Property purchase in Hungary as a foreigner

August 24, 2022

Are you moving to Hungary? Or are you already living here? If you are planning long-term, you might consider buying a home for yourself and your family instead of living in a rental. But how to go about property purchase? Do you need a license? And what is property tax? Find out here!

Please note: Below we detail the purchase of residential property in Hungary. Buying agricultural land is regulated differently.

Real estate purchase requires a lawyer

In Hungary, natural persons can purchase real estate for residential use without too much hassle. However, once you have found a home to your liking and agreed with the seller, you will need to find a lawyer to create the purchase agreement and then file the result with the land registry. The lawyer supervises the procedure, making sure it is compliant with regulations and both parties understand all conditions.

In Hungary, traditionally the buyer finds a lawyer and pays for their services, which is either a fixed price or a commission somewhere between 0.5% and 3% of the purchase price. The seller and the buyer can also decide to split the bill, or have their separate lawyers represent their interests.

Residential property purchase without a license

Depending on your nationality, you might need a license to do so from the local government office. However, you do not need a license if you are

  • a citizen of Hungary (including dual citizens),
  • a citizen of an EU member state,
  • a citizen of Norway, Lichtenstein, Iceland or Switzerland,
  • coming into possession of real estate as an inheritance,

You don’t need a license either if you are buying real estate for your Hungarian company where that piece of real estate is essential for company operation, e.g. if you are planning to rent it. This is a popular business model among foreigners in Hungary, especially if they want to get residency for the whole family through a stable investment. Learn more here.

License from the local government office

If you do not belong to the above groups, you will need a license from the government office that has local jurisdiction where the property you intend to buy is situated. During the procedure, the government office will consult

  • the local municipality to see if the purchase harms the interests of the municipality or Hungary,
  • the Immigration Office to confirm you are not banned from Hungary,
  • the Police to confirm you are not wanted for criminal activities.

The license application can be submitted by the lawyer handling the purchase. The application fee is HUF 50,000 (ca. EUR 125), or only HUF 10,000 (ca. EUR 25) if you are a permanent resident of Hungary and you have already applied for citizenship. The procedure takes 15-30 days.

Documents you need to get your property purchase license

To apply for the license for residential property purchase, you will need the following documents:

  • Application form
  • Proof of payment of the application fee
  • Certified or notarized copy of your ID document (passport, driver’s license, or Hungarian ID)
  • Preliminary purchase agreement for the property in question
  • Title deed of the property in question (not older than 21 days)
  • Power of attorney for the lawyer in charge of the deal
  • Criminal record of the applicant to confirm there are no charges against them

Hungarian property tax

Once you have received your property purchase license and the purchase agreement is closed, your lawyer will register the purchase with the land registry. Once that is completed, you will be required to pay property tax; you will receive a letter from the Tax Authority, after which you will have 30 days to comply. Property tax is normally 4% of the purchase price, however, benefits are available.

  • If the buyer is under 35 years of age, property tax is 2%
  • If the buyer is under 35 years of age and the purchase price is under HUF 15 million (ca. EUR 37,500), property tax is 0%.
  • If the property is newly built and the purchase price is under HUF 15 million (ca. EUR 37,500), the property tax is 0%. If the purchase price is higher, the part under HUF 15 million remains tax free.
  • If you buy a vacant lot and build a house within 4 years, property tax is 0%. However, the local municipality may impose a land tax.

Buy your new home in Hungary

Residential property purchase in Hungary starts with finding your dream home. Then you will need a lawyer to take care of the procedure. If you are not a citizen of Hungary, you might need a property purchase license before you can finalize the deal – your lawyer can take care of it. After purchase, you will be required to pay property tax, which is normally 4% of the purchase price.

Helpers Hungary offers immigration and business assistance to foreigners moving to Hungary and/or setting up their business here. Property purchase may be the next big step in your life in Hungary, and we would be happy to help, whether it is for residential or business purposes.

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