VAT on housing in 2026: how much it will really cost you from August

From 19% to 21%: what happens to VAT on housing in 2026

In 2026, the discussion about VAT on housing is no longer just a technical detail, but a factor that can make the difference between an affordable installment and one that is hard to sustain. The standard VAT rate was increased to 21% starting from August 1, 2025, according to the law on certain fiscal and budgetary measures that amended the Fiscal Code, and this rate applies to all housing deliveries that do not fall under a reduced rate regime or a transitional provision.

In parallel, the state has temporarily kept a safety net for buyers of new homes by maintaining, until July 31, 2026, the reduced rate of 9% for certain transactions that meet strict conditions set by the Fiscal Code and detailed in ANAF guides and in interpretations by tax specialists. This reduced regime coexists with the standard rate of 21%, which makes the period August 1, 2025 – July 31, 2026 a complex transition phase for the residential market.

Between August 1, 2025 and July 31, 2026, some buyers of new homes can still pay 9% VAT, but all others will already bear the standard rate of 21%.

The reduced 9% VAT rate on housing: strict conditions and the deadline of July 31, 2026

The basic rule is as follows: in the period August 1, 2025 – July 31, 2026, an individual can purchase a single dwelling with a reduced VAT of 9%, if the conditions in the Fiscal Code and ANAF regulations are cumulatively met. A summary document published by ANAF on VAT rates in 2025 shows that this reduced rate applies to dwellings that do not exceed the value of 600,000 lei excluding VAT, have a usable floor area of at most 120 sq m and are delivered to individuals as dwellings that can be inhabited as such.

In addition, for the 9% VAT to remain applicable after the increase of the standard rate to 21%, the transitional conditions must be observed. Material from Agerpres quoting explanations from tax consultants shows that in the period August 1, 2025 – July 31, 2026 the reduced rate of 9% can be maintained only if:

• the contract (pre-contract / promise of sale and purchase) was validly concluded by August 1, 2025;
• the contract expressly provides for payment of a down payment, and for contracts signed between July 3 – July 31, 2025 the minimum down payment is 20% of the value of the dwelling, excluding VAT, paid in full by July 31, 2025;
• the dwelling is effectively delivered by July 31, 2026 and can be inhabited as such at the time of delivery;
• the buyer has not purchased, starting from January 1, 2023, another dwelling with a reduced rate (5% or 9%).

These conditions follow both from the summary published by ANAF on VAT rates and from the Agerpres article dedicated to the context of the increase of the rate to 21% and the temporary preservation of the 9% rate for certain pre-contracts, which quotes PwC consultants.

Pre-contracts, down payments and the “window” July 3, 2025 – July 31, 2026

The major difference between those who signed pre-contracts before August 1, 2025 and those who enter the market after this date lies precisely in the VAT treatment. Several real estate and financial analyses explain that, in order to benefit from 9% VAT until July 31, 2026, it is not enough to have signed a pre-contract at any time in the past, but it must be valid, provide for a down payment, and for the period July 3 – July 31, 2025 a down payment of at least 20% of the value of the dwelling excluding VAT must have been paid by July 31, 2025.

A numerical example helps to understand what is at stake: for a dwelling priced at 600,000 lei excluding VAT, the 9% rate means VAT of 54,000 lei, therefore a total of 654,000 lei. For the same dwelling, with 21% VAT, the tax rises to 126,000 lei, and the total price reaches 726,000 lei. We are talking about a difference of 72,000 lei, which is directly reflected in the amount that the buyer must finance through a loan or from own funds.

Financial education websites such as FinRadar have explained, using similar examples, that increasing VAT to 21% radically changes the calculation for those targeting the segment of new dwellings under the 600,000 lei threshold, where previously the difference between the reduced and standard rate was smaller, in the context of a 19% standard rate.

Who can still get reduced VAT after August 1, 2026 and what happens to the 600,000 lei cap

The period up to July 31, 2026 is a transitional one. ANAF guides and specialist summaries show that after this date, in the absence of new legislative intervention, the transitional facilities disappear, and for dwellings delivered afterwards the general rules in the Fiscal Code applicable at that time will matter. Currently, fiscal documents indicate the preservation of the 600,000 lei threshold excluding VAT and of the condition regarding the maximum 120 sq m surface for applying the reduced 9% rate to dwellings as part of social policy, but in the absence of a valid pre-contract concluded before August 1, 2025 and the required down payment, these provisions can no longer “freeze” VAT below 21% for deliveries after July 31, 2026.

Experts quoted by Agerpres, as well as analysis articles published by real estate and financial platforms, underline that, from the buyer’s perspective, the 2025–2026 period is the last certain window in which one can still speak of a genuinely reduced VAT on new dwellings, provided that a pre-contract and a significant down payment are undertaken before August 1, 2025 and the delivery deadline of July 31, 2026 is observed.

In the absence of a new law introducing another reduced rate or another protection mechanism, after this date, the standard 21% rate will become the rule for the vast majority of transactions involving new dwellings, and the 9% rate will remain applicable only within the limits and for the situations expressly provided by the Fiscal Code, without additional protections for future pre-contracts.

How much more you will actually pay: impact on installments, rents and yields

The 12 percentage point difference between 9% VAT and 21% VAT is significant in the residential market. For the individual buyer, the immediate impact is on the total price of the dwelling. The example above with the 600,000 lei dwelling excluding VAT translates into an extra 72,000 lei on the final price.

For a 30 year mortgage loan, with a fixed interest rate of, for example, 6% per year, an increase of 72,000 lei in the amount borrowed translates, according to the usual calculations used by banks and presented in lending guides, into an increase of the monthly installment by approximately 430–450 lei. For a buyer with average income, this extra amount can mean the difference between eligibility and refusal of the loan.

For investors, higher VAT is reflected in yields. An apartment which, with the reduced VAT, had a total price of 654,000 lei and was rented out for 3,000 lei/month had a gross yield of approximately 5.5% per year. The same apartment, purchased for 726,000 lei but rented at the same level of 3,000 lei, sees its gross yield fall towards 5% per year. To maintain the same yield, the rent would have to be increased, which puts additional pressure on the rental market in 2026 and in the following years.

Last but not least, the increase in VAT also influences developers’ behaviour. They can choose to absorb part of the additional cost in their margin or pass it on entirely to the buyer. Recent financial analyses show, however, that in the context of rising construction and financing costs, the room for absorption is limited, which makes it likely that a significant part of the VAT increase will be transferred to the final price.

What you should do now if you want to buy a new home

For buyers on the verge of a decision, 2026 is not a year in which it is worth postponing the analysis. On the contrary, this is the moment to carefully check all the tax details of the transaction:

• check whether the developer can invoice at 9% VAT and ask for the legal and tax reasoning in writing, preferably with a reference to the article in the Fiscal Code and to the ANAF guide;
• analyze whether your pre-contract falls within the transitional rules: date of signing, amount and date of payment of the down payment, delivery deadline;
• request a loan simulation that includes both VAT scenarios (9% and 21%), to see whether you are still eligible and what the monthly installment would rise to;
• take into account that, if the dwelling is not completed and delivered by July 31, 2026, there is a risk you will lose the reduced rate and move to 21% VAT, even if you initially had a pre-contract;
• discuss with the notary and, if necessary, with an independent tax consultant to clarify any discrepancies between the developer’s commercial promises and the letter of the law.

In a market where the cost of money remains high and affordability margins are already tight, optimizing VAT can make the difference between managing to buy now or having to postpone the decision indefinitely.

Sources

• Legea nr. 296/2023 privind unele măsuri fiscal bugetare și pentru modificarea și completarea unor acte normative
• ANAF – Principalele modificări privind cotele de TVA (document informativ 2025)
• AGERPRES – Luna august vine cu majorarea TVA și a accizelor (iulie 2025)
• AGERPRES – În ce condiții mai pot fi achizitionate locuințe cu TVA de 9%, după ce taxa crește la 21%
• FinRadar – Locuințe cu cotă redusă de TVA: care sunt condițiile