📅 New VAT Rules in the Construction Sector Effective from July 1, 2025

Starting July 1, 2025, the Fiscal Code has been amended through an Emergency Ordinance, and the new provisions directly impact the VAT regime in the construction sector.

The most significant change concerns the application of the reduced 5% VAT rate, now limited only to residential properties valued at up to €120,000, provided that the beneficiary has not previously taken advantage of this regime. Previously, the threshold was €140,000, which significantly narrows eligibility for residential projects.

This measure was justified by the government as necessary to balance the state budget and to prevent the misuse of the preferential VAT regime.

In addition, clear rules have been introduced regarding the required documentation and reporting deadlines for developers, including the obligation to electronically submit declarations of conformity for each transaction applying the reduced VAT rate.

Industry experts warn of a potential slowdown in real estate sales and emphasize the need to adapt business models, particularly for projects currently under authorization or construction.

It is strongly recommended to regularly consult the instructions published by ANAF (National Agency for Fiscal Administration) and to work closely with tax professionals in order to avoid interpretation errors and potential penalties.

📸 (Photo: AI Generated)