The increase in VAT to 21% for new homes is having a direct impact on pricing and sales strategies in the residential market, with effects already becoming visible, according to Valentin Neagu, Managing Director at Crosspoint Real Estate.
The major impact will be felt in the mass-market segment, where the stock of homes under €120,000 was already limited. However, the medium and premium segments, which were already subject to the standard VAT rate, will be affected by a general rise in construction costs.
"The difference from 9% to 21% is too large for developers to absorb fully without affecting their margins. Currently, price increases can no longer be called speculative; they are dictated by the reality of higher costs for energy, utilities, and construction materials," said Neagu.
The tax changes come against a backdrop of already declining demand in the first seven months of 2025, with transaction volumes in Bucharest 6.8% lower than in the same period in 2024. Despite this, July saw a significant surge in sales as buyers rushed to finalise transactions before the new VAT rate came into effect.
Nationally, apartment sales increased by 16.7% in July 2025 compared to July 2024, with notable gains in major regional hubs such as Cluj (+20.2%), Iași (+27.3%), and Timiș (+15.4%).
Neagu added: "No other year has recorded such a high volume of sales in July as 2025, surpassing even the record-setting years of 2021 and 2022."
In the rental market, an estimated increase of over 10% in Bucharest and other major cities by the end of the year reflects both cost pressures and shifts in consumer behaviour.
