Q&As

What are the costs of purchasing property in Budapest?

 

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FOR THE MOST UP-TO-DATE INFORMATION ON TAXES IN HUNGARY PLEASE GO TO: English-language website of the Hungarian Tax and Financial Control Administration (APEH)

 
 

VAT is 27% (2018)

The full acquisition costs total approximately 10% + VAT of the purchase price which breaks down as follows:

There is NO VAT on the purchase price of the property, only on services.

Stamp duty 4 % (No VAT and due only about 2 to 12 months after purchase)

Lawyers fee 1.5 % + VAT

Our commission 3 % + VAT

Costs of the registration of ownership and the ownership sheets: EUR 45

Escrow fee: EUR 100 + VAT if you use the escrow account – not compulsory

Bank fee – of the escrow: 0.1% of the transferred amount.

Private permit (for non-EU residents) about €400 or company formations €900

Please note that it takes 30 to 60 days to get the permit, it is also standard to include in the contract that if you are refused a permit that you will purchase as a company.

In the 10 years since we have been dealing with international clients not one permit has been refused.

                                                       

Also note that if the property that you purchase will NOT be your main residence then you must pay annual council property tax.

Please ask your appointed lawyer for more detailed information.

 

Q: What is the agency fee when buying a flat?

A: 3% commission plus VAT

 

Q: What is the solicitor's (lawyer's) fee for preparing a contract of sale?

A:

  • 2% plus VAT of the sales price for properties valued 25 million forints and below.
  • 1.5% plus VAT of the sales price for properties valued 25 to 60 million forints.
  • 1% plus VAT for properties valued above 60 million forints.  

 

Q: What is the solicitor's (lawyer's) fee for establishing a company?

A: The legal firm charges 720 euros plus VAT  to establish the company for the client. 

 

Q: How much is Stamp Duty (Purchase Tax)?

A:

  • When buying as a company, the company will pay 2% tax if it intends to sell the flat within 2 years or 4% if sold later.
  • When buying as a private individual you will pay 2% for the first 4,000,000 HUF of the purchase price, and 4% for the outstanding amount.

 

Q: How much does it cost to renovate a property?

A: It depends on how much work needs to be done but the average price per sq/m is 300 - 450 euros plus VAT. But it completely depends on the quality of materials. 

 

Q: What is the commission when renting a flat through an agency?

A: The letting commission is one months rent plus VAT paid upon signing the contract. 

 

Q: What's the management fee for a rented flat?

A: The management fee is 10% of the monthly rental fee plus VAT.

 

Q: What is the tax on rent?

A: If the flat is owned privately (not by a company), then it is 15% of the rental income when renting a residential property to an individual or a business. Foreign nationals must apply for a tax ID and issue an invoice to the tenant. 

http://en.nav.gov.hu/taxation/taxinfo/rent_of_real_estates.html

 

Q: What is the tax on selling my property?

A: If the flat is owned privately then it is 15% of the profit. 

Year of acquisition Income (% of the accounted sum)

2019 Year 0 100%

2018 Year 1 100%

2017 Year 2 90%

2016 Year 3 60%

2015 Year 4 30%

2014 Year 5 0%

 

On the basis of the above, if the private individual sells his/her real property in 2019 that was acquired in 2014 or before he/she will not have any taxable income.

http://en.nav.gov.hu/taxation/taxinfo/sale_of_movable_and_immovable_property.html