Starting in 2027, new rules for taxing income from the sale of real estate will take effect in Moldova. Owners of a single residence will find it easier to obtain a tax exemption, and repair expenses will be allowed to be deducted when calculating taxable income. However, at the same time, the government is abolishing the current mechanism under which only half of the capital gains are taxed. As a result, selling real estate will become more profitable for some owners, while for others, the tax burden may double. The changes are enshrined in Law No. 247 of October 22, 2026.
In Moldova, the tax on the sale of real estate is levied not on the entire transaction amount, but on the positive difference between the sale price and the property's tax value. Until the end of 2026, only 50% of the capital gain is included in taxable income, to which a 12% income tax rate applies. Thus, the effective tax burden amounts to 6% of the capital gain.
For example, if an apartment was purchased for 600,000 lei and sold for 1 million lei, the capital gain is 400,000 lei, and the tax is 24,000 lei. At the same time, the sale of a primary residence is exempt from taxation provided that the conditions established by law are met.
It was precisely the definition of a primary residence that posed difficulties for a long time. To qualify for the tax exemption, one had to have owned the property for at least three years and have had a registered place of residence or stay at that address for the specified period. As a result, a person could live in their own apartment for years but lose the tax exemption due to a lack of registration at that address.
Starting January 1, 2027, the criteria will change. The exemption will be available if one of two alternative conditions is met: the property was used as the owner's registered place of residence during the specified three-year period, or it was the owner's sole residence for the three years prior to the sale. This will eliminate situations where the lack of registration at an address prevented a tax exemption.
The second issue concerns renovation expenses. Back in August 2020, the State Tax Service clarified that the Tax Code does not provide for an adjustment to the initial cost of acquired real estate based on subsequent investments made to improve it. As a result, the taxable capital gain could exceed the owner's actual economic benefit.
Starting in 2027, the tax value of real estate may be increased by the amount of verified renovation expenses. This will require tax invoices and payment documents. However, many owners—especially those who carried out repairs several years ago using private contractors—do not have such documents. Therefore, those who have retained proof of their expenses will be the first to benefit from this new mechanism.
The most significant change directly affects the tax burden. Law No. 247 repeals Part (7) of Article 40 of the Tax Code, which provided that only half of the capital gain was to be included in taxable income. Starting in 2027, while maintaining the 12% rate, the tax will be calculated based on the entire positive difference between the sale price and the tax value of the property.
For an apartment purchased for 600,000 lei and sold for 1 million lei, the tax—in the absence of an exemption or additional deductible expenses—will increase from 24,000 to 48,000 lei. If the owner can document 200,000 lei in renovation expenses, the tax base will be reduced to 200,000 lei, and the tax will amount to 24,000 lei—the same amount as under the previous rules without accounting for renovations.
Thus, the ability to deduct renovation costs does not necessarily offset the tax increase. Moreover, the new rules do not address the issue of inflation. Real estate purchased ten or fifteen years ago may have appreciated significantly due to general price increases. However, in the absence of indexation of the initial cost, part of the nominal increase—which does not reflect a real increase in the owner's wealth—is also subject to taxation.
The tax increase will primarily affect transactions involving real estate that is not recognized as a primary residence: second homes, investment properties, and inherited property, unless it meets the conditions for exemption. At the same time, special rules for determining the taxable value apply to inherited real estate. The increased tax burden may influence owners' decisions regarding the timing of sales and the formation of market prices.
As a result, the 2027 reform combines two opposing measures: a fairer approach to determining tax exemptions and a doubling of the effective capital gains tax rate. For some owners, selling a home will become easier and less expensive; for others, it will become significantly more expensive. Moreover, the changes will affect not only investors but also ordinary citizens selling property that does not meet the criteria for a primary residence. Therefore, it would be incorrect to portray the new rules solely as a reduction in the tax burden. // 09.11.2026 – InfoMarket