Since the introduction of tax on the gains made from real estate transactions in June last year, gross profit made by the sellers of such properties (individuals only) has reached approximately one billion euros.
Budgetary revenues from this tax amounted to 25.3 million euros in the last seven months of 2005. Considering tax is of 10%, the gross profit made by the real estate speculators stood at nearly 253 million euros.
Had the tax been levied for the entire duration of the year, the budget's revenues would have probably exceeded 43.3 million euros, out of a 443 million-euro gross profit.
The budget has 88.5 million euros earmarked for collection from speculative transactions involving property, out of a 553 million-euro gross profit in 2006 (the tax was raised from 10% to 16% this year). All in all, the last two years' gross profit made by individuals from such sales of land, houses and flats exceeds 986 million euros, making real estate the most profitable investment in the economy.
"Out of the total flats bought, about 10-15% are purchased by such speculators," says Radu Lucianu, managing partner of real estate consultancy firm Eurisko. Speculators buy early in case of new real estate projects and sell when the project is completed, making a profit in the range of tens of thousands of euros per flat.
"There are individuals who buy flats at the beginning of the projects at promotional prices to sell them later for a higher price, for 20-30,000 euro profit. I don't know if this is a real business, though, considering the amount they make," Lucianu added.
The entire one billion-euro gross profit calculated based on budget revenues was derived by individuals, because companies are subject to different taxes.
Real estate transactions by companies are conducted like any other balance sheet operation, and therefore they are
