VAT increase to 21% from August 1: more expensive apartments with up to 15,000 euros. Who will be the most affected?

The real estate market in Romania is about to go through a deep transformation from August 1, 2025, with the increase of VAT for new homes from 9% to 21%. The measure is part of the fiscal reform plan assumed by the government and will directly affect the final price of the housing, especially on the segment of up to 120,000 euros – the most sought after by Romanians with average income.

VAT ascends, prices explode

For homes that until now benefited from a reduced VAT rate of 9%, the cost difference will be felt immediately in the buyer's pocket. At an apartment of 100,000 euros, VAT increase will mean about 12,000 euros. For a home of 70,000 euros, the difference can reach 8,400 euros. Estimates of real estate agencies and developers indicate an average increase in 10,000–15,000 euros, depending on the area and the level of finishes.

“We are not just talking about a VAT difference of 12 percentage points, but about a chain effect on the entire construction process – from materials to services,” explains Gabriel Arteni, President of APAIR. The impact will be felt especially in new homes below 120,000 euros, which were eligible for the reduced share and represented the engine of residential transactions.

Who loses the most

The young people who dreamed of their first home purchased through the “New House” program are among the most affected. The program has fixed financing ceilings (maximum 140,000 euros, VAT included), and an increase in VAT means less affordable options.

According to the calculations, for a property with a maximum price without VAT of 120,000 euros (600,000 lei), which could have benefited from VAT capped at 9%, with the application of the 21%VAT rate, the increase cost of 130,800 euros, to 145,200 euros, which eliminates this type of properties from the maximum financing area through the Government program.

Basically, paying 140,000 euros, you will be able to buy a home with a net value without a maximum of 115,700 euros, which can be reflected in a lower residential comfort for the same amount spent.

At the same time, against the background of VAT growth, the necessary advance will be higher, and the monthly rate can increase significantly, which can remove some buyers from the eligibility area for mortgage loans.

Housing prices were already increasing

Data immobiliare.ro shows that, in the last year, the prices of the apartments have increased by 16% at national level. In Bucharest and Iași, the advance was 17-18%, and in Brasov with over 13%. In Cluj-Napoca, the city with the highest prices, new apartments cost on average over 3,200 euros/sqm.

The increase of VAT therefore comes on a fund already tense from the point of view of accessibility, and the analysts warn that the pressure will be transferred on the rent market, as many potential buyers will remain on the edge.

How much will you pay for after August 1?

For an apartment of 70,000 euros, which now benefit from 9%VAT, the final price is 76,300 euros. After the increase, the same apartment will cost 84,700 euros – over 8,000 euros more.

At a home of 100,000 euros, the difference is even clearer: from 109,000 euros, the price goes up to 121,000 euros. And if you target an apartment of 120,000 euros, you will pay in addition to almost 14,400 euros.

In other words, the same home will cost you 10-15% more, just because of VAT change.

What can you do to avoid this growth?

If you are looking for a home, you have a limited window to avoid VAT growth: sign a sale-purchase contract until August 1, 2025, pay the advance and make sure that the house will be delivered not later than August 1, 2026. Thus, you will continue to benefit from 9%VAT.

This exception can mean an economy of thousands of euros. Attention, however,: the house must be habitable in teaching, and you will no longer have purchased another home with a reduced VAT after January 1, 2023.

Conclusion

VAT increase to 21% for homes below 120,000 euros will bring increases in the order of thousands of euros for buyers, directly affecting access to homes, especially for those with average income. If you are thinking of buying a home in the near future, you only have a few days to take advantage of the low VAT. After August 1, your dream home could cost much more.

In this context, it is essential to make quick and informed decisions. On 123credit.ro, we help you quickly compare the best online credit offers, adapted to your income and profile, so you can act on time and efficiently for the purchase of the desired home.

It matters on our support to buy the desired home before VAT increase – simple, efficient, online and 100% free.