HOW CAN FOREIGNERS PURCHASE PROPERTY IN HUNGARY?

For foreign investors who want to purchase real estate in Hungary there are two ways to proceed: The buyer can apply for a permit as a private individual, which means submitting an application to the local authorities to acquire the property. The cost associated with the procedure is approximately EUR 250. Foreign buyer can establish a local hungarian company, usually a limited liability company. This is preferable if the purchaser wishes to acquire multiple properties.


HOW DO I APPLY FOR A PERMIT?

This is a straightforward procedure, which is dealt with by your Hungarian lawyer on your behalf. The procedure takes 2-3 months and will cost approximately EUR 250 to EUR 350.



WHAT ARE THE ADVANTAGES AND DISADVANTAGES OF BUYING AS APRIVATE INDIVIDUAL OR A COMPANY?

As a private person: The application for a permit can be denied though it is unlikely as EU integration rapidly approaches. But it will take approximately 2-3 months. If a requested permit is denied it is possible to establish a Hungarian limited liability company to acquire the property. Establishing a company: The advantage of buying property through a company is that it saves time. In addition to this all expenses relating to the apartment can be written off (e.g.) travel, accommodation, legal & agency fees, purchase (stamp) duty, renovation cost, furniture, utilities, and all associated services, including the interest on the purchase loan. Under this approach, the company can be sold along with the property, which makes it attractive for future buyers, as no purchase duty needs to be paid. The only disadvantage is that the company shall require an accountant and need to submit annual reports; Budapest Properties can assist with that issue.


WHAT WILL MY LEGAL FEES COST?

Legal fees for property purchases are usually 1%-1.5% plus VAT= 20%. The legal system in Hungary is highly regulated and secure. Deposits are usually 20% to 30% of the purchase price, paid on signing the initial contract. Solicitors are registered in the Municipality Bar and National Bar Association.


HOW MUCH IS THE STAMP DUTY?

The following costs can be expected:

  • Lawyer fees: 1% of the purchase price
  • Agency fees: 3-4% of the purchase price plus purchase duty - When buying a resale apartment 6% of the purchase price - When buying a new development at a price of up to approximately EUR 60.000 there is no purchase duty - If the property's purchase price is more than EUR 120.000 the purchase duty is 6% as mentioned above
  • A company that intends to sell the property within two years can pay 2% purchase duty. For private individuals the price for a permit is around EUR 250. Establishing a company: The advantage of buying property through a company is that it saves time. In addition to this all expenses relating to the apartment can be written off (e.g.) travel, accommodation, legal & agency fees, purchase (stamp) duty, renovation cost, furniture, utilities, and all associated services, including the interest on the purchase loan. Under this approach, the company can be sold along with the property, which makes it attractive for future buyers, as no purchase duty needs to be paid.
    • The only disadvantage is that the company shall require an accountant and need to submit annual reports; . can assist with that issue. Purchase duty is payable in 6-12 months after signing the final contract, upon receipt of the bill from the authorities. We offer to prepare a detailed calculation for our clients in order to avoid any "surprise" in the future. We list all the costs that can occur and when they are payable, so you will be able to organize your finances and make decisions holding all the information you need. -

HOW DO I SECURE PROPERTY OWNERSHIP?

There are no title deeds in Hungary. The ownership of the title is registered with the Hungarian Land Registry, which is operated by the Hungarian Government. This is a simple and safe system, giving you clean title with no possibility of title deeds being lost.


WHAT ARE THE LEGAL REQUIREMENTS?

Hungary has an excellent legal system and the legal requirements for buyers are similar to most European countries. Your Hungarian lawyer will deal with all legal aspects of buying on your behalf and represent you in front of the Hungarian Authorities and will provide you with all documents in English, Spanish or on the requested language.


CAN I TRANSFER RENT OR OTHER FUNDS BACK FROM HUNGARY EASILY?

There are no restrictions on transferring funds. You just instruct your bank or solicitor to transfer the funds back to you and it should take 3-5 working days.


DO I NEED TO SPEAK HUNGARIAN?

No. A very high number of Hungarians speak English and all the agents, lawyers, banks, renting and management companies we work with have fluent English and Spanish speaking staff.