Romania's Government postponed by one year increasing the threshold for the preferential 5% VAT rate applied at the sale of new apartments and houses, Ziarul Financiar reported.

The threshold should increase from about EUR 93,000 currently to EUR 140,000.

The Government estimates that this measure would have impacted its VAT revenues by some RON 200 million (EUR 41 mln).

The decision was passed by an emergency ordinance on December 30.

Initially, the Parliament had passed the preferential VAT rate for more expensive homes in October.

The Government's decision, not announced before, is part of what seems to be an undeclared austerity package aimed at bringing the budget deficit down to 7% of GDP in 2021 from over 9% of GDP in 2020.

The real estate developers claim that they have invested hundreds of thousands of euros in re-designing residential projects to adapt to the new market conditions enacted by lawmakers on October 20.

(Photo: Andrey Popov/ Dreamstime)

andrei@romania-insider.com