Bucharest – RomaniaS Constitutional Court has upheld a controversial new tax law, dismissing a challenge brought forth by the AUR party. The ruling paves the way for meaningful increases in local taxes on properties, vehicles, and investments starting January 1, 2026, as part of a government effort to address a growing budget deficit. Prime Minister Ilie Bolojan’s management argues the measures are necesary to stabilize public finances amid reduced state assistance to local governments.
Romania’s Constitutional Court on Wednesday rejected a challenge from the AUR party against a law increasing local taxes starting January 1, 2026.
This story is developing and will be updated.
“The objection of unconstitutionality regarding the Law on establishing measures for recovery and streamlining public resources and for amending and supplementing normative acts, an objection submitted by senators belonging to the parliamentary group of the Alliance for the Union of Romanians – rejected,” a press statement from the Constitutional Court announced.
The challenge concerned the law enacting the second package of fiscal and budgetary measures proposed by the Bolojan Government, which includes increases in local taxes, including potential hikes of up to 80% for residences.
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The law was previously challenged once before, with judges ruling only the provision regarding polygraph testing unconstitutional.
Prime Minister Ilie Bolojan explained in an interview with ȘtirileProTV.ro why increasing property taxes in Romania from January 1, 2026, is necessary.
Bolojan stated that municipalities need to generate more revenue in the coming period, as the government will no longer be able to provide financial assistance to local administrations as it has in the past, due to the difficult situation of the state budget caused by the record deficit.
According to calculations by mayors from the Association of Municipalities, the increase for homes could be 70%. This means that if a home tax of 100 lei was paid this year, an additional 70 lei would be due next year. Taxes on older, more polluting vehicles will also see significant increases, with the tax doubling for a car with a small engine and Euro 4 emissions standards.
Business taxes are also being increased. Dividends and capital gains, including those from cryptocurrencies, will be taxed at 16%, up from 10% currently.
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