I want to draw attention to the great danger in Regulation 16, which is unlikely to be amended in Parliament. Until now, local councils could set rates between a minimum and a maximum. From now on, the maximum disappears, said lawyer Gabriel Birish, partner of Goran Birish.

“It is a minimum of 0.1% for residential and a minimum of 0.5% for non-residential,” he said (see Article 110 OG 16/2022, which amends Article 460).

• “How much is the maximum? If we look at the IMF research, we see that in the vast majority of UAZ local councils have gone to the minimum for individuals and to the maximum possible for legal entities, in most cases.”

“We used to have situations when the percentage increase of 20%, as it was then, was applied in a cascade, because some people understood it. Now it’s 1.5 + 20%, next year it’s 1.8 + 20% and somewhere in the west of the country we’ve reached 5% of taxes,” he said.

In his opinion, the percentages seem small, but when we are talking about buildings, a 5% tax doubles the rent.

“The impact will be devastating not on owners, but on tenants, mostly small and medium-sized businesses, who, in addition to rent and utilities, also pay tax. Abolishing the maximum ceiling, leaving the level of taxation for companies at the discretion of the local legislator (I don’t care about individuals, because they vote) is a big danger for the business environment in Romania,” explained Gabriel Biris.

Avoiding responsibility from the political environment

“In the parliament, notary nets are canceled and those fixed amounts stipulated by the tax code are increased, depending on the type of building. And this is hypocrisy. We need to understand where this constant running away comes from. From shirking responsibility,” he said.

• “Do local authorities need additional income? Of course, they are needed. They also increased salaries, they hired a lot of people. Naturally, they need additional income, especially from those they can count on as local taxes. They will if they raise taxes. ? No, because it upsets voters.”

“Politicians who thought: they say we are raising the age, but not us, that we mean the network of notaries, and everyone will perceive that it is because of notaries. It was impossible. In the vast majority of UNPs, local councils go for the minimum rate and can raise it, that is, from 0.08 to 0.2% – this is a 150% increase. They could have appealed this decision, but they didn’t want to. They pushed the decision to parliament and raised 50% for everyone from the year. This is a much better solution than the existing one in Decree 16,” said Gabriel Birish.

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How much will property taxes increase under the new proposal / Two examples: an apartment in Bucharest and a house in Cluj