Do you buy or rent? VAT increasing to 21% comes with increases in thousands of euros in new apartments, but also with rents growth

The increase of new homes hits directly in the middle class. From August 1, the VAT for new apartments increases from 9% to 21%, and the price of an apartment of 100,000 euros without VAT climbs by 12,000 euros overnight. Developers say that VAT increase comes at an unfavorable moment for the market: the construction costs are already high, the number of deliveries has decreased by 15–20% compared to last year, and the lack of tax predictability affects the confidence of the buyers.

Couple moving to the house new photo source: shutterstock

Until August 1, new homes with a price below 600,000 lei (about 120,000 euros), purchased by natural persons, benefited from a reduced VAT rate of 9%. After the new legislation came into force, this share increases to 21% for all new homes, regardless of price.

“The new VAT change for real estate will have a direct impact, the most affected being the buyers of the accessible housing. For example, for an apartment of 100,000 euros without VAT, the final price will increase by 12,000 euros (121,000 vs. 109,000). The prices of the new units have already had an accelerated increase in the last five years. 51% at 94% in the big cities: Bucharest, Timișoara, Iași, Constanța, Cluj-Napoca and Brașov ”, Explain, for Adevărul, Despina Ponomarenco, president of Bucharest Real Estate Club (BREC).

Under the conditions of VAT increase, but also to decrease the number of deliveries by 15-20% in Bucharest and at national level, the price pressure will be increasing, she adds.

“We will see accelerated rents”

“The last quarter of 2025 will show us to what extent the market will be able to absorb the new price increases. The evolution of the sale prices for the last five years for the new housing reflects the relationship between demand and supply, as well as the economic development of Romania: Infrastructure investments, the development of the big regional centers as magnet cities, which attract new inhabitants,” says Despina Ponomarenco.

In fact, the rents have also had increases in recent years, but under the increases of sale prices. “Taking into account the current context, we estimate that much of the demand that will not be financially qualified for the purchase of a new apartment will move to the rents. We will probably see in the next five years accelerated rents, similar to those of the sale prices of the last five years,” Complete the BREC President.

Bogdan Bălașa, General Manager Hils Development, seems to be the same opinion. Increasing the cost of life, including expensive utilities, will influence the rent market in the sense of gradual tariff adjustment, especially in large cities and well connected areas, he believes. “The demand on the rental segment could increase, in parallel with a temporary slowdown in purchases, especially among young people or those without advance. At payment variants in installments or options for housing in advanced stage of execution, with teaching in 2026-2027 ”, support it.

“We are witnessing a repositioning of the market”

In his opinion, the prices of the new homes in the big cities reflect, at this moment, the reality of the market: a constant demand, against the background of a real need for living, but also a high level of development costs. “It is important to distinguish between a market correction and an increase in external factors, such as taxation, inflation or increase of financing costs. We do not witness an overvaluation, but to a repositioning of the market according to the cumulative economic pressure of the last years. Additional investments that are inevitably reflected in the final price ”he continues.

Sergiu Mutru, the realistic co-founder Estate Agency says that we will see an increase in prices for prices below 600,000 RON, which until now benefited from 9%reduced VAT. “The profit of the developers is not very high, and the increase of the VAT and other additional costs would be difficult to cover. We believe that, in the short term, this increase could reduce the interest of the buyers, but the market will not stop. In addition, the developers will try to find a balance between price and demand to maintain the active market, so that this increase will be moderate.” he confesses, for the truth.

The prices in the big cities reflect the demand and offer on the market. “We do not see large negotiation differences, which shows that the market is balanced. Each complex offers different utilities and facilities and it is natural that depending on the needs of each buyer the real estate agents will make a more detailed analysis and a correct evaluation. And the lifestyle, so it is expected that some tenants and buyers choose more accessible variants. Concludes Sergiu Mutruc.

According to the latest survey conducted in 2025 by Io Partners and Storia, the interest in acquiring a home increased significantly compared to 2023, from 37% to 59%, while the interest for rent decreased from 48% to 27%. This reconfiguration of the demand is on account of the interest stabilization and the perception that a monthly rate can be comparable to the rent. The purchase is increasingly seen as a stability solution, even among those with income below 8,000 lei per household.

What is they looking for?

Customers interested in renting a home in the next 12 months prefer two -room apartments (41% of the total), followed by studios (34%), 3 -room apartments (15%), the remaining 10% being large apartments (4+ rooms) and houses.

As for the purchase, the top is also dominated by two -room apartments (29%), followed at a short distance from 3 rooms (27%) and houses (25%). The smallest weights at have studios (11%) and large apartments (8%).

Compared to 2023, the interest for large apartments (3+ rooms) and houses, both on purchase and rent, have increased, while the demand for studios and two -room apartments is decreasing, a sign that space and comfort have become a priority.

However, if the increases generated by VAT will exceed the accessibility thresholds, part of this purchase -oriented request could temporarily return to the rental segment, a trend that the market players take into account.