Inheriting a Property in Romania: Which Law Applies, How the Notarial Procedure Works and When Tax Is Payable

On the day a purchase in Romania is signed, people talk about price, the delivery date and financing. Almost no one asks what will happen to the property if the owner passes away. But a property abroad is often bought in order to pass to the next generation, and whoever does not arrange this in advance leaves the heirs a procedure in a foreign country, in a foreign language and before institutions they do not know. The good news: with a few simple steps on the day of purchase, the procedure can be orderly and predictable.

1Which law applies to a property in Romania owned by an Israeli resident?

As a rule, the law of the country in which the deceased had his or her habitual residence at the time of death, that is, usually Israeli law. Romania is a member of the European Union, so the EU Succession Regulation 650/2012 applies there, in respect of persons who died on or after 17 August 2015.

• The rule: the law of the deceased's habitual residence at the time of death applies.
• Choice of law: a person may specify in a will that the entire succession will be governed by the law of his or her nationality.
• Universal application: the designated law applies even when it is the law of a country that is not a member of the Union, such as Israel.

It is important to distinguish between the law that determines who inherits and the procedure itself. Even when Israeli law applies, the transfer of the property and its registration take place in Romania, according to Romanian rules, before a Romanian notary.

2What changes when Romanian law is the law that applies?

If the deceased was a resident of Romania, or chose Romanian law, the rules of the Romanian Civil Code apply. Two rules usually surprise those coming from Israel:

• Reserved share (rezerva succesorală). The spouse, descendants and parents are “reserved heirs”, and each of them is entitled to half of what he or she would have received on intestacy, even if the will provides otherwise.
• One year to decide. An heir must accept or renounce the inheritance within one year of the date it opens, which is usually the date of death.

3How is the succession procedure conducted in Romania?

1. Approaching a notary. When the deceased's last residence was outside Romania, the first notary approached has jurisdiction, provided that immovable property of the estate is located in his or her area. Notaries can be located through the National Union of Notaries Public of Romania.
2. Submitting the documents, translated into Romanian and with an apostille where required.
3. Opening the file: the notary establishes who the heirs are and, if there is a will, its validity.
4. Certificate of inheritance (certificat de moștenitor): the document that determines who inherits and what each heir's share is.
5. Registration in the names of the heirs in the land book kept by ANCPI.

Notarial signing in Romania is not done remotely. An heir who cannot attend may grant a power of attorney to a representative who will act on his or her behalf before the notary; we have covered powers of attorney for acts in Romania in more detail in the guide to purchasing remotely.

4Is there inheritance tax on a property in Romania?

Under the Romanian Fiscal Code, there is no tax on a transfer by inheritance if the procedure before the notary is completed within two years of the date of death. If it is completed later, the heirs pay 1% of the property's value.

Two years sounds like a long time, but locating documents, apostilles, translations and coordination with a notary from abroad use it up quickly. This is the strongest practical reason to open the procedure without delay.

On the Israeli side there is currently no inheritance tax, but a future sale of the property by the heirs may be subject to tax, and at that point the tax treaty between Israel and Romania comes into play. The Israeli aspect should be checked with a tax adviser and with the Israel Tax Authority.

5Can foreign heirs inherit land in Romania?

Article 44 of the Romanian Constitution expressly permits foreign citizens to acquire land by legal inheritance. Inheritance under a will, and in general the ownership of land by non-EU citizens, is a question that requires individual review, especially for villas that include land. The rules on land ownership are explained in our guide to registering land in the name of an Israeli buyer.

6What should be arranged already on the day of purchase?

1. A will that refers expressly to the property in Romania and, where appropriate, an express choice of the law of nationality.
2. A single folder, which the heirs know about, with the contracts, the extract and the notary's details.
3. Consideration of joint ownership with a spouse, after advice.
4. An understanding that the heirs will need a NIF if they sell or rent out, even if there is no need to obtain it in advance.
5. Remember that a power of attorney lapses on death; it is not a substitute for succession planning.

7What to do before signing and how we assist

The conversation about inheritance belongs at the preliminary contract stage, not at the stage when it is already needed. We help buyers think about the ownership structure, coordinate between the Israeli will and the property in Romania, and assist heirs before the Romanian notary when the procedure is opened. The procedure itself, the certificate of inheritance and the registration are carried out by a notary and by lawyers licensed in Romania.

Read next · 7 min readA Will for an Israeli With Property in Romania: Choice of Law, Form of the Will and Coordination With the Will in IsraelHow to write a will that works for property in Romania: Regulation 650/2012 and choice of law, notarial or handwritten wills, reserved shares, the Israeli will.Read the guide

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.