The government adopted an emergency ordinance on December 17 requiring all local authorities to approve, by December 31, the local taxes and fees that will apply in 2026, effectively forcing city halls to implement substantial property tax increases in line with guidelines already legislated, Ziarul Financiar reported.

The ordinance obliges local councils and the General Council of Bucharest Municipality to adopt the new tax rates before the end of the year. Local administrations that fail to comply risk losing transfers from the central government budget.

The measure follows the adoption of a broader fiscal law cleared by the Constitutional Court on December 10 after being promoted through an accelerated parliamentary procedure. Under that legislation, property taxes and other local taxes levied by local authorities are set to increase by 70%, with the additional revenue deducted from the amounts transferred to local administrations from the state budget.

In a statement, the government said: “Local councils and the General Council of Bucharest Municipality will approve, by December 31, 2025, the decisions regarding the tax and fee rates established for 2026, according to the normative act adopted by the government.” 

The statement added that the emergency ordinance introduces a new sanction for failure to adopt the local council decision, through the possibility for the Ministry of Finance to temporarily stop supplying tax rates deducted from income tax and amounts for balancing, except for mandatory salary and social expenses.

According to the ordinance adopted by the cabinet led by prime minister Ilie Bolojan, other local taxes and fees, aside from those related to buildings and land already covered by the recently adopted law, may be indexed to the inflation rate.

The government also clarified that the current taxation regime for residential buildings will remain in place until 2027, including for properties owned by legal entities. From 2027, taxation will shift to a system based on the market value of properties. This change forms part of Romania’s commitments under the National Recovery and Resilience Plan, which envisages a comprehensive reform of property taxation aimed at broadening the tax base and increasing local government revenues.

The ordinance reinforces pressure on local authorities to align local tax policy with central government fiscal consolidation efforts, while tying compliance directly to access to key budgetary transfers.

iulian@romania-insider.com

(Photo source: Gov.ro)