or of the date for which the declaration was requested, whichever is later.
- 5From 1 January 2027 filing will be online under section 135(1)(a1) of the Ordinance.
Israeli buyers of a property in Romania often ask whether the purchase "sets off a warning light" at the Israel Tax Authority and obliges them to file a capital declaration. The answer has two parts: the obligation itself depends on a demand from the assessing officer, but preparation should begin on the day you transfer the first payment.
This guide deals with the legal and practical side: what the law provides, what a property in Romania looks like within the declaration form, and which documents will save you a search going back years. The way items are classified in your own declaration should be determined with an accountant or tax adviser.
Does buying a property in Romania require filing a capital declaration?
Not automatically. Section 135(1) of the Income Tax Ordinance empowers the assessing officer to demand a statement of the capital and assets of a person, of their spouse and of their children. According to the Israel Tax Authority service page, whoever has received a demand must file. There is no form that you file on your own initiative because of a purchase.
A spouse may file a separate declaration, under conditions set by law. The declaration also covers children who have not yet reached 18.
On Form 1219 you enter what you actually paid, including the purchase expenses and the improvements, and not the market value.
Why should you assume that the question "where did the money come from" will come up?
Because the purchase itself usually brings you into the annual return system. According to the source on which this guide is based, a transfer of ILS 500,000 abroad or holding assets abroad worth more than ILS 2,086,000 requires filing an annual return. A return showing large transfers abroad is information in the hands of the assessing officer.
A capital declaration is a snapshot of all your assets and liabilities on a given day, in Israel and abroad. When there are two declarations, the Israel Tax Authority compares them and checks whether the growth in capital is explained by reported income, gifts, inheritances or loans. In other words, the question is not what the property in Romania is worth, but what the source of the money that paid for it is.
How do you enter a property in Romania on Form 1219?
Form 1219 has a separate section for real estate abroad, and the instructions for completing it set out several clear rules:
| Subject | The rule under the form instructions | What it means in Romania |
|---|---|---|
| Basis of entry | Actual cost, not value | The price in the contract, not a valuer's appraisal or market price |
| Ancillary expenses | Lawyer, brokerage and purchase taxes are added to the cost | Including the notary's fee and the land book registration fee |
| Improvements | Enhancements and upgrades are added to the cost | Finishing works or additions you carried out after the purchase |
| Purchase in instalments | The total price is entered, and the balance not yet paid is entered as a liability | Particularly relevant in an off-plan purchase |
| Foreign currency | Enter in the original currency and convert at the representative rate on the day of each payment | Five payments to the developer means five different rates |
The historical representative rates are published by the Bank of Israel. Anyone who paid the developer in several instalments must convert each instalment separately, at the rate of the day on which it was paid.
What does this look like in an off-plan purchase that has not yet been completed?
Suppose, for illustration only, that you undertook to buy an off-plan villa for EUR 300,000, paid the developer 30%, and plan to finance the balance with a Romanian mortgage on handover. If the declaration date falls midway, the entry will in principle look like this:
- Real estate abroad: the total price, EUR 300,000, plus the ancillary expenses. Each payment made is converted at the representative rate on the day of payment.
- Liability to the developer: the 70% not yet paid, in accordance with the form instructions and your accountant.
- Bank account in Romania: the balance on the declaration date, in euros or in lei, with a conversion into shekels.
- Romanian mortgage: after handover, the loan balance is entered as a liability according to the bank balance.
The exact way in which a liability to the developer before handover is classified is a professional question worth clarifying with your accountant before completing the form.
Which documents should you keep from the transaction in Romania?
The practical recommendation is to open a single file, digital and printed, already at the preliminary contract stage. These are the documents it should contain:
- The preliminary contract (antecontract, the agreement undertaking to sell) and the notarial contract of sale (contract de vânzare-cumpărare).
- A land book extract (extras de carte funciară) from the land registration authority ANCPI, after the property is registered in your name.
- Transfer confirmations from the bank in Israel for each payment, with date and amount.
- Receipts and invoices from the developer, the notary and the lawyer.
- Documents showing the source of the money: account statements, a sale of securities, a loan in Israel or a gift from family members, with a document evidencing it.
- The Romanian mortgage agreement and the repayment schedule, if any.
- Confirmations of tax payment in Romania if the property is let. They are also required for a credit in Israel under the tax treaty.
The most important item is the source of the money. A gift from parents without a document, or cash accumulated over years, are exactly the points at which a capital declaration turns into a lengthy inquiry. The same documents will in any case be required by the banks in Israel and in Romania at the stage of transferring the funds.
How much time is there to file, and what changes in 2027?
According to the Israel Tax Authority, you file within 120 days of the date of the demand, or within 120 days of the date for which the declaration was requested, whichever of the two is later. The declaration is filed signed, complete and with the supporting documents.
Under section 135(1)(a1) of the Ordinance, from 1 January 2027 a capital declaration will be filed online, under rules set by the Director of the Israel Tax Authority. The rules were published in 2026 under the name "Income Tax Rules (Online Reporting of a Capital Declaration)", and it is already possible today to file through the online system and attach documents to it.
A further change concerns new immigrants and long-standing returning residents. In the past they enjoyed a ten-year exemption from reporting assets abroad in a capital declaration. Under the updated text, the exemption has been abolished for anyone who became such a resident from 2026 onwards.
What to do before the purchase, and how we accompany it
Before you transfer the first payment to Romania, decide from which account the money will be sent, document its source, and ask the parties in Romania for a receipt for every payment. When we accompany a purchase, we make sure that the documentation of each stage reaches you in good order, so that the file you hand to your accountant is complete. Acts under Romanian law are carried out by a notary and by lawyers licensed in Romania, and reporting in Israel is done with an accountant or tax adviser.
The above is general information and is not legal or tax advice. The guidance is based on the instructions for Form 1219 and on the text of the legislation as presented in the source, as at October 2026. The way to report in your case should be determined with an accountant or tax adviser.
Frequently asked questions
Must you file a capital declaration after buying an apartment in Romania?
Not automatically. A capital declaration is filed only when the Israel Tax Authority sends a demand under section 135 of the Income Tax Ordinance. However, the purchase may require an annual return, so it is worth being prepared for questions about the source of the money.
Do you report the value of the property in Romania or what I paid?
What you paid. Under the instructions for Form 1219 you state the actual cost and not the value, and add expenses such as the notary, registration, lawyer and brokerage, as well as improvements to the property.
At what rate are payments in euros converted?
At the Bank of Israel representative rate on the day of payment. In a purchase in instalments, each payment is converted at the rate of the day on which it was paid.
Within how long is a capital declaration filed?
Within 120 days of the date of the demand or of the date for which the declaration was requested, whichever is later. From 1 January 2027 filing is online.
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The information in this guide is general in nature and does not constitute legal or tax advice on any specific transaction. Every transaction is assessed on its own facts.