Property tax extemption for rehabilitated residential buildings in Romania

October 5, 2011 at 7:06 pm | Posted in Legislative Outreach | 2 Comments
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Starting with July 2011, a new law  that approves the famous 18/2009 GO regarding the thermal rehabilitation of blocks of flats, introduces the property tax exemption for owners who rehabilitate their buildings. The exemption period is of minimum 7 years and is applicable only if the owner covered the expenses of rehabilitation (her)/himself and only if he/she obtained an energy audit before the rehabilitation and can prove that the auditor’s recomendations were implemented.

The measure is  very welcomed, but RoGBC hopes that this is just the beginning of further similar measures that address also the commercial/office sector of the market as well . It is well known that the property taxes for residential houses/apartments are very low and can’t motivate alone a decision for rehabilitation. So if the national/local government’s strategy with this measure is to motivate building owners to improve the quality of their buildings and reduce energy consumption, the big building owners should be targeted as well.

In a research made by RoGBC on Local Measures to Attract Investments in Green Buildings we identified the most effective local measures that could motivate developers to build green and/or renovate existing buildings at green standards. When it comes for financial measures, the property tax reduction and a discount of the building permit fee were on top of the list.

Local public authorities have the possibility to create such tools since according to the Fiscal Code they can establish the level of property tax  somewhere between 0.5 -1.5% per year from the value of the building.   Asking for tax reductions and exemptions in a challenged economic period might look too courageous,  some may say…..not also if you consider the increased value of the building if it obtains a voluntary environmental certification or at least an A in the Energy Performance Certificate ( EPC’s are mandatory anyway). Building green does not mean only energy efficiency, but for now this is the best regulated area by mandatory laws.

There are also the other benefits that come with building green such as higher level of productivity of the employees, reduced sickness days, higher retention rate, better comfort etc…not to leave aside the potential for creating new jobs and stimulating the local economy since a lot of services and solutions have to be sourced locally.

What do you think?

Anca Bieru


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  1. hello, i just read this and i hope i got t right, and what i understand is this, raise taxes so we can “motivate developers to build green” – this is constraint not motivation
    so my opinion is to look the other way, a way to lower the cost of building green, this is a way of motivation for building green
    best regards,

  2. Hi Iulian,

    First of all – thank you for your comment. In this case – the property tax exemption introduced by law 158/2011 – is applicable for the residential segment – property owners (apartment owners) that renovate/ thermal rehabilitate their buildings. I wouldn’t call it a tax exemption for green buildings – but rather a small incentive for people who want to invest in energy efficiency measures in their buildings in order to pay lower bills. It is a way to stimulate thermal rehabilitation beyond the scope of the existing state funded program. Not everybody can receive the grant (there is not enough money to include everybody) so this is the benefit you get if you pay for the rehabilitation yourself. Big developers are not covered here.
    Also – regarding your comment with the cost of green buildings – given the fact that in our country the big developers are not supported/encouraged with proper state mechanisms/measures/incentives to develop green buildings – I would say that the ones who decide to go green, do that because it makes sense from the financial point of view too.


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