Romania’s Prime Minister Sorin Grindeanu said on Friday that the Government supports the idea to cut the VAT for house sales to zero, and will support this project in the Parliament, but added that it’s necessary to have talks with the European Commission on this topic.

Grindeanu referred to the law submitted to the Parliament on February 22 by the Social Democratic Party (PSD) leader Liviu Dragnea, which introduces zero VAT for the sale of houses under RON 450,000 (EUR 100,000). The same project provides zero VAT for media advertising.

The Prime Minister said that the real estate sector should return to the place where it was ten years ago and have an important share in the Romanian economy.

“We will notify the European Commission, because there are different VAT regulations and there are certain rules countries must follow. It's not a new thing,” he added.

The current VAT on house sales is 5% for houses under RON 450,000 (EUR 100,000) and 19% for more expensive properties. The VAT rate for advertising services amounts to 19%. The two VAT cuts are part of the PSD governing program and were supposed to enter into force starting March 1.

The zero VAT measure will apply to the sale of homes to individuals, as well as to the sale of buildings that will be used as homes for the elderly or orphanages. It also applies for apartments that will be rented by the city halls to people with low revenues.

editor@romania-insider.com