Buying a property in Romania and getting a residence permit in Romania
When it comes to globalization, foreign investment is a very common and important. Through this procedure, entrepreneurs will have a wider range to implement their business ideas and also they can help the local Economic prosperity (economical boom). The European Union gives entrepreneurs the opportunity to invest in businesses outside of their domestic or national economic systems. In most EU countries, foreigners can get an investment visa if they invest in a local or new business or buy a property. The amount of money that a person must invest to get this visa varies from country to country. Most countries will issue a temporary visa that is valid for one year but can be renewed. After a few years, the investors can apply for a permanent residence permit. The legal system of Romania provides strict rules on property ownership in Romania. Foreigners can buy a property in Romania under special circumstances. To invest in Romania and buy a property in Romania, the minimum capital is 1 million Euros, and the residence permit that you get through investment is for 1 year, and after a few years of extension under certain circumstances, a person can apply for permanent residence in this country.
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Buying a property in Romania and people who are eligible to buy a property
Buying a property in Romania for foreigners is divided into two categories. People who want to buy a property in Romania and live in a EU member country or people who do not live in the EU are allowed to buy property in Romania, but they will not have the right to own a land and must buy an apartment or building as a Romanian lawyer and a company in Romania so that they can own the land in this case. There is an exception to this, if a person marries a Romanian citizen and buys a property and share it with his or her spouse. Also, if a person inherits a property from a Romanian under certain conditions, he will have the right of legal ownership.
- To buy a property in Romania, you must first become familiar with the legal restrictions on buying a property in Romania.
The laws of Romania determine some restrictions on people who are allowed to own property. This will depend on the classification of the person and the classification of the property. Romanian and non-Romanian citizens are free to buy and sell any property. Some of the non-EU (non-Romanian) citizens may buy a house or apartment in Romania, but they mustn’t own the land themselves. Contact a lawyer and read a copy of the laws.
- Romanian companies or “legal entities” may buy a property and own a piece land. Under suitable conditions, foreigners may apply for registering a Romanian company and then use the company to buy land.
- Consider the type of the property. The law has less restrictions onfor buying a personal property. Unless you invest in it first.
- The law for the ownership of agricultural land is different. Since 2014, during a seven-year period since Romania joined the European Union, restrictions on agricultural land ownership for foreign buyers have been removed, making it easier, especially for EU citizens.
The second step includes finding and buying the right property.
- Choosing an area. Romania has different regions. Mountain areas, coastal and agricultural areas and tec… If you are not already familiar with this country, you can get enough information by searching on the internet or consulting with experienced lawyers.
- Find a real estate agent in Romania. These agents work on their own and do not work for any government agency, so be careful about their reputation and be aware of their business history and professional background. Using the services of a lawyer who is familiar with the international laws can be a great help to you.
- Select a property and visit the desired property. If you do not live in Romania, you can travel to Romania with a tourist visa and visit the property.
- Getting a loan for non-Romanian citizens has its own laws and you must be working in this country to be able to request for a loan. Just like other Romanian real estate laws, the requirement for being employed in the country may change over time, so check the latest existing laws.
The general steps of getting a loan are:
o Choose/determine a property.
o Contact different banks and compare loan rates and contract terms.
o Complete the documents of bank loans.
o Negotiate with the seller before the contract.
o Mortgage agreement with the bank as the final part
- Offering and negotiating for an agreement to buy a property, in order to know how much to offer for the property, you should consider personal financial resources, the relative market price in the area and other various factors. Once you have determined how much the property worth to you, make your offer through your real estate agent or lawyer.
- You should also consider the ancillary costs of buying a property, including commission, tax, document registration, translator, etc.…
The third step is to complete the purchase; in which you need a reputable lawyer. An attorney who is familiar with international laws will check Ownership documents and land documents. He/she will also receive the report from the Romanian Land Registry. All of these helps to ensure that you are purchasing a legal property.
- A draft of the contract which is made by a notary public or a lawyer so that both parties of the contract will be committed to it.
- Attend the closing ceremony. Both parties or their representatives must be present. The notary will gather the required documents, the parties will sign the contract, and lawyers will take care of the registration of the new document in the Land Registry. The following documents are generally required at the end.
o The seller’s original ownership documents
o Financial records that shows there is no tax on land registration.
o Other Personal Identification documents or Corporate identity
Buying a property in Romania and the costs of buying and renting a property in Romania
The average price of apartments in Romania in 2018 was 6.44% (with inflation of 3.32%) with 1.299 Euros (US $ 1,415). In 2018, all major cities in the country experienced an increase in house prices (rising of house prices). The table below shows the average costs of buying apartments in different cities in an order, based on the urban population and the high cost of Romanian cities.
| Bucharest | 1335 euros (1525 dollars) per square meter |
| Cluj-Napoca | 1555 euros (1776 dollars) per square meter |
| Timisoara | 1207 Euros (1378 dollars) per square meter |
| Brasov | 1,102 euros (1,258 dollars) per square meter |
| Constanta | 1117 euros (1276 dollars) per square meter |
It should be noted that in addition to the cost of buying the property, additional costs are also included. Commission fee of 2 to 4%, local tax of about 2 to 4%, notary fee of about 0.5 to 1% of the property price, the costs of a Romanian translator 60 Euros or 50 US dollars or 50 British pounds, property transfer tax, which varies depending on the duration of maintenance of the property and covers 1 to 3% of the cost of the property. The cost of registration of the property purchase is 0.5 to 2% depending on the price of the property.
You can see the costs of renting a property in Romania in the table below.
| 179.37 $ | One-bedroom apartment in the downtown |
| $ 131.54 | One-bedroom apartment outside of the downtown |
| 316.89 $ | Three-bedroom apartment in the downtown |
| 251.12 $ | Three-bedroom apartment outside of the downtown |
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