According to a governmental regulation property can normally be acquired by foreigners without restraint in Hungary. Only properties under preservation order, real estate in protected landscapes and agricultural land are an exception, such as meadows, farmland and pastures, forests, etc..
Please be advised, that the following costs are related to the purchase:
• Legal expenses are usually 1% (plus VAT) of the purchase price
• Abstract of title: 15 €
• The entry fee for the registration of the ownership: 25 €
In the following, we would like to give you a short introduction about the costs related to a property after the purchase. If you need any more detailed information, please contact us.
• Property acquisition duty (depending on the classification of the property) *
• Tax on buildings or land plots, or Communal taxes (depending on local regulations)
• Maintenance costs (depending on needs and size of property) – for further details please contact us!
*You can calculate the property acquisition tax as follows:
The tax rate is a fixed 4% of the value for properties.
Please note: changes are possible at any time.
In case of purchase by a foreigner not being citizen of a EU member country, a formal decision (permit) is needed. The permit is granted by the competent Government Office. A stamp duty in the amount of 50.000 Ft has to be paid in this procedure.
a. Tax on buildings
This tax obligation starts on the first day of the year following the one when the permit for use was issued, and ceases on the same day as the building ceases to function as such.
The main rule is that the subject of building taxation is the owner starting on the first calendar year (private person or enterprise).
As far as buildings located within the territory of the local-government are concerned, in the inner area and on the outskirts of the settlement, the object of taxation is the constructed building part serving housing and other purposes.
There are important exemptions concerning emergency housing, tax objects located in health-care or recreational zones, social, medicinal, etc. constructions.
Depending on the decision of the local–governmental body, the tax base is the floor area of the building in square meters or its corrected market value. The upper limit of the annual rate is 900 Ft/m2 or 3 % of the corrected market value.
b. Tax on land plots
This tax obligation begins on the day of the year in which the land plot was rated as belonging to the internal area or in which the ban on construction is lifted, and ceases on the last day of the year in which the plot was categorised as belonging to the outskirts or in which the ban on construction was imposed.
The tax subject is the person who was the proprietor of the plot on the first calendar year.
Major exemption instances are: land plots under ban to construct or develop, areas for public-use traffic, and plots held by bodies in charge of social, health and children’ protection jobs, etc. The tax is levied in terms of the plot area given in square meters or in terms of the corrected market value of the land plot. Within this scheme the upper limit of tax rate is 200 Ft/m2 or 3 % of the corrected market value.
Note: When you acquire a site, you are exempt from property acquisition duty if this is built on within four years. After four years the tax rate is 10% plus rates of interest.
a. Communal tax payable by private individuals
The way this tax obligation arises for private individuals is the same as it is for taxation on land plots and buildings. As to immovable properties owned by private individuals or to those charged with property-value right to the benefit of private individuals, the object of taxation is the building, and the unimproved land plot within the inner area as well as the letting right of apartments not owned by private individuals.
The upper limitation of this tax rate is 12,000 Ft/year per taxation object or per each apartment-letting right.
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