The Romanian VAT increase to put pressure on buyers

Starting August 1, 2025, Romania’s residential market enters a new stage, marked by significant fiscal changes. One of the most impactful is the removal of the reduced 9% VAT rate for housing and the implementation of the standard 21% rate. According to Romeo Ghica, Operations Manager at Hercesa Romania, this change will have notable effects both on housing prices and on the behavior of buyers and renters in the near future.

“The market is facing challenging conditions, with a great deal of uncertainty and heightened concern. Clearly, the VAT increase will have a significant impact on the residential market. For an apartment listed at EUR 100,000, this change means an additional cost of around EUR 12,000 for the end buyer”, said Romeo Ghica.

However, the Hercesa representative emphasizes that the actual impact of this measure will also be influenced by other key factors, such as the availability of bank financing and the appetite of lending institutions to support purchases and developments. In this context, Hercesa reaffirms its commitment to maintaining an optimal price-to-quality ratio for the benefit of its clients.

”In the medium and long term, the removal of the reduced VAT rate could contribute to the market’s maturation, shifting buyers’ focus from acquisition price to product quality, sustainability and integrated amenities.”

Regarding price trends, Romeo Ghica notes that current values in major cities are not necessarily the result of speculative overvaluation but rather reflect the growing imbalance between steady demand in certain areas and declining supply.

The rising cost of utilities and the overall cost of living is another factor directly affecting the market. Romeo Ghica anticipates a slight increase in rents, especially in areas with strong demand, but warns that there is both a psychological and financial threshold beyond which tenants can no longer go.

”Landlords will try to pass on inflationary pressure, but there is a limit to affordability that must not be exceeded.”

For buyers, the dominant trend in the second half of 2025 will be caution. Purchase decisions are expected to be postponed or reassessed, with more attention directed toward energy-efficient homes in good locations, offering relevant features for a sustainable lifestyle.