First Home Program in Romania

First Home Owner scheme was introduced by the Romanian government as an incentive for the housing market. The program is partially similar to other schemes previously established in United States, Poland and Australia. 

Locally, the beneficiaries of First Home program are natural persons who don’t own a residential property in common or individually, at the date of becoming effective (June 4, 2009), and don’t have a mortgage loan underway.

Potential buyers must pay 5% in advance of the home’s purchase price, of the price is lower or equal to 60,000 euros. If the purchase price is higher than 60,000 euros, the applicant must pay 3,000 euros in advance, in addition to the price difference between 60,000 euros and the actual purchase price.

Applicants eligible to the mortgage loans under First Home program, will pay interest rates lower by 42-49% in average than current lending conditions, as the minister of finance, Gheorghe Pogea said recently.

On May 28, the Government said the persons who would buy a house under the program will benefit of a VAT reduced by 5%, measure applicable for social dwellings.

Moreover, the persons qualified for the program are compelled not to alienate the purchased house in the first five years. The residential property purchased under First Home program must be registered at the Land Registry Office, to be located in Romania and must be free from encumbrances.