Geo MĂRGESCU, member of the AREI Board of Directors, was the guest of Iancu GUDA at “Banii în mișcare“ show on Digi 24 HD. The topics focused on the construction and real estate transactions sector in Romania, with emphasis on the urbanistic situation in Bucharest and the impact of the new tax measures.

Geo Mărgescu introduced the topic by describing Bucharest’s current development strategy and sector laws: “A city like Bucharest develops with vision. And the goal is realized in the city’s general urban plan. Currently, we are attempting to modify an urban design that was adopted 23 years ago and reviewed perhaps only a few years after the revolution. A new general urban plan has been initiated, however it could take 3–4 or possibly more years to complete this process.”

“We need a vision from General City Hall, a vision that says I want to develop that area or that industrial platform, or various key areas of Bucharest until the urban plan is approved and I am ready to encourage investment in those areas by combining the appropriate functions for each area,” he continued. “This is necessary because we see that big investors are considering leaving the country because they lack projects or because other investors are looking to shift towards other industries.”

 Going forward, in reference to tax changes, Geo Mărgescu summarized: “Tax changes put additional pressure on the market. If we take the increase in VAT on housing, for example, this will increase the price of housing, because it is a direct tax paid by the end user. Developers have only two ways to counter this increase: lower the quality of the product or decrease the surface area of the apartments.”

 The AREI Board Member concluded: “Given that the real estate industry is an industry that contributes 14% of GDP, it should be encouraged and not overtaxed. In general, I think we need to find solutions to increase the tax base and not to increase taxes.”

Click to watch the TV show here: