Taxation in Hungary

Everything about taxation in Hungary - FAQ

WHAT TAXATION OBLIGATION DO I HAVE FOR A RENTED PROPERTY if I rent it for long term?

Personal income tax is payable in this case, which is 15%. It is an international principle that the real estate is taxed where it is located, so the income from Hungarian property is taxed in Hungary. Long-term leasing is a tax-exempt activity, so the property can be rented out without VAT.

What taxation obligation do I have for a rented property if I rent it for a short period of time?

Short-term leasing is more complex and has a lot of administration. Basically, the income from this activity is 15% PTA, but 18% VAT is payable because this activity is subject to VAT. However, the annual tax revenue of 8 million HUF is eligible for tax refund, which means that no VAT is payable.

Do I still have to pay tax here if I pay tax at my home country?

As a general rule, the property is taxed where it is located. Therefore, the tax on income from Hungarian property is payable in Hungary.

Is it possible to reduce the tax with the costs?

Yes, personal income tax can be reduced with the total deductible costs. All costs associated with all rental activities are deductible, therefore decreasing your tax base.

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