Law No. 141/2025 on certain fiscal and budgetary measures has, as a general rule, eliminated the possibility of applying the reduced VAT rate to the delivery of housing to individuals, while maintaining a transitional regime. Under the strict conditions set forth by law, an individual may purchase, no later than July 31, 2026, a single home with the application of the reduced 9% VAT rate.

With only two weeks remaining before the deadline, however, the application of this benefit is being called into question by a circumstance beyond the control of buyers, developers, and notaries: the unavailability of the cadastral and land registry information system.

The National Agency for Cadastre and Land Registration (“ANCPI”) announced that, as of July 14, 2026, all IT systems managed by the agency—including the e-Terra cadastre and land registry application and its email addresses—are inoperative. ANCPI described the incident as the most serious technical event in the institution’s history and estimated that the application could remain unavailable until the end of the week.

If the incident drags on or if the resumption of operations is followed by an operational bottleneck caused by the volume of accumulated requests, the question inevitably arises: can the buyer retain the 9% VAT rate when they are unable to authenticate the sales contract by July 31, 2026, solely due to the malfunction of the government system? Under the current law, the answer is, unfortunately, no.

Conditions for Applying the Reduced 9% VAT Rate

Article III of Law No. 141/2025 allows an individual, either alone or together with other individuals, to purchase, during the period from August 1, 2025, through July 31, 2026, inclusive, a single residential property subject to the reduced 9% VAT rate, provided that all the conditions set forth by law are met.

For transactions currently in the process of being finalized, the decisive condition is the time limit: the delivery of the residential property and the authentication of the deed of conveyance must take place no later than July 31, 2026, inclusive.

Therefore, in order to apply the 9% VAT rate, an authenticated deed of transfer of ownership—that is, the final sales contract—must exist by that date. For transactions where the notary does not already have a valid land registry extract for authentication, fulfillment of this condition is currently blocked.

It is not sufficient to have a preliminary contract, for the signing to have been scheduled, for the price to have been paid in full, or for the property to have been handed over. All these circumstances may demonstrate that the parties were prepared to finalize the transaction and that the delay is not attributable to them, but they cannot substitute for the authentication of the deed of conveyance by the deadline established by law.

Blockage of the Authentication of Sales Contracts Due to e-Terra Malfunction

To authenticate notarial deeds that transfer, modify, or establish a real property right, the notary public must request a land registry extract for authentication.

The extract is issued exclusively at the notary public’s request, reflects the current cadastral and legal status of the property, and is valid for 10 business days. Upon request, the land registry entry is blocked so that, during the extract’s validity period, no other entries may be made, except for those based on the document for which the extract was issued.

In real estate transactions, obtaining the extract for authentication marks the entry of the case into the actual finalization stage. Without it, the notary cannot verify the property’s current legal status, the land registry entry cannot be blocked, and the transfer of ownership cannot be executed in accordance with the requirements of the law.

The extract for authentication is therefore not a mere administrative formality, nor is it a document that can be replaced by agreement between the parties. It constitutes one of the essential safeguards for the security of real estate transactions.

When e-Terra and the other IT systems managed by ANCPI are down, the notary cannot, under normal circumstances, request and obtain the extract, ensure that the land registry entry is blocked, and carry out the operations necessary for the subsequent registration of the deed. For cases in which a valid extract has not already been issued, the completion of the transaction is, in effect, suspended.

The problem is not a lack of willingness on the part of the parties. It is not a matter of a buyer delaying payment of the purchase price, a developer failing to complete the housing unit, or incomplete documentation. It is a matter of the objective impossibility of obtaining, through the state-administered infrastructure, the document that the state itself requires to finalize the transfer.

Even if the application were to resume operations quickly, there remains the challenge of managing the backlog of requests, processing times, and the actual capacity of land registry offices and notaries to finalize all postponed transactions by July 31, 2026. The relaunch of e-Terra does not, in and of itself, mean the end of the bottleneck.

Consequences of Contract Authentication After July 31, 2026

A residence delivered under a contract authenticated after July 31, 2026, will no longer meet the conditions of the transitional regime, barring legislative intervention.

The 9% VAT rate is a time-limited exception. Outside of this exception, the delivery of the residential property is subject to the standard 21% VAT rate, applicable in Romania as of August 1, 2025. Even advance payment of the full price does not preserve the reduced VAT rate if, on the date of delivery, the transaction no longer meets the conditions set forth by law. The rate applied to advance payments does not definitively determine the tax treatment of the transaction: at the time of delivery, amounts invoiced or collected in advance are adjusted, if necessary, so that the entire transaction is subject to the VAT rate in effect and corresponding to the conditions met at that time.

From a tax perspective, the obligation to collect VAT rests with the seller. In the context of the contract, however, the difference is borne, in most cases, by the buyer. Preliminary agreements and contracts used in residential projects frequently establish a net price, to which VAT is added at the rate applicable on the date of delivery, or provide for an explicit price adjustment mechanism in the event of a change in tax treatment.

For the buyer, the shift from 9% to 21% is not merely a tax adjustment. It can amount to a difference of tens of thousands of lei, arising at a time when financing, the buyer’s own contribution, and the transaction budget have already been established and, in many cases, can no longer be adjusted without significant consequences.

The Impossibility of Suspending or Extending the Deadline by Way of Interpretation

The July 31, 2026, deadline is not merely a procedural deadline set by ANCPI, ANAF, or a notary. It represents a substantive condition established by law for the application of a tax relief.

The law does not provide for the suspension of the deadline in the event of public system failures, its extension by the duration of the technical incident, or the treatment of a subsequently authenticated sale as having been completed within the deadline.

Neither force majeure nor objective impossibility, in and of themselves, alter the tax rule. These circumstances may exclude contractual fault on the part of the buyer or seller and may influence the application of penalties or other contractual remedies, but they cannot produce the legal effect of deeming a delivery made in August to have been made by July 31, 2026.

In the absence of a derogating provision, neither the notary nor the tax authority may suspend or extend the deadline. The situation may clearly be unfair; however, neither the notary nor the tax authority has the authority to correct this unfairness by rewriting the law.

Limits on Executive Intervention

Normally, the urgency of the situation and the approaching deadline would have made an emergency ordinance the natural instrument of intervention. However, this instrument is not currently available. The government was dismissed by the motion of no confidence adopted on May 5, 2026, and continues to exercise its powers under the constitutional regime applicable to a government whose term has ended.

According to Article 110(4) of the Constitution, a government whose term has ended may only carry out the acts necessary for the administration of public affairs until the members of the new government are sworn in. The Administrative Code is even more explicit: during this period, the government may not issue ordinances or emergency ordinances, nor may it introduce bills.

The dismissed government can and must adopt the administrative measures necessary to restore the ANCPI systems and to limit the technical consequences of the incident. However, it cannot, by government decision or any other administrative act, modify the deadline established by law or the substantive rules governing the VAT rate.

Not even an order from the ANAF president can compensate for the lack of legislative action. Such an order may organize the application of the law, but it cannot rewrite it. It may regulate registers, procedures, forms, and technical operations, but it cannot change the date of July 31.

According to Article 4(3) of Law No. 24/2000 on legislative drafting rules, normative acts issued in the implementation of laws may be adopted only within the limits and in accordance with the rules set forth in those laws. The ANAF President’s order is a normative act subordinate to the law and cannot amend, supplement, or nullify a substantive condition established by the legislature.

An ANAF order that would attempt to extend the tax relief beyond July 31, 2026, would exceed the issuing authority’s jurisdiction and would be subject to annulment for violating the principle of the hierarchy of normative acts.

This leads to an obvious impasse: the situation requires a derogation with the force of law, the dismissed Government cannot adopt the necessary emergency ordinance, and the ANAF President cannot, by order, modify the conditions established by Law No. 141/2025.

Available Solutions and the Cost of Institutional Inaction

From a strictly legal standpoint, the situation is not without solutions. It would be wrong to claim that the impasse is absolute and that the state no longer has any leverage. Solutions do exist. The question is who will take responsibility for implementing them and whether they will do so before the deadline expires.

The first solution is technical in nature: the urgent restoration of e-Terra. Technical responsibility lies with ANCPI and the public authorities competent to ensure the functioning of its infrastructure.

Identifying the competent authority, however, is the easy part. The tax deadline continues to tick away, and every day of downtime reduces the window during which transactions can be resumed and finalized. The buyer cannot fix e-Terra. The developer cannot intervene in ANCPI’s systems. The notary cannot, unilaterally, substitute the cadastral and land registration infrastructure.

The second solution is legislative. The dismissed government cannot adopt an emergency ordinance nor can it introduce a bill. That leaves Parliament. Deputies and senators have the right to introduce legislation, and Parliament can be convened in an extraordinary session and can adopt, under an emergency procedure, either an extension of the deadline or a limited derogation for contracts that could not be authenticated solely due to the unavailability of the ANCPI systems.

A legislative solution would not be difficult to draft, nor would it be hard to justify. The obstacle is neither legal complexity nor a lack of constitutional tools. What is missing is the certainty that the relevant institutions and political actors will act before the effects become irreversible.

Will the system be repaired quickly enough? Will Parliament take action in a timely manner? Will there be the necessary political will to convene an extraordinary session, draft and adopt the legislation, and promulgate and publish it before the loss of the reduced tax rate becomes inevitable? These are no longer legal questions. They are questions of institutional and political responsibility.

In theory, the state has the necessary tools: ANCPI can restore the infrastructure, and Parliament can amend the law. In practice, the buyer has only one option: to wait and hope that the institutions will act faster than the tax deadline.

In the meantime, the buyer may have fulfilled all obligations on their part. They may have signed the preliminary contract on time, paid the advance required by law, secured financing, and be ready to pay the purchase price. The home may be completed and ready for occupancy, and the seller may be ready to transfer title. The buyer may, therefore, have the home, the financing, and the documentation all ready. What they cannot have is the document issued through the government system, without which the government itself will not allow them to benefit from the tax relief.

In this scenario, the buyer is merely a participant who has no control over any of the causes of the bottleneck. They cannot fix e-Terra, cannot compel ANCPI to issue the extract, cannot force Parliament to pass legislation, and cannot ask the notary or ANAF to ignore the law. All they can do is watch their transaction get delayed and the cost increase.

The state has made the tax relief contingent on the completion, by a fixed date, of a formality that depends entirely on the functioning of its own infrastructure. If the infrastructure fails and no institution intervenes in time, the cost of inaction does not fall on the state but is transferred to the buyer in the form of a 21% VAT rate.

It is therefore no longer merely a matter of tax interpretation. It is a matter of how the state functions and of its responsibility toward the people whom its own legislation renders unable to act.