Taxation of real estate (apartments, houses) at market value, which would have led to significant tax increases in more developed and higher-priced localities, will be postponed until January 1, 2026, states an emergency ordinance adopted today by Government.
The increase of property taxes, by taxing them at a value correlated with the market value, is also among the objectives established within the PNRR.
“Since the fulfillment of the commitment in the PNRR regarding property taxation also requires the development of an IT system that allows the implementation of specific models, combined with the fact that technical assistance from the World Bank is underway, it is proposed to extend the deadline for the application of the provisions from the Government Ordinance no. 16/2022 regarding the amendment of Title IX – Local taxes from the Fiscal Code, from January 1, 2025 to January 1, 2026″, the Ministry of Finance says in the draft prepared for the Government meeting.
A structure responsible for the implementation of the property tax reform will be established within the Ministry of Finance. The specialized structure has, mainly, attributions regarding the management of a comprehensive national database with real estate properties, collaboration with administrative-territorial units, as well as with other entities regarding property data and information, the creation and implementation of specific models regarding the taxation of real estate, the methodological coordination of local fiscal bodies with regard to the specific procedures carried out within the administration activity regarding the taxation of real estate, the elaboration of the specific forms for the administration of fiscal receivables related to the taxation of real estate.
The Minister of Finance, Marcel Boloș, had stated as early as August that the system required to implement market value taxation will not be ready this year, so the postponement is necessary.
Proposal for the gradual reduction of microenterprise threshold from 2027 to 2029
The European Commission has proposed to Romania that the reduction of the tax threshold for micro-enterprises, applied on income, be done gradually in the period 2027-2029, said Prime Minister Marcel Ciolacu. However, the approval of the Coalition is necessary for the adoption of the Commission’s proposal.
According to the prime minister, if an agreement is reached with the EC for this gradual reduction of the threshold to micro, currently 500,000 euros, the modification in the Fiscal Code could be operated in 2026, and the reduction of the threshold should take place in the years 2027, 2028 and 2029.
The Prime Minister stated that the implementation of this calendar, as proposed by the Commission, would lead to the unlocking of the sum of 330 million euros from the PNRR, related to the milestone for the micro and currently suspended.
The entry threshold for micro-enterprises is one of the points of divergence within the Coalition, the PNL being more rigid regarding possible restrictions of this fiscal regime, in the context in which it would affect the right-wing electorate to a greater extent.
A large number of companies prefer microenterprise income taxation, as taxation is lower and simpler. The micro-enterprise regime is part of milestone 206, which is included in payment request number 3 of the National Recovery and Resilience Plan (PNRR), worth almost 2.7 billion euros.
Currently, the Commission considers the milestone unfulfilled because Romania has not sufficiently reduced the area of applicability of the micro regime.
The government still has six months to meet the milestone and still receive the amount, now suspended. Starting this year, the government applied a series of restrictions on micro-enterprise taxation, such as higher taxation for some activities, limiting to 1 the number of micro-enterprises in which a shareholder can own more than 25% and setting the ceiling of 500,000 euros in the case of related enterprises.
Although the restrictions have led to a significant decrease in the number of micros, the decline is not considered sufficient by the Commission.
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