Annual Building and Land Tax in Romania: How Much an Israeli Property Owner Pays, How It Is Calculated and What Changed in 2026

1What is the annual building and land tax in Romania?

This is an annual local tax that every property owner in Romania pays to the local authority in whose area the property is located - whether or not he or she is a resident of Romania. Like the arnona in Israel it is collected by the municipality, but unlike the arnona it is imposed on the owner and not on the actual occupier, so even a rented apartment continues to burden the Israeli investor.

The tax is regulated in the Romanian Fiscal Code (Law 227/2015, Title IX - local taxes and fees) and consists of three main components: impozit pe clădiri - tax on the building itself; impozit pe teren - tax on the land; and additional local fees set by each authority, such as a waste collection fee. In an apartment in a multi-unit building the land component is usually negligible, while in a private house or a plot for development it may be more significant.

2How is the building tax calculated for a residential apartment owned by an individual?

For an individual, as of October 2026, the tax on a residential building is calculated according to a fixed formula in Article 457 of the Fiscal Code: built area × taxable value per sq m × a correction coefficient according to zone and the rank of the locality × the tax rate set by the local council. For an apartment in a building, the built area is calculated as the usable area (suprafața utilă) multiplied by 1.4.

1. Area: for a house - the built area stated in the documents; for an apartment - the usable area × 1.4.
2. Value per sq m: set in a table in the Fiscal Code according to the type of building (concrete/brick or other materials) and according to the presence of water, sewage, electricity and heating infrastructure. According to the table updated by Law 239/2025, for 2026 the value for a concrete or brick building with all utilities is 2,677 lei per sq m.
3. Zone coefficient: a coefficient set according to the rank of the locality (rang) and the zone within it. For example, in the city of Buzău (rank II) the coefficients range from 2.1 to 2.4. In Bucharest and the large cities the coefficient in central areas is higher.
4. Tax rate: the local council sets a rate in the range of 0.08%-0.2% for residential apartments. Under Law 239/2025, the rate for 2026 cannot be lower than the 2025 rate.
5. Local surcharge: the Fiscal Code allows authorities to impose an additional rate (cotă adițională) under certain conditions - check the council's decision (HCL) for the locality.

Illustration only: an apartment of 70 sq m usable area in a concrete building with all utilities, in a zone where the coefficient is 2.4 and the rate 0.1%: 70 × 1.4 = 98 sq m built; 98 × 2,677 = 262,346 lei; × 2.4 = approximately 629,630 lei taxable value; × 0.1% = approximately 630 lei annual tax. The actual amount depends on the data of the locality, so you should always obtain the local decision or the assessment notice (decizie de impunere).

3What changed in 2026 following Law 239/2025?

The main change for 2026 is a sharp increase in the base values per sq m and the cancellation of some of the reliefs. Law 239/2025 (the “fiscal measures package 2”) was published on 15 December 2025 and changed the tables in the Fiscal Code, and at the same time the move to taxation by market value was postponed to 2027.

The practical implication: apartment owners, especially in older buildings and large apartment buildings, saw a noticeable increase in the tax for 2026 compared with 2025, even if the absolute amount is still low relative to Israel.

4How is the tax calculated when the property is owned by a Romanian company (SRL)?

For a company the basis is completely different: the tax on a building is calculated according to the value set in a valuation report (raport de evaluare) and not according to an area table. As of October 2026, residential apartments owned by a company are subject to a rate of 0.08%-0.2%, and non-residential buildings (offices, retail, logistics) to a rate of 0.2%-1.3%.

• Obligation to revalue: a company that has not carried out a valuation of the building in the last five years may be liable at a rate of 5% on the value of the building - a material amount that should be managed in a compliance calendar.
• Postponement to 2027: Law 239/2025 sought to cancel the favourable rules for residential apartments and mixed-use buildings owned by companies; Emergency Ordinance 78/2025 postponed the change to 1 January 2027.
• Non-residential buildings: Law 239/2025 also introduced changes in determining the taxable value and in the rates for non-residential buildings, including a move to a uniform grid of values. Practical implementation is still taking shape and should be checked with the authority before a commercial purchase.
• Purchase during the year: the seller is liable for tax for the whole year in which the sale took place, and the buyer begins paying from the following year.

5How much does the land tax cost and when is it significant?

Land tax is set as a fixed amount per sq m according to the rank of the locality, the zone and the land's designated use, and not as a percentage of value. In an apartment in a multi-unit building it is usually very low, but on a plot for development, on agricultural land awaiting a change of designation or on a detached house with a large yard it can be a noticeable component.

Developers should remember: land acquired for a project continues to be taxed also during the planning and permitting period, which may last a long time. It is advisable to include the land tax and the future building tax in the project's cash-flow forecast already at the preliminary examination stage.

6When and how do you pay, and what happens if you do not pay?

The tax is paid in two equal instalments - by 31 March and by 30 September of each year. Local councils may give a discount of up to 10% to anyone who pays the full annual tax by 31 March, and most large cities do so.

• Registration after purchase: after a purchase before a notary, the data is transmitted to the authority, but the responsibility to ensure that the property is registered in your name in the local tax file is yours. It is advisable to approach the authority shortly after the purchase.
• Remote payment: in many authorities it is possible to pay through the ghiseul.ro portal or through the municipality's website. A foreign investor will sometimes encounter the need for a Romanian tax identification number (NIF) in order to open a file and pay.
• Non-payment: late-payment charges accumulate, and on a sale the notary will require a local tax certificate (certificat de atestare fiscală) proving that there are no debts. An old debt may delay a transaction.

7Is the Romanian tax recognized in Israel?

The Romanian building tax is a local property tax and not an income tax, so it cannot be credited directly against income tax in Israel. However, if the property is rented out and the regular tax track is chosen in Israel, it may be recognized as an expense in producing the income. In the 15% track on rental income from abroad, no expenses other than depreciation may be deducted, so the local tax will not reduce the tax.

It is therefore worth examining the annual tax together with rental taxation and not separately: for an apartment with high ongoing expenses, the regular track may be more worthwhile.

8Pre-purchase checklist

1. Ask the seller for a current local tax certificate and make sure there are no debts on the property.
2. Check in the local council's decision (HCL) for the current year the rate, the zone coefficient and whether an additional rate exists.
3. Calculate an estimate of the annual tax according to the formula and include it in the yield forecast.
4. If the purchase is through a company - plan a valuation already in the year of purchase and set a date for revaluation.
5. For an especially expensive property - check whether the value crosses the 2,500,000 lei threshold above which the special tax applies.
6. Prepare for the expected move to taxation by market value in 2027.

9What to do before signing and how we accompany you

The annual tax in Romania is not usually high, but it varies from locality to locality, it has been rising in recent years, and it is directly affected by the decision whether to hold the property personally or through a company. As part of the legal review before the transaction we check the state of local debts, estimate the expected tax according to the authority's data and coordinate with the accountant in Israel and in Romania the holding structure, so that there are no surprises after handover.

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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.