The real estate market in Hungary has recorded a steady 7% annual growth in recent years to rise in tourism, local demand from family housing subsidy, high demand for residential accommodations among foreigners and students. House price dynamics accelerated rapidly in all types of settlements, and exceptionally rapidly in the capital according to MNB Report. Hungary provides promising real estate investment opportunity in Europe to international investors investors looking for stable rental income and high appreciation of property.
Prices
The real estate prices in Hungary, particularly in capital Budapest, is the still low compared other major European cities, makes it attractive for foreigners to invest in properties. The Property prices in capital floats around EUR 2,500 to EUR 3,000 in downtown districts of 5 and 6. Lake Balaton area is super popular with Germans, French, Brits and other europeans.
Property taxes
Companies or legal persons can also buy properties.. Buying an apartment in Hungary is a straight forward process. The paper work for this is always prepared by the lawyer when the contract of sale is signed with usual 10% deposit and sale registered in 30-60 days.
- Registration costs – 4%
- Lawyer fee 1%
- Broker commission – (Paid by seller)
- VAT 5% (only for newly built properties)
Note: If you buy a land and construct a house on it within 4 years, property tax can be reduced to 0%.
Golden Visa
Real Estate Investments are not tied to Guest investor program (golden visa). This option has been removed according to a decree in June 2024
Best Locations to Buy
– The top locations to buy a property in Hungary are
- Budapest (Downtown districts I, II, III, V, VI, VII, IX, XI) and most expensive Districts XII and XIV
- Lake Balaton Riviera (Siófok, Balatonfüred, Balatonalmádi, Keszthely, Zamárdi, Balatonkenese and Fonyód )
- Other Cities ( Debrecen, Szolnok, Pecs, Gyor, Szeged, Eger)
Capital Gains Tax
Capital gains tax is applicable when a property is sold within 5 years of purchase. The rate is 27% for residents and 32% for non-residents. If a property is sold after 5 years of purchase, then the rate is reduced to 20%.
Income Tax from rental income can vary from 15% to 35%.
Wealth Taxes
There is no net wealth/worth taxes in Hungary. The general inheritance and gift tax rate is 18%, and a preferential 9% tax rate applies to residential property.