In brief
In Romania the tax on a sale is imposed on the seller and calculated on the declared price, but never below the minimum value set by the chamber of notaries (Fiscal Code, Article 111). So a low declaration saves the seller a small amount, and below the grid saves nothing, while the buyer bears the risk: the difference does not exist as against third parties, the financing is smaller, the notary must examine the transaction, and the future capital gain may grow. The safe route is to record the full price and pay only by bank transfer.
Key takeaways
- 1The tax base is the price in the contract, but if it is lower than the notarial grid the tax is calculated on the grid (Article 111(4^1) of the Fiscal Code).
- 2The seller pays 3% for up to three years of ownership and 1% thereafter, as of October 2026; with long ownership, every 10,000 euros not recorded saves them 100 euros.
- 3A secret agreement on a different price operates only between the parties and cannot be enforced against third parties acting in good faith (Civil Code, Articles 1289 and 1290).
- 4The notary is a reporting entity under Law 129/2019: they must examine an unusual transaction, report a suspicion and not carry out a transaction they could not check.
- 5A low purchase price on paper may increase the taxable gain when you sell, in Israel and in other countries.
The proposal usually comes towards the end, when everything has already been agreed: "We'll record a lower amount at the notary, and you'll transfer the rest separately." It sounds like a mutual favour. In practice, it saves the seller a little and shifts most of the risk to you.
Our position is simple: the contract records the real price, every euro of it. This guide explains the reasons, so that you can explain them to the seller too, and decline politely and with confidence.
On what amount is the tax calculated when a property is sold in Romania, and who pays?
The tax is imposed on the seller when the seller is a private individual, and it is calculated on the price in the contract, subject to a floor. These are the rules in Article 111 of the Fiscal Code (Law 227/2015), as of October 2026:
| Issue | The rule | Article |
|---|---|---|
| Tax base | The price the parties declare in the contract | 111(4) |
| Floor | If the price is lower than the minimum value set by the chamber of notaries (grila notarială), the tax is calculated on the minimum value | 111(4^1) |
| Rate | 3% for ownership of up to 3 years, 1% after 3 years | 111(1) |
| Collection | The notary, before signing | 111(6) |
| Updating the minimum values | The chambers of notaries, at least once a year | 111(5) |
The grid is a floor for tax, not a valuation, and for a new property sold at market price it is usually lower than the price. The first consequence: a declaration below the grid saves no tax at all. The second consequence: even above the grid the saving is small. A seller who has owned the property for more than three years saves 100 euros for every 10,000 euros not recorded.
The seller pays 3% for up to three years of ownership and 1% thereafter, as of October 2026; with long ownership, every 10,000 euros not recorded saves them 100 euros.
What does the buyer risk when the price in the contract is lower than the real one?
- The difference does not exist in law. When there is an official document with one amount and a hidden understanding on another, the Civil Code treats this as "simulation" (simulație). The hidden agreement affects only the relationship between the seller and the buyer (Article 1289), and a third party who relied in good faith on the visible document is not bound by it (Article 1290). A bank, a future buyer or an authority sees only what is written in the notarial contract and in the land book.
- Rescinding the transaction. Suppose a defect is discovered, a debt you were not told about, or a third party claims the property, and you want to rescind and get your money back. The document you hold shows only the reduced amount. What you paid separately you will have to prove, against a seller who was already party to the simulation.
- Financing. Banks in Romania lend foreign residents up to 70% of the price, and they rely on the contract and on their own appraiser. A low price in the contract usually means a smaller loan, and the money transferred separately is money the bank does not see.
- Source of funds. The money "on the side" almost always moves in cash or to an account that is not the seller's, and these are exactly the movements that Law 129/2019 on the prevention of money laundering targets.
- Buying from a developer. When the seller is a developer, every payment must receive a tax invoice with VAT. Money that moves without an invoice is undocumented and unprotected, and in an off-plan project the only place down payments go is the project's dedicated account.
What does it look like in figures?
Suppose a property whose real price is 200,000 euros, which the seller has owned for more than three years, and whose minimum value is below 150,000 euros. The seller proposes recording 150,000 euros and receiving 50,000 euros separately. The calculation is for illustration only:
| Item | Real price in the contract | Low price in the contract |
|---|---|---|
| Seller's tax (1%) | 2,000 euros | 1,500 euros |
| The seller's saving | None | 500 euros |
| Financing of up to 70% of the contract price | Up to 140,000 euros | Up to 105,000 euros |
| Money you will need beyond the mortgage | At least 60,000 euros | At least 95,000 euros, of which 50,000 euros with no document |
The bank sets the actual financing according to the documents and its own appraisal, but the direction is clear: the seller saves 500 euros, and you need more equity, a large part of which is not documented anywhere.
What must the notary do under Law 129/2019?
Article 5(1)(f) of Law 129/2019 defines a notary who handles a real estate transaction as a "reporting entity". Their duties do not depend on the parties' wishes:
- Examining an unusual transaction. Article 17(2) requires examining the background and purpose of an unusual transaction, or of a transaction whose economic or lawful purpose is not apparent. A marked gap between the price and the market value falls squarely into this category.
- Reporting a suspicion. Where there is knowledge, suspicion or reasonable grounds to suspect that the money is of criminal origin, Article 6 requires a report to ONPCSB, the Romanian anti-money laundering office.
- Routine cash reporting. Every cash transaction of 10,000 euros or more is reported, even without suspicion (Article 7(1)).
- No check, no transaction. If the notary cannot complete the check, they do not carry out the transaction (Article 11(9)).
In addition, Law 70/2015 restricts the use of cash in Romania. Any payment that does not go through a bank should be checked in advance with your lawyer.
What difference does it make on the day you sell, and in reporting in Israel?
The price recorded today will be your purchase price in every future document.
- In Romania: when you sell, the Romanian tax will be derived from the sale value and not from the gain, so there the old price does not change the calculation.
- In Israel and in other countries: capital gains tax is usually built on the difference between the sale price and the documented purchase price. The lower the price recorded at purchase, the larger the gain that will appear in the calculation, and with it the tax. It is worth sitting down with an accountant on this scenario before signing.
- The next buyer: they too will get financing according to the documents. If you ask them to "top up separately", you will be on the other side of the same problem.
Which requests should you refuse, and what do you do instead?
- "We'll record less, and the rest in cash." No.
- "We'll make a side agreement for the furniture or for consulting services." When the side agreement actually covers part of the price of the property, it is the same simulation, just under a different heading.
- "Part of the money will go into a family member's account." Law 129/2019 lists payment through a third party among the risk indicators, and you also lose evidence that the money reached the seller.
- "We'll declare less than the grid." The floor in Article 111 cancels the saving from the outset.
- "The difference doesn't need an invoice." With a developer, there is no payment without an invoice.
- "The notary won't go into it." They are obliged to check, and it is written into law.
Instead: record the full price, every payment leaves a bank account in your name and enters the account stated in the contract, and the tax goes into the calculation from the start. If the seller is worried about a 1% tax, that amount can usually be bridged in the price itself. And the seller's or developer's lawyer represents only them, so you should have a lawyer of your own.
What to do before signing?
Before the contract, ask the notary for the grid value of the property, calculate the tax, the fees and the charges in advance, and prepare a source-of-funds file that matches the price in the contract exactly. We accompany Israeli buyers in reviewing the documents and planning the payments, and coordinate with your accountant in Israel. The signing, the tax collection and the registration are carried out by a public notary and a lawyer licensed in Romania.
This article is general information, current as of October 2026, and is not legal or tax advice for a specific case. Tax rates, grid values and financing rules change, and the Israeli tax consequences should be checked with an accountant before buying.
Frequently asked questions
May I record in a Romanian contract a price lower than the one I paid?
The contract should reflect the real price. A lower price is a simulation: the secret agreement operates only between the parties and not against third parties acting in good faith (Civil Code, Articles 1289 and 1290), and it exposes both sides to tax problems and to scrutiny under Law 129/2019.
If the price in the contract is below the notaries' table, does the tax go down?
No. Under Article 111(4^1) of the Fiscal Code, when the declared price is lower than the minimum value, the tax is calculated on the minimum value.
Who pays the sale tax in Romania?
The seller, when the seller is a private individual: 3% if they owned the property for up to three years and 1% after three years, as of October 2026. The notary collects the tax before signing.
Will the notary report a transaction with an unusually low price?
A notary is a reporting entity under Law 129/2019. They must examine an unusual transaction and, if they have reasonable grounds to suspect that the money derives from an offence, report a suspicious transaction (Articles 6 and 17). If they cannot complete the check, they do not carry out the transaction.
How does a low price in the contract affect capital gains tax in Israel?
The declared purchase price is usually the starting point for calculating the gain, so a low price on paper may increase the taxable gain when you sell. The calculation should be done with an accountant before buying.
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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.