PSD suddenly feels sorry for homeowners: it does not support a property tax based on market value

The Social Democratic Party (PSD) announced on Friday that it does not support calculating the tax on residential properties based on market value, which the Bolojan government had scheduled for January 1, 2027, and which, according to the party, could have meant a tax up to twenty-seven times higher than the current one. However, the statement does not make clear whether the Social Democrats would scrap the measure entirely or merely restructure it. “The PSD has pledged to change course in governance, and the first decisions supported by the Social Democratic ministers aim to halt the austerity policy launched under the previous government” – reads the text released by Agerpres.

The party also promises to “reject and expose the populist excesses by which some are trying to exploit citizens' legitimate discontent for electoral purposes,” adding, with a well-aimed jab: “the PSD will not deceive Romanians with promises of 35,000-euro houses, but it will not punish them either by making them pay a tax twenty-seven times higher for the houses they live in.” The 35,000-euro house was a campaign promise by George Simion and AUR, which Simion later admitted himself had been a “marketing gimmick,” because “otherwise we wouldn't have reached 42 percent.”

According to the Social Democrats, the market-value-based property tax was not their idea, but was written into the National Recovery and Resilience Plan (PNRR) in 2021 by the PNL–USR government, which sent it to the European Commission without first consulting parliament. The statement says Romania must honor its commitments to the European Union, since it receives EU funds in return, but that in implementing the measure, vulnerable groups and the middle class must also be protected. Former finance minister Adrian Câciu, a PSD deputy, put it far less diplomatically on Facebook, writing that “Bolojan wanted to leave Romanians without a home” and calling the measure yet another “time bomb” left behind by “this individual.”

The Social Democrats' outrage is all the more surprising given that they themselves took part in the decisions for which they are now blaming only their predecessors. The market-value-based taxation was originally set for January 1, 2025 by the law adopted in 2022 approving Government Emergency Ordinance 16, that is, during the period when the PSD governed together with the PNL. The date was later postponed to 2026 for electoral reasons, and then, according to a report by Profit.ro, the finance ministry pushed it back to 2027 last summer, because the IT systems and valuation mechanisms had not been completed. This, too, was decided by a government in which the PSD had ministers right up until it brought down Bolojan in the spring. Spotmedia also pointed out that the program of the Niculescu government — sworn in only a few days ago and led by the PSD — itself envisages the gradual introduction of market-value-based taxation. The statement does not explain the origin of the twenty-sevenfold increase; currently, individuals pay 0.08–0.2 percent of the taxable value for their residential buildings, and most municipalities have set the tax close to the minimum.

The PSD's announcement is thus primarily a political message: the party, which just days earlier, when forming the government, promised to halt the “austerity measures,” now wants to show that it will not reach into voters' pockets. How it reconciles this with its EU obligations and the funds due from the recovery plan — which a delayed reform could jeopardize — it has not yet revealed.

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