BASIC GUIDELINES FOR BUYING PROPERTIES IN ROMANIA

MARKET GROWTH

Property - For 2005 we project market growth anywhere up to 40% with the likelihood of even this figure beeing excedeeded.

Land - For 2005 we project growth of up to 60% and once again even this may be excedeed. However, for a foreigner to purchase land in Romania they must, under Romanian Legislation, form a company in Romania. To set up a company costs approx 700 EURO plus VAT 19%. IMOBSHOP also offers this service to clients.

RENTAL RETURN

Rental return on investments is 8-10%

HOW SECURE IS MY PROPERTY

Romanian property title is extremely secure. There is a title search done with land registry to ensure you can take full title. The deed is presented to the court and judicial authorisation is given so you can take freehold and in the event that there are any unforseen charges judicial approval means they no longer attach to the property and any subsequent litigant must take their case against the vendor and not the purchaser.

ADDITIONAL COSTS

The agency commission is 3% which is clearly stated in all our contracts.With that 3% a lawyer is employed by us to help you "The Client" through the transaction. All other fees relevant to the purcahse including stamp duty, land registry and notarial fees should run to no more than 3.5% of the purchase price. A further 0.75% to 1% of the purchase price is necessary for withdrawal of funds from the bank ( bank commission ).

CAPITAL GAINS

Capital Gains Tax does not currently exist.

TRANSFER OF FUNDS

There are no problems in transferring funds to or from Romania. All transactions are subject to relevant bank charges.

BASIC GUIDELINES

Buying property in Romania need not be difficult, but it is important to follow some basic guidelines.

First and foremost:use a Romanian lawyer. It really is essential you use a Romanian lawyer.Try and choose one that can communicate with you in your own language so you can ask your questions and know you can understand the answers clearly.Within our 3% commission a lawyer is employed by us to help you through you property transaction. Our company is always happy to recommend a lawyer if you don't have one.

There are a certain number of documents that your lawyer must ensure are in order before you complete a purchase:

       The seller's own title deed. This is the registered title deed of the property.In this little deed you will find a description of the property, the details of the owner, if there is a mortgage or court embargo existing on the property.

       The receipt of the owner's annual property tax. This receipt is very important for two reasons. First, it will provide proof that there are no outstanding taxes due to one property. Ideally, with an old property you should ask to see the last year's receipts. Second, the receipt will show you the property's cadastral reference number. This is very important because various taxes are based on it.

       The cadastral certificate. It is a second system of property registration which concentrates on the location and exact boundaries of the property.The certification comes in two parts, one being a description in words of the property, the other a graphic representation, either by a plan or aerial photograph.