Buying a property in Hungary
Before starting a search for a property in Hungary, It is important to decide on what type of property you would like to buy. Think about how you are going to use it and have a clear idea about your needs before starting the search. It is good to make a list of your expectations and to rank them. Since you have to make compromises during the house-buying process, this list will help you to find the property that best fits your needs.
When buying property in Hungary you will need to appoint a Hungarian lawyer to conduct legal checks on the property on your behalf and to handle the financial transaction. A deposit of 10% of the purchase price is normally payable to the seller on signing the purchase contract, at which stage your name is included on the title sheet as confirmation of your intention to buy. When the outstanding balance is paid you will be registered on the title sheet as the exclusive owner of the property.
Legal fees and stamp duty usually amount to around 10% of the purchase price
Tax on purchase of real estate
When purchasing a house or flat for living purpose, 4%.
This is usually 1.2% of the purchase price (1% of the cost of the property plus 20% Value Added Tax). This is a binding fee to be paid by the purchaser, payable in any case once the services have been rendered
In case of buying a property in order not to live there combined with the intention to sell it within 15 years – whether you the buyer is an individual or acting on behalf of a company – you are obliged to pay withholding tax. Its amount is the 100% of the property’s value for 5 years, from the 6th year this amount decreases by 10% every year. (Accordingly: in the 6th year it is 90%, in the 7th year it is 80% …etc.)
Be aware that any fees and costs written down in the purchase contract are payable in any case – whether you decide to go through with the purchase or not
Real Estate Agencies
In Hungary, real estate agencies don’t charge clients wishing to buy property as they receive brokerage commission from the sellers. This doesn’t mean that some agents will not try and make a charge, so always make sure all costs and charges are clear in advance of making an agreement or signing anything.
Tip: The use of a specialist relocation/property company is highly recommended. A good company will have an in-depth knowledge of the property market, prices, how the system works and the possible problems to avoid. In addition, they should be able to help with the negotiation of a purchase and the drawing up of contracts. Specialists also tend to have good relationships with several real estate agencies, so you will be shown more properties
After signing the contract we can help you put utilities (water and electricity) in your name, open a bank-account, and, if necessary, arrange your insurance with an insurance broker.
Non EU-citizens will need permits from the local mayor and county authorities. These are just bureaucratic formalities – in practice permits are always granted. The lawyer will make these arrangements. An exception on this is possible if you declare in the purchase contract your intention to make Hungary your permanent home. We need to find out based on your nationality.