In brief
A property in Romania is relatively cheap to enter and to hold: there is no purchase tax, and the Romanian tax on an individual's long-term rental is about 8% of the gross rent. But an Israeli resident also has an Israeli tax layer on the rent, running costs, and a Romanian tax on sale that is calculated on the full transaction value and not on the gain.
Key takeaways
- 1Romania has no purchase tax; the notary and registration cost about 1%-1.5% of the transaction value, and a new apartment carries VAT of 21%.
- 2An individual letting long-term pays 10% after an automatic 20% deduction, that is, about 8% of the gross rent.
- 3In Israel, the 10% track does not apply to an apartment abroad; you choose between a 15% track with no credit and marginal tax with a credit.
- 4On sale, an individual pays 3% of the transaction value for up to three years of holding and 1% thereafter, and the exemption threshold of 450,000 lei has been abolished.
- 5A Romanian company (SRL) usually makes sense only with several properties or land for development.
The price in the contract is only the first line. A property in Romania keeps costing money every year, even when it is empty, and it comes with two tax systems: the Romanian and the Israeli. This guide goes through the life of the property in order, from the day you sign to the day you sell, so that you can build a complete forecast and not just a rental forecast. The figures are correct for the 2026 tax year, after the 2025 changes.
How much does it cost on the day of purchase, and is there a purchase tax?
Romania has no purchase tax as in Israel. On the day of signing you pay the notary's fee and registration fees, in total about 1%-1.5% of the transaction value.
By way of comparison, in Israel a person buying a second apartment for ILS 1.5 million pays about ILS 120,000 in purchase tax before even receiving the key.
On a new apartment from a developer there is VAT, and here it is worth paying attention to the recent changes: the standard rate rose from 19% to 21% in August 2025, and the reduced 9% rate that applied during a transitional period ended on 30.09.2026. Since then, every new apartment sold to a private individual carries 21%. Before the preliminary contract, ask for written confirmation of whether VAT is included in the price offered.
An individual letting long-term pays 10% after an automatic 20% deduction, that is, about 8% of the gross rent.
Which costs recur every year?
Four main lines, which exist even when the property is not let:
| Cost | Who sets it | Note |
|---|---|---|
| Local property tax | The local authority | Varies between authorities |
| Building insurance | The insurer; the bank where there is a mortgage | A lending bank will require insurance in which it is the beneficiary |
| Maintenance and vacant periods | You | Conservative planning assumption: about 5% of the rent |
| Property management | The management company | Usually about 8% of the rent, when letting through a management company |
The practical rule: when someone presents you with a yield forecast, ask to see all these lines on paper, each one separately.
How much Romanian tax is paid on rental income?
An individual letting long-term pays 10% on the rent after an automatic expense deduction of 20%. In practice this is about 8% of the gross rent, according to the PwC tax summaries.
Until the end of 2022 the deduction was 40%, that is, an effective tax of about 6%. In 2023 there was no deduction at all, and from 2024 the deduction is 20%. Old guides still show 6%, and this is a common mistake in forecasts.
- Health contributions (CASS, Romanian health insurance): added above an annual income threshold of about 24,300 lei.
- Short-term letting, up to 7 rooms: the deduction is 30% and the tax is 10% on the balance, that is, about 7% of the gross rent.
And what is paid in Israel on the same rent?
An Israeli resident is liable to tax in Israel also on rent from Romania, and the familiar 10% track for letting an apartment in Israel does not apply to an apartment abroad. Each year you choose between two tracks:
- The 15% track (Section 122A of the Income Tax Ordinance): 15% on the gross rent, less depreciation only. Simple to operate, but with no credit for the tax paid in Romania, so the Romanian tax becomes a final cost.
- The marginal tax track: you deduct all expenses (interest, management, maintenance, depreciation), pay according to your personal tax brackets, and receive a credit for the Romanian tax under the tax treaty. Suitable mainly for those whose tax bracket is low, those who have reached 60, or those whose expenses are high, for example in the first years of a mortgage.
An example for illustration only, on simplified assumptions, for rent of EUR 6,600 a year:
| Layer | Calculation | Estimated annual tax |
|---|---|---|
| Romania | 10% after a 20% deduction | EUR 528 |
| Israel, 15% track | Assuming depreciation reduces the base to about EUR 5,000 | About EUR 750 |
| Combined | About EUR 1,250-1,300, about 19% of the rent |
The result is much higher than the 8% sometimes mentioned in marketing presentations. The amount of depreciation, the choice of track and the final liability depend on your personal data, and this calculation is made by a tax adviser familiar with both countries.
When is it worth holding the property through a Romanian company?
A Romanian company (SRL, a limited liability company) pays corporate tax of 16%, or 1% of turnover under the micro-enterprise regime up to a turnover of EUR 100,000. The ceiling was reduced from EUR 250,000. Distributing the profits as a dividend is taxed at 16%.
This means two layers of tax plus fixed accounting and reporting expenses. With a single property, these layers can eat up a considerable part of the income. A rule of thumb, not advice: with one property, you usually start as individuals. With three properties or more, or land for development, a company starts to make sense. The decision is made with a tax adviser before signing, not at the end of the first year.
How much tax is paid on sale?
An individual pays tax on the transaction value, not on the gain: 3% if the property was held for up to three years, and 1% beyond that (Article 111 of Law 227/2015, the Fiscal Code).
Until 2023 there was an exemption threshold of 450,000 lei, and it has been abolished. Today the tax applies to the full value, from the first leu. In Israel, an Israeli resident reports the capital gain and pays 25% on the gain, with a credit for the Romanian tax under the tax treaty. In Romania the rate is low but applies to the entire value; in Israel the rate is high but applies only to the gain. The Romanian structure rewards long holding.
What does the full cost map look like?
| Stage | Track or condition | Rate (as of 2026) |
|---|---|---|
| Purchase | Notary and registration | About 1%-1.5%, no purchase tax |
| Purchase of a new apartment | VAT at the standard rate, since 1.10.2026 for every new apartment | 21% |
| Long-term rent, individual | 10% after a 20% deduction | About 8%, plus health contributions above the threshold |
| Short-term rent, up to 7 rooms | 10% after a 30% deduction | About 7% |
| Company (SRL) | Standard / micro up to a turnover of EUR 100,000 | 16% / 1% |
| Dividend | Distribution of profits from a company | 16% |
| Sale, individual | Up to 3 years / over 3 years | 3% / 1% of the transaction value |
| Israeli tax on rent | 15% track or marginal tax | According to personal data |
| Local tax | Set by the authority | Varies |
What should be done before signing?
Before signing, it is worth building a forecast that includes both tax layers and the running costs, and deciding in advance whether to buy as individuals or through a company. Another inexpensive step that is often forgotten: an Israeli will can be admitted through legal proceedings before a court in Romania, and a will that expressly mentions the Romanian property saves the heirs a great deal of time. When we accompany a buyer, we gather these questions into a single meeting with the tax adviser, and the acts governed by Romanian law are performed by a notary and a lawyer licensed to practise in Romania.
The content of this article is general information only and does not constitute legal advice, tax advice or an investment recommendation. Tax law in Romania and in Israel changed materially in 2025-2026 and may change again. Before a transaction, it is recommended to consult a tax adviser familiar with the law of both countries.
Frequently asked questions
Is there a purchase tax on property in Romania?
No. On the day of signing you pay the notary and registration, about 1%-1.5% of the transaction value, and on a new apartment also VAT of 21%. It is worth confirming in writing whether VAT is included in the price.
How much tax is paid in Romania on long-term rent?
An individual pays 10% after an automatic 20% deduction, that is, about 8% of the gross rent, plus health contributions above an income threshold of about 24,300 lei a year. For short-term letting, up to 7 rooms, the deduction is 30%.
Does the Israeli 10% track apply to an apartment in Romania?
No. Rent from abroad is taxed in Israel under the 15% track with no credit for the Romanian tax, or under the marginal tax track with deduction of expenses and a credit. The choice is made each year.
Is it worth buying a single property in Romania through a company?
Usually not. Corporate tax is 16%, or 1% of turnover under the micro-enterprise regime up to EUR 100,000, and a dividend distribution is taxed at 16%. With three properties or more, or land for development, it is worth checking this with a tax adviser.
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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.