Some of these amendments are intended to align the tax system with the updated cadastral values, while others aim to simplify tax administration and combat speculative real estate transactions.

Below are the most important changes that will affect property owners.

1. Real Estate Tax

One of the most significant changes concerns the range within which local public authorities will be able to set real estate tax rates.

Starting January 1, 2027, the tax rate applicable to properties assessed at cadastral value may range between 0.05% and 1%, depending on the decision of the local authority. This adjustment follows the nationwide revaluation of real estate, which brings cadastral values closer to market values.

In addition, the Tax Code will be harmonized with the Law on Valuation Activities to eliminate inconsistencies in terminology and ensure uniform application of the legislation.

2. Wealth Tax

The draft also simplifies the criteria for applying the wealth tax.

The tax will apply to residential properties, including vacation homes, with a combined value of at least MDL 5 million, excluding land.

The purpose of this amendment is to adapt the taxation mechanism to the updated cadastral values while creating a clearer and more predictable tax framework.

3. New Rules for the Primary Residence

Another important amendment concerns the definition of a primary residence.

Individuals will be able to prove that a property is their primary residence in one of two ways:

• by having their registered domicile at that property for at least 3 years; or
• by demonstrating that it was the only residential property they owned during the same period.

These changes simplify the application of the tax exemption for the primary residence and provide greater legal clarity for taxpayers.

4. Changes to Capital Gains Taxation

One of the most important amendments affecting the real estate market concerns the calculation of capital gains.

Under the current legislation, only 50% of the capital gain is included in taxable income. The draft proposes eliminating this reduction so that 100% of the capital gain will be subject to taxation at a 12% rate.

In other words, the taxable base will effectively double compared to the current system.

5. Renovation Costs Will Become Deductible

A positive change is the possibility of including renovation and modernization expenses in the property's tax basis.

To qualify, property owners will need to provide:

• tax invoices; and
• proof of payment.

This amendment allows for a more accurate calculation of the actual capital gain realized upon the sale of a property.

6. Responsibility for Calculating the Tax Will Shift to the Property Owner

The draft also changes the procedure for declaring capital gains.

While in certain situations legal entities were previously required to withhold the applicable tax, the new mechanism transfers the responsibility for calculating, declaring, and paying the tax directly to the individual property owner.

As a result, property owners will be responsible for determining and paying the tax due in accordance with the Tax Code.

Two Measures with Major Impact on the Real Estate Market Have Been Removed

The final version of the Fiscal Policy 2027 draft differs from the version initially presented for public consultation. Following discussions with the business community and representatives of various economic sectors, two measures that could have had a significant impact on homebuyers and property owners were removed.

• removal of the introduction of VAT on the sale of newly built homes. Keeping the current VAT regime avoids increasing the purchase cost of new residential properties and helps preserve housing affordability.
• removal of the proposal to tax the capital gain generated from the sale of a primary residence when that gain exceeded MDL 1 million. Under the current version of the draft, the primary residence continues to benefit from the tax exemption provided by law, while the new eligibility criteria based on registered domicile or ownership of a single residential property make the exemption clearer and easier to apply.

Conclusion

The Fiscal Policy 2027 represents an important step toward modernizing Moldova's tax system and adapting it to the current realities of the real estate market. The update of cadastral values, the revision of capital gains taxation rules, and the clarification of the legal status of the primary residence will have a significant impact on both property owners and the real estate sector as a whole.

At the same time, removing the proposed VAT on newly built homes and abandoning the proposal to tax capital gains on the sale of a primary residence demonstrates that constructive dialogue between public authorities and the business community can lead to more balanced policy decisions. These changes preserve the reform's main objective - combating speculation and ensuring fair taxation of investment income - without placing an additional tax burden on citizens who own a single home and need to change it for legitimate life reasons, such as starting a family, expanding it, or preparing for retirement.

A healthy real estate market requires tax rules that are clear, predictable, and fair. The government should discourage speculative activities and ensure effective tax collection while protecting citizens' right to buy, sell, or exchange their primary residence without turning this process into an unnecessary financial burden. Achieving the right balance between the public interest and the protection of good-faith property owners is essential for the sustainable development of Moldova's real estate market.