According to the information provided, the sale of a building and land in Romania can be subject to value-added tax (VAT) depending on certain conditions. Here’s a breakdown of the VAT implications based on the type of property:
- New Housing Units: The sale of new residential properties to individuals is subject to VAT at a reduced rate of 5% if the property is under 120 square meters and has a value under EUR 100,000. If the property exceeds these thresholds, the standard VAT rate of 19% applies.
- New Commercial Properties: Sales of new commercial constructions are generally subject to VAT at the standard rate of 19%. However, if both the seller and the buyer are VAT registered, the reverse charge mechanism may apply.
- Old Housing Units: The sale of older residential properties is exempt from VAT, but the seller has the option to apply VAT if desired. If VAT is applied, the same VAT rates and scenarios as for new constructions can be followed.
- Old Commercial Properties: The sale of older commercial properties is generally exempt from VAT. However, if both the seller and the buyer are VAT registered, the reverse charge mechanism may apply. There is also an option for the seller to apply VAT in certain cases, particularly if the booths seller and buyer are VAT registered.
- Agricultural Land: The sale of agricultural land is exempt from VAT. However, the seller has the option to apply VAT at the standard rate of 19% if desired. The reverse charge mechanism may apply if both the seller and the buyer are VAT registered.
- Land for Constructions: The sale of land for construction follows the VAT regime of the construction itself if both are registered with the same number in the land book and the construction is more valuable than the land. Otherwise, the sale of land for construction is taxable at the standard VAT rate of 19%. The reverse charge mechanism may apply if both the seller and the buyer are VAT registered.
It’s important to note that specific conditions, thresholds, and exemptions may apply,
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