It freezes inflation by investing smartly in real estate. Until December 31st you can block 5% VAT for apartments up to 140,000 euros

The National Bank of Romania forecasted an inflation of at least 15% by the end of the year, on the background of the galloping increase in tariffs on energy, fuels, food, but also the increase in the price of other goods and services. This also means a sharp devaluation of bank deposits, where the interest offered does not cover even half of the inflation rate, not to mention commissions and taxes. Given the galloping pace of inflation, investment in real estate continues to remain some of the most profitable.

Investing in real estate protects you from inflation

At the end of the year, this type of investment is also favored, in the short term, by the legislative changes that will enter into force from January 1, 2023. The new provisions guarantee those who sign a contract or pre-contract of sale-purchase to maintain the reduced VAT of 5% and for housing units worth up to 140,000 euros.

The rule will change after January 1, 2023, when the VAT on housing units whose value exceeds 120,000 euros will be 19%.

The legislative changes benefit those who, by the end of the year, will now sign a contract (or pre-contract) for a construction with a value of up to 140,000 euros, thus blocking the VAT at 5%.

By comparison, those who will sign for the same construction after January 1, 2023, will pay 19% VAT, if it exceeds 120,000 euros!

Also, for future years, a trend of rising prices in the real estate sector is forecast, due to the need to align them with the European housing market.

These are some of the reasons why financial specialists recommend almost unanimously this year-end investments in real estate, especially in new construction.

This type of investment remains among the safest and most profitable, protecting the investor from inflation and allowing different profit margins to be anticipated, depending on the investment.

Case study

A two-room apartment in the block of apartments and luxury offices Bucegi12, which is being built in the vicinity of the Palace of Justice in the center of Ploiesti, now costs 128,000 euros, without VAT.

Those who will conclude a pre-contract by December 31 will pay VAT of 5% and 6,400 euros, respectively. After January 1, 2023, for the same apartment, the future owner will pay VAT of 19% and 24,320 euros, respectively. Only from here from here results a saving of 17,920 euros for the future investor.

Given the annual growth rate of real estate investments on the local market of Ploiesti, which is estimated at about 20%, the purchase of a space in this building not only protects the investor from the effect of inflation, but can also bring profit.

The unique, ultra-central positioning of the construction, but also its special facilities, including underground parking lots, three elevators, one of which is a freight elevator and, in particular, the air conditioning system based on solar panels and heat pumps, anticipates that the value of the investment at the completion of the works can reach up to 30% of the initial investment.

By comparison, for the time frame of maximum two years in which the Bucegi block will be completed12, the bank deposits will hardly cover their maintenance costs and inflation will lead to a significant devaluation of them.

To find out how you can invest in this unique real estate project in the center of Ploiesti, you can contact the developer directly by phone/watsapp: 0754 770 777 or 0723 226 060.

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The first residential complex built near the Palace of Justice in Ploieşti

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