Holding Real Estate

Direct holding of real estate

Resident individuals

Personal income tax: Income derived from real estate, such as rental income, is subject to individual income tax. Taxable income will be taxed at a rate of 10%.

Deductibility of costs: The gross annual rental revenue is the revenue the owner receives in a given year under the rental agreement concluded between the parties. Under the tax law, all rental agreements must be registered with the local tax authorities.

If the property owner is an individual who receives rental income under a rental agreement with another individual, the owner (individual) must report the rental income to the Tax Office for payment of the annual income tax. The annual taxable income is determined by deducting a 20% expense allowance from the annual gross rental income. The annual income tax is at a rate of 10% (which is applied to the annual taxable base) and must be paid by the property owner (the taxpayer) by May 25 of the next year.

If the property owner is an individual who receives rental income under a rental agreement with a company/legal entity, the rental income is taxed at source by the tenant (company/legal entity) at each rental payment processed. The taxable rental income is determined by deducting a 20% expense allowance from the rental income. The income tax rate is 10% and is applied to taxable rental income. The tenant is obliged to determine, withhold, and pay the income tax to the Romanian tax authorities up to the 25th of the current month for the previous month.

If renting up to 7 rooms for touristic purposes (for a short period), the taxable revenue will be established by the owner by deducting a 30% expense allowance from the rental revenue. When exceeding 7 rented rooms for touristic purposes in a year, the owner will be required to treat the income obtained as income from independent activities. In this case, the resident and non-resident taxpayer has the obligation to register with the tax office as an individual engaged in independent business.

Besides income tax, a healthcare contribution is also due in case the owner obtains an annual income (alone, or together with other categories of personal income) higher than the threshold set by the law (for 2026 the threshold is 24,300 RON/48,600 RON/97,200 RON representing the equivalent of 6, 12, or 24 minimum gross salaries , upon the case).  

Losses: Losses incurred can be carried forward but cannot be carried back.

Non-resident individuals

Non-resident individuals are treated in the same way as resident individuals. Non-resident individuals must register in Romania to pay personal income tax. Some non-residents are not allowed to hold land, depending on their citizenship and/or the international treaties Romania has concluded with different countries.

Resident companies

Corporate income tax: Companies are subject to a 16% flat CIT rate.

Deductibility of costs, interest, and depreciation: All expenses, maintenance, interest, and depreciation incurred in relation to the real estate assets are deductible.

Anti-tax avoidance directive: ATAD has been implemented in Romania.

Losses: Losses can be carried forward but not carried back.

Non-resident companies

Non-resident companies are treated similarly to resident individuals. Non-resident companies must register in Romania to pay corporate income tax. Some non-resident companies are not allowed to hold land, depending on their residence and/or the international treaties Romania has concluded with different countries.

Corporate income tax: The same as for resident companies

Deductibility of costs, interest, and depreciation: The same as for resident companies.

Anti-tax avoidance directive: ATAD has been implemented in Romania.

Losses: The same treatment as for resident companies. The non-resident company must register in Romania to pay CIT.

Indirect holding of real estate

Resident individuals

Personal income tax: In the case of indirect holding, dividends are subject to tax (16% starting 01.01.2026). If shares are alienated, the capital gain tax at a 16% rate is due, if the transfer is not carried out through resident intermediaries when it is applied:

• 3% if the securities/derivative financial instruments were alienated within a period of more than 365 days from the acquisition date;
• 6% if the securities/derivative financial instruments were alienated within a period of less than 365 days from the acquisition date.

Healthcare contribution: Besides the income tax, a healthcare contribution is also due in case the individual obtains an annual income (alone, or together with other categories of personal income) higher than the minimum threshold set by law (for 2026 the threshold is 24,300 RON/48,600 RON/97,200 RON representing the equivalent of 6, 12, or 24 minimum gross salaries).

Dividend withholding tax: The dividend tax is determined, withheld, and paid by the company to the Tax Office by the 25th of the next month for the dividends paid in the current month. For distributed dividends that are not paid to the individual shareholder by the end of the current year, the company must pay the income tax by January 25 of the next year.

Deductibility of costs, interest payments, and depreciation: The general deductibility rules for companies apply.

Losses: Losses can be carried forward, but they cannot be carried back.

Non-resident individuals

Non-resident individuals are treated in the same way as resident individuals. Non-resident individuals must register in Romania to pay personal income tax. Some non-residents are not allowed to hold land, depending on their citizenship and/or the international treaties Romania has concluded with different countries.

Resident companies

Corporate income tax: In Romania, there is a flat 16% CIT, applicable to all commercial companies.

Deductibility of costs, interest payments, and depreciation: Costs, interest payments, and depreciation are deductible following the general rules for deductibility.

Anti-tax avoidance directive: ATAD has been implemented in Romania.

Non-resident companies

Corporate income tax: In Romania, there is a flat 16% CIT, applicable to all commercial companies.

Deductibility of costs, interest payments, and depreciation: Costs, interest payments, and depreciation are deductible following the general rules for deductibility.

Anti-tax avoidance directive: ATAD has been implemented in Romania.