3 Mistakes Real Estate Investors Make in Romania (And How to Avoid Them)

Introduction: Why Investing in Romanian Real Estate Requires More Than Capital

Romania’s real estate market has attracted growing interest from both local and foreign investors due to its competitive prices, high rental yields, and urban development potential.

However, numerous investments fail—not due to poor market timing, but because of legal and practical oversights.

This article investigates 3 common mistakes real estate investors make in Romania and what steps you can take to avoid them, whether you're planning to buy land, residential units, or commercial properties.

1. Skipping Due Diligence Before Purchasing Land or Buildings

The Mistake:

Many investors rely solely on the seller’s promises or superficial checks. They do not verify ownership history, urban planning status (PUZ/PUG), encumbrances, or zoning regulations.

Why It Matters:

• The land may not be buildable, even if it looks “perfect” on paper.

• Hidden mortgages, lawsuits or administrative issues can delay or invalidate your investment.

• You risk being unable to obtain permits for construction or renovation.

  
  

How to Avoid It:

• Request a full legal due diligence report before signing any contract.

• Check the Urbanism Certificate (Certificat de Urbanism) to confirm permitted uses.

• Verify land book extracts (Extras de Carte Funciară), property tax status, and any pending disputes.

  
  

🟡 Tip: Work with a lawyer familiar with Romanian property law and local administrative practices, not just a notary.

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2. Overlooking Legal Compliance When Renovating or Building

The Mistake:

Investors start renovation or construction projects without understanding the permitting requirements, leading to fines, work stoppage, or post-factum demolition orders.

Why It Matters:

• Even "minor" modifications often require permits.

• Some areas have historical protection zones or strict architectural rules.

• Working with unauthorized builders or ignoring permit timelines is heavily penalized.

  Read more about this here.

How to Avoid It:

• Get an urban planning certificate and building permit (autorizație de construire) before initiating any work.

• Consult an architect and a lawyer about the compliance steps needed.

• If the property is rented during renovation, check how works impact your lease agreement or tenant rights.

3. Misunderstanding the Tax and Ownership Structure

The Mistake:

Buying real estate through a company or as an individual, without considering the fiscal implications, VAT regime, or long-term exit strategy.

Why It Matters:

• Using the wrong structure can lead to double taxation, high capital gains taxes, or operational restrictions.

• Foreign investors often misunderstand residency obligations or corporate tax filing when holding property through an SPV.

How to Avoid It:

• Consult a lawyer and an accountant before setting up the investment structure.

• Clarify whether VAT applies to the transaction (especially in new builds or land).

• Plan for exit scenarios: selling the asset, transferring shares, or asset leasing.

🟡 Tip: Real estate held through a Romanian company has different fiscal reporting obligations, including for non-residents.

Final Thoughts: Professional Legal Advice = Long-Term Stability

Real estate investment in Romania can be highly profitable—but only if handled with a strong understanding of local laws, zoning restrictions, and tax frameworks.

The real cost often lies not in buying the wrong asset, but in failing to structure and manage it correctly.

Need Legal Support for Your Investment?

Whether you're at the stage of exploring opportunities or facing issues with a current property, we can help.

🔹 Get legal due diligence before you sign

🔹 Structure your ownership correctly

🔹 Ensure full compliance with Romanian building and urban planning law

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