Real estate prices may grow on VAT introduction

VAT payment for legal persons buying and selling real estate properties will put pressure on prices and will indirectly cause a price growth, real estate market analysts estimate. Effects may also expend to natural persons, same analysts say. On the other hand, the new obligation may be rejected by the Parliament and be applied only until spring.

Diana Coroaba, Senior Tax Manager within PricewaterhouseCoopers explained that VAT introduction should not affect the price, since it is not a cost but, on the other hand, the real cost will grow by the same amount as the acquisition financing effort.

Due to the recent introduction of VAT in real estate transactions between legal persons, deals made in 2007 may also be subject to taxation.