In brief
An Israeli resident who holds a property in Romania pays tax in both countries: in Romania under Romanian law, and in Israel on the income and on the capital gain, with the tax treaty between the countries preventing double taxation but not cancelling the Israeli liability. On purchase there is no purchase tax for the buyer in Romania, on an individual's rent the Romanian tax is about 8% of the gross, and on sale the Romanian tax is 3% or 1% of the transaction value, and in Israel 25% on the gain with a credit.
Key takeaways
- 1Romania has no purchase tax for the buyer; the transfer tax is imposed on a private seller, and on a purchase from a developer company it does not apply. The notary and registration cost about 1%-1.5% of the transaction value.
- 2Buying a property abroad does not create a tax liability in Israel, and an apartment in Romania is not considered an apartment in Israel for purchase tax purposes.
- 3On rent: in Romania about 8% of the gross for an individual; in Israel a 15% track with no credit, or marginal tax with a credit under the treaty.
- 4A Romanian micro-enterprise is taxed at 1% of turnover only under three cumulative conditions; otherwise 16% of profit, and dividends 16%.
- 5On sale: 3% or 1% of the transaction value in Romania, and 25% on the capital gain in Israel less a credit for the Romanian tax.
The question an Israeli investor should ask about a property in Romania is not only “how much does it bring in”, but “how much remains after tax, in both countries”. Tax rates in Romania are relatively low, but the full picture emerges only when the Israeli side and the credit mechanism under the tax treaty are added. The guide goes through the three stages of the transaction, purchase, holding and sale, and ends with a full numerical example. The figures are correct as of October 2026.
Why does an Israeli resident also pay tax in Israel on a property in Romania?
Because an Israeli resident is liable to tax in Israel on income from assets abroad and on capital gains from their sale. The tax treaty between Israel and Romania does not cancel this liability; it only prevents double taxation, by allowing a credit for the tax paid in Romania against the tax in Israel. To use the credit, orderly reporting and documentation of every tax payment in Romania are required.
Buying a property abroad does not create a tax liability in Israel, and an apartment in Romania is not considered an apartment in Israel for purchase tax purposes.
Is there a tax on buying property in Romania?
For the buyer there is no purchase tax in the Israeli sense, and there are no brackets of 8% or 10%. What you pay is the notary's fee and the land register registration fee (0.15%, to ANCPI, the Romanian land registration authority). The transfer tax (Impozit pe transferul proprietăților, tax on the transfer of property) is imposed on a private seller, and on a purchase from a developer company it does not apply. In total, about 1%-1.5% of the transaction value.
By way of illustration: on the purchase of a villa for EUR 140,000, the total notary cost is roughly EUR 2,000.
On a new apartment, VAT is added: 21% at the standard rate, after it rose from 19% in August 2025. The reduced 9% rate, which applied during a transitional period, ended on 30 September 2026, so today every new apartment is subject to 21%. Confirm in writing whether VAT is included in the price.
Buying a property abroad does not create a tax liability in Israel; the Israel Tax Authority takes an interest in the property only from the moment it produces income or is sold. In addition, an apartment in Romania is not considered an apartment in Israel, so someone who has no apartment in Israel and buys an apartment in Israel in the future will pay purchase tax at the single-apartment brackets.
How is rental income taxed, in Romania and in Israel?
In Romania, as an individual: a tax of 10% on the rent, after a statutory expense deduction of 20% with no need for proof. That is, 80% of the income is effectively taxed, with an effective tax of roughly 8% of the gross. In the past the deduction was 40%, and old guides still present the old figure. For example, on rent of EUR 12,000 a year the Romanian tax is about EUR 960.
Above a certain income threshold, CASS, a Romanian health insurance contribution, is added. The threshold and the rate change from time to time, so it is worth checking with a Romanian accountant in every tax year.
In Israel: the income must be reported, and each year you choose between two tracks:
| Track in Israel | Tax base | Credit for the Romanian tax |
|---|---|---|
| 15% track | Gross rent, less depreciation only | None |
| Tax by brackets | Income after full deduction of expenses | Yes, under the tax treaty |
The choice depends on the level of income, the expenses and your personal situation, and is made with a tax adviser.
Individual or Romanian company: what is the tax difference?
A standard Romanian company (SRL, a limited liability company) is taxed at 16% of profit, and distributing profits as a dividend is taxed at 16% from January 2026. This route is suitable mainly for those who hold several properties or operate on a large scale.
There is also a “micro-enterprise” regime (Microîntreprindere), taxed at 1% of turnover rather than profit, but only under three cumulative conditions:
- The company's revenues do not exceed EUR 100,000 a year.
- The company employs at least one employee at the minimum wage.
- Rental income does not exceed 50% of the company's total revenues.
The third condition means that a company whose sole activity is letting real estate will not qualify for this regime. It is suitable mainly for those who combine an additional business activity, and requires planning with a Romanian accountant.
How much tax is paid on sale, in each country?
In Romania, an individual pays tax on the transaction value and not on the gain: 3% if the property was held for up to three years, and 1% beyond that. The exemption threshold of 450,000 lei, which existed until 2023, has been abolished, and the tax applies to the full value. For illustration only: a villa bought for EUR 140,000 and sold after 4 years for EUR 190,000 will be charged in Romania 1% of the transaction value, about EUR 1,900, regardless of the gain.
In Israel, an Israeli resident is liable to 25% tax on the capital gain, with a credit for the tax paid in Romania under the treaty. It is worth building this figure into the planning from day one.
What does the full calculation look like in a single example?
To illustrate the tax calculation only, and not as a price forecast: buying a villa for EUR 150,000 and selling it after 5 years for EUR 200,000.
| Stage | Calculation | Estimated amount |
|---|---|---|
| Purchase: notary and registration | About 1%-1.5% of the transaction value | About EUR 1,500-2,250 |
| Sale: tax in Romania | 1% of the transaction value (holding over 3 years) | EUR 2,000 |
| Sale: tax in Israel | 25% on a gain of EUR 50,000 = 12,500, less a credit of 2,000 | About EUR 10,500 |
| Total on purchase and sale | Before tax on the rent | About EUR 14,000-14,750 |
If the property is let, the tax on the rent is added: about 8% of the gross in Romania, and in Israel according to the track chosen. This part is worth calculating with a tax adviser familiar with both countries.
What should be done before signing?
Build a forecast that includes both tax systems, and decide before the purchase whether to buy as individuals or through a company. When we accompany a buyer, we present these points already at the review stage, and connect a Romanian accountant with an Israeli tax adviser who specialises in assets abroad, before the transaction and not after it. 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. The examples are illustrations on simplified assumptions. Tax rates and rules in both countries may change. 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 real estate in Romania?
For the buyer there is no purchase tax in the Israeli sense. You pay the notary and registration, about 1%-1.5% of the transaction value, and the transfer tax is imposed on a private seller. On a new apartment there is also VAT of 21%.
Do you also have to pay tax in Israel on a property in Romania?
Yes. An Israeli resident reports the rent and chooses between a 15% track on the gross with no credit and marginal tax with deduction of expenses and a credit. On sale, a 25% tax applies to the capital gain, with a credit for the Romanian tax under the treaty.
Does an apartment in Romania affect purchase tax on an apartment in Israel?
As a rule, an apartment abroad is not considered an apartment in Israel, so someone who has no apartment in Israel will in the future pay purchase tax at the single-apartment brackets. It is worth verifying your personal situation with a tax adviser.
What are the conditions for a micro-enterprise in Romania?
Revenues of up to EUR 100,000 a year, at least one employee at the minimum wage, and rental income not exceeding 50% of total revenues. Otherwise the company is taxed at 16% of profit.
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 guideSources
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.