Wednesday, 23 July 2025
As Romania prepares for significant changes to its VAT regime affecting residential property, CIJ EUROPE reached out to three industry professionals for their perspectives in a focused Q&A. Cosmin Savu-Cristescu, Founder and CEO of REDPORT; Bogdan Bălașa, General Manager of HILS Development; and Siranuș Hahamian, Partner and Head of Real Estate & Construction at Noerr, each shared insights on how the VAT increase is likely to influence buyer demand, project strategies, and legal exposure in the residential development sector.
Mid-Segment Buyers Most Exposed
Cosmin Savu-Cristescu, founder and CEO of REDPORT, believes the mid-price segment will feel the effects of the VAT increase most acutely. “Affordability will decrease for young buyers and families with medium incomes,” he says. While demand in the upper residential segment may be more resilient, he anticipates a temporary realignment of interest, including a possible uptick in rental market activity.
Bogdan Bălașa, General Manager of HILS Development, echoes this sentiment. “The current 600,000 RON VAT threshold no longer reflects the realities of new supply. Buyers may delay purchases or reassess their budgets,” he explains. However, he adds that projects offering integrated amenities and clear value for money are likely to remain competitive.
Legal Risks and Compliance Pressures
From a legal perspective, Siranuș Hahamian, Partner and Head of Real Estate & Construction at Noerr, warns that rushed transactions to secure the lower 9% VAT rate could result in disputes. “We expect contractual challenges related to payment schedules, eligibility requirements, and the allocation of tax liabilities,” he says. Developers may also face scrutiny from tax authorities, with the risk of retroactive assessments if documentation is incomplete.
Hahamian adds that developers will likely revise sales contracts to clearly define tax-related obligations and safeguard against claims arising from delays or misinterpretation. “Ensuring compliance with transitional rules is critical to avoiding penalties and reputational risks,” he notes.
Project Adjustments Underway
Despite the uncertainty, developers are not anticipating dramatic shifts in direction. Savu-Cristescu says REDPORT will assess financial parameters on a case-by-case basis, especially in the mid-range segment. “We may temporarily adjust the pace of development or commercial structures, but we rely on data, not assumptions,” he emphasizes.
Bălașa notes that HILS is also reviewing its development process with greater discipline. “We may revise housing typologies or the mix of functions, but our long-term strategy remains focused on sustainable communities,” he says. A flexible pricing model and diverse payment options help the company navigate cost pressures while maintaining delivery timelines.
New Builds Remain a Strong Option
While a temporary shift toward the second-hand housing market is possible, all three experts agree that newly built homes remain attractive. “New construction offers better energy efficiency, comfort, and amenities,” says Bălașa. “We see continued demand for projects that meet today’s urban needs.”
Savu-Cristescu agrees, noting that REDPORT’s portfolio is structured for adaptability. “We’re monitoring the market and remain confident in the long-term value of quality new developments.”
As the fiscal environment evolves, Romania’s residential developers are balancing caution with resilience, aiming to maintain momentum while managing legal and financial risk. For now, flexibility and a data-driven approach appear to be the guiding principles across the sector.
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