Looking for best advice on rental income taxation in Romania? Are you trying to get some tips on efficient reporting of your rental income in Romania, and still can’t get it?
In this article, our team of tax consultants provides best practical tips for rental income reporting in Romania, so you can apply the most efficient tax reporting methods. And in the same time, you will be able to report your rental income correctly, and comply with the latest changes in the Romanian tax law. Our article is useful to both Romanian tax residents or foreign real estate investors.
Rental income taxation in Romania – applicable tax rates
Rental income generated from renting out any type of dwelling place – e.g. apartment or house – is an income subject to taxation in Romania. According to the Romanian tax law provisions, the income derived from rent is included in the broader category of “income generated from the assignment of use of goods”. Such goods can be of different types, such as: apartments, houses, office space, land, cars, or other.
Thus, as per the tax law in force, individuals who obtain such income have certain tax reporting obligations toward the Romanian tax authorities (ANAF).
IMPORTANT: Whenever the rental agreement is signed between individuals (i.e., the tenant is an individual and not a legal person), any tax reporting obligation for such income (income from rent) stays with the beneficiary of income (landlord), and not with the payer of the income (the tenant). Therefore, in such situation, it is always the obligation of the landlord to report and pay all due taxes, through the annual tax return.
If the tenant is a Romanian legal person (for example a Romanian company or a Romanian agency), there may be an obligation for the tenant to withhold the income tax (10%) and pay it to the state budget instead of reporting by the landlord.
Taxes that are applicable on rental income in Romania for year 2026 are:
- income tax: 10% (flat tax rate)
- health fund contribution, applicable only if the annual personal net income accumulated from certain types of income, such as rental income, capital gains, dividends, interest, income from other sources, etc. is at least equal to 6 monthly minimum national wages; for year 2026, this threshold is set at 24,300 LEI/year.
If the above threshold is reached, either by one or by several types of income, the health insurance contribution is capped at 10% out of the following thresholds, depending on the total level of your personal income during the entire year:
- First threshold: 6 minimum national gross salaries (i.e., 6 x 4,050 lei = 24,300 lei), if the total annual income is between 6 and 12 minimum national gross salaries (between 24,300 and 48,600 lei);
- Second threshold: 12 minimum national gross salaries (i.e., 12 x 4,050 lei = 48,600 lei), if the total annual income is between 12 and 24 minimum national gross salaries (between 48,600 and 97,200 lei);
- Third threshold (and last): 24 minimum national gross salaries (i.e., 24 x 4,050 lei = 97,200 lei), if the total annual income is at least equal to 24 minimum national gross salaries (97,200 lei).
So, the health insurance contribution is typically a fixed percentage of the minimum national wage multiplied by 12, rather than a percentage of your actual rental income. Therefore, the way it is calculated can change from year to year if the minimum national wage also increases.
We will explain further how these two taxes must be calculated, as they do not apply on the entire income as such, but certain deductible expenses can apply.
Who calculates and pays the rental income tax?
When the tenant is an individual
If the rent is paid by an individual who does not have an accounting and withholding obligation, the landlord is responsible for calculating, declaring and paying the annual income tax.
The landlord must determine the annual gross rental income, apply the statutory 20% lump-sum deduction and calculate the 10% income tax on the resulting net income. The tax must be reported through the annual tax return and paid by the statutory deadline, as further explained below.
When the tenant is a Romanian company
Different rules apply when the rent is paid by a Romanian legal entity or other type of entity which is required to keep accounting records. In this situation, the payer must determine the taxable net income at the time of each payment by deducting the statutory 20% expense allowance from the gross rent. The payer then must withhold the 10% income tax from the resulting net amount.
Consequently, the withholding tax normally represents 8% of the gross contractual rent:
Gross rent × 80% taxable proportion × 10% income tax = 8% of the gross rent
The company must declare and pay the withholding tax by the 25th day of the month following the month in which the tax was withheld. It must also comply with the applicable annual information-reporting obligations. The tax withheld at source is final for Romanian income-tax purposes.
At the landlord’s request, the payer has the obligation to provide a document showing the rental income paid and the income tax withheld and transferred to the Romanian state budget.
Tax reporting obligations for the rental income
1. Registering the rental agreement with the tax authorities (ANAF)
Signing a rental agreement gives rise to a contract-registration obligation. Individuals deriving income from the rental of personal assets must generally register the rental agreement with the competent Romanian tax authority within 30 days from the date on which the agreement is concluded. Any subsequent amendment or termination must also be registered within 30 days from the relevant change.
The registration must be fulfilled through the Form C168, together with a copy of the rental agreement or the relevant amendment document. The registration can generally be completed electronically through the taxpayer’s Private Virtual Space account – “Spațiul Privat Virtual” or through the other submission methods accepted by ANAF.
If the rented property is jointly owned, the rental agreement or subsequent amendment can designate the owner, usufructuary or other legal holder responsible for registering the agreement with ANAF.
This 30-day requirement relates only to the registration of the agreement. The rental income itself must be normally reported after the end of the calendar year, based on the income actually earned during the year.
! Important distinction
Registering the rental agreement and declaring the rental income for tax reporting are two separate obligations:
– Registering the agreement: must be done within 30 days from signing, amending or terminating the agreement;
– Tax reporting – must be done by 25 May of the following year, based on the income actually earned.
Once the agreement has been registered, the next step is to determine when you must declare the income and pay the corresponding taxes.
2. Annual tax reporting, after year end
The next and final reporting deadline for the rental income taxation in Romania is after end of the tax year (i.e. calendar year). This is the annual tax return filing deadline, which applies to all types of income, other than salary. For the tax year 2026 the deadline is 25 May 2027.
The annual tax return can be submitted to the tax authorities through electronic means, as follows:
- by opening a virtual private account (SPV) on the Romanian tax office’s website,
or
- by signing the tax return with a digital signature, and submitting it on the website e-guvernare.ro.
Alternatively, the tax form can also be filed in hard copy, directly at the local tax office where you legally reside (where you have your domicile, or your living address, as per the case). However, we do not recommend this alternative, as the online filing is the easiest and the most efficient solution.
How to calculate the taxes due
Now let’s get to the method of calculation of the taxes. As already mentioned, the Romanian taxes due on rental income are not applied to the total gross income that a person derives. There is a expense deductibility method that applies.
More exactly, for year 2026, for determining the taxable base the individual is allowed to deduct from the annual gross income a lump-sum of 20% (to account for any expenses with the property, such as: property taxes, renovation or repairing expenses, property insurance, or other related expenses). The deduction of 20% lump-sum is considered to cover for any potential expenses related to the property one may incur during a year. Other expenses are not allowed for deduction.
Historically, Romania had a lump-sum deduction system for maintenance and repair expenses linked to the rented property. However, changes in tax legislation over the years have modified the way these deductions work. So, it is always important to check the latest tax law provisions or consult a tax expert to see if you can still claim a fixed expense deduction or if you need to document your actual expenses.
Some property owners are unaware of these updates and might continue to rely on outdated rules, which can lead to incorrect tax reporting of the income.
Example:
As way of example, let’s assume one would derive rental income during year 2026 in total amount of 50,000 lei, and would incur deductible expenses in the amount of 15,000 lei. Out of this amount you would be allowed to deduct for income tax calculation only 20%, which means an amount of 10,000 lei.
Thus, the net taxable base will be 40,000 lei. This means that the income tax due will be in amount of 4,000 lei (10% of the taxable base).
Given that the taxable base determined of 40,000 lei is higher than the minimum threshold established for the payment of the health insurance contribution (24,300 lei for year 2026), then health insurance contribution will also be due in this specific example. As shown above, since the taxable income is between 24,300 and 48,600 lei, the health insurance contribution will be calculated as 10% of 24,300 lei. So, the contribution due will be in amount of 2,430 lei.
As consequence, the taxes payable for year 2026 will be:
- income tax: 4,000 lei
- health fund contribution: 2,430 lei
The deadline for paying the taxes due on rental income is the same with the tax return filing deadline – i.e. for year 2026 it will be 25 May 2027.
Differences in tax regime
Many property owners initially assume that rental income taxation in Romania is the same across all property or rental types. In reality, there can be differences based on whether the rental is long-term, short-term (including through platforms like Airbnb or Booking), or if the property owner offers additional services beyond the simple rental of space (meals, cleaning services, etc.).
A short-term rental that provides also breakfast or housekeeping services, for instance, might be treated differently from a simple lease. This is one reason why clarifying your specific type of rental activities is very important. If you offer lodging services like a hotel or a guesthouse, certain business tax requirements might come into play, such as charging VAT under specific circumstances or registering as a particular type of business.
