Buying a Property in Budapest

Everything about buying an apartment in Budapest - FAQ

In what districts should I buy?

Buying property in all districts could be beneficial. But as in every other city, it depends on the circumstances and criteria of the buyers to find the best area for purchasing. If someone is looking for the highest prestige, then they should look for district 5 and its neighbours such as 6, 7, 8, 9 and 13 on the Pest side, and district 1, 2 and 12 on the Buda side. Due to the real estate market's latest blooming, the prices could be higher in these areas. If someone is looking for an investment to rent out, it makes sense to choose a real estate with good access to the metro lines.

Is it worth buying an unrenovated apartment?

Buying an unrenovated apartment can be beneficial. If the property has a good price (eg.: due to the condition, or the owner want to sell it quickly) after purchasing, added value can be realized by renovation. A freshly renovated apartment is always more attractive to the resale and rental market. Or if you want to style the property for your needs, it is easier to accomplish and doesn’t have to make compromises with the style and taste of an already renovated apartment. Lastly, you have to consider that a property renovation requires time, effort and - more importantly - a good renovation team.

Are there any new projects currently in Budapest?

Budapest has a lot of newly built projects running currently, many developers -old and new ones- decided to start their projects. You can find more information and the latest news about developing areas in Budapest here.

Do I need permission to buy property as a foreigner?

Residents of the European Union, Switzerland and Norway can purchase apartments in Hungary without any limitation. Residents outside of these countries require getting a purchase permit from the local government in order to register their ownership. This is a formality with a background check on the buyer. This permit is requested following the contract signing and the first 10% down payment. Legally the authorities have 60 days to respond and conclude the permit.

Do I get citizenship when I buy a property?

Buying a property does not have any direct influence on immigration issues.

Can I buy as an individual or a company?

Anyone can buy as a private person; citizens outside of Europe need a purchase permit.

When is it worth to set up a company?

We suggest to operate as a private person with up to 3 or 4 properties because it is simpler for the owner and the taxation is much more favourable as well. If the owner intends to sell the property after 5 years of purchase, it is exempt if it was privately owned. On the contrary, if a company sells it at any time, the profits must be deducted.

In the case of owning more than 5 real estates, however, we definitely recommend to set up a company to make sure that Hungarian taxation requirements are fulfilled.

Is the price negotiable?

There are owners with whom buyers can negotiate and they will listen to offers and their price is set with some room for negotiation. Although the level of negotiation varies from psychological value to real discounts. There are owners of course who strictly insist on their asking price, and this is more common by developers.

What currency can I pay?

Being in Hungary the vast majority of the transactions are in HUF, but as there are international sellers, transactions could be done in other currencies as well. This is up to the parties; the purchase contract always applies an exchange rate to HUF for the registry and tax reasons.

Do you have loans for non-Hungarian citizens?

Banks in Hungary are very conservative in financing property. Besides the property value, it is at least as important to check the income of the person taking the mortgage (and they don’t calculate with the income from the property, just the income from salary). Foreign nationals employed in Hungary with certain requisites can get financing here. For foreigners with EU employment, there are some banks, which might be open to give financing, but besides these options, there aren't any more opportunities.

Do I have to travel to Budapest if I want to buy?

The real estate purchase can be arranged in person, or with a power of attorney as well. The later can be signed at a Hungarian consulate or the notary public. In case it is signed at the notary public, it requires further authorization called an apostille that can normally be arranged by the foreign ministries of the actual country. The power of attorney can be given to the lawyer who is representing the buyer in the process.

Do I need a local lawyer? How much does it cost?

The purchase contract needs to be prepared in a format for the land registry to accept it. The land registry requires the countersigning of a lawyer or a notary for the purchase contract. In Hungary, the purchase contracts are prepared normally by lawyers. It is important to know that a lawyer countersigning the contract cannot be powered by a power of attorney to sign the contract on behalf of any of the parties. If a seller or a buyer has someone empowered for signing a contract on their behalf then normally another colleague of the office is the countersigning lawyer.

What are the costs of stamp duty, tax, and lawyer?

The purchase costs are a bit over 5% of the purchase value, this breaks down to:

• 4% stamp duty
• 1%+VAT legal cost for the attorney
• Approx. 200-350 EUR for purchase permits for non-EU citizens
• Another 40-50 EUR registry fees

Do I need to be personally present in real estate possession?

Not necessarily, the property can be taken over by a person or management company empowered.

Do I need to hire Property Management?

It is not necessary, but in the case of living abroad or having little time to deal with this, it is advisable.

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