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Frequently asked questions

How can foreigners purchase property in Hungary?

Foreigners can purchase property the same way as Hungarian citizens. As a private person you can own one property without any permission. If you wish to buy another property you can apply for a permit, which means submitting an application to the local authorities to acquire the properties(s). The costs associated with the procedure is approximately € 250. You can also chose to establish a local Hungarian company, usually a limited liability company. This is preferable if you wish to acquire multiple properties.

What is the procedure of buying a property in Hungary?

When you find the property you like the first step is to agree verbally upon the price and conditions with the seller. After this you need to have a Hungarian registered lawyer start drafting the purchase agreement. In order to ensure that the property is taken "off the market" the buyer should leave a deposit (usually 10% of the purchase price). That ensures that the property is no longer available to other potential buyers. (The real estate market in Hungary, but especially in Budapest is very fast, not securing a property that you like in time can mean that some clients either lose the opportunity to bid (as the property is sold) or are drawn into a biding war with other buyers.) The purchase contract usually includes 2 main payment periods. The first one is usually when the contract is signed and is equal to 10% of the agreed price. (Hungarian law protects buyers that pay this deposit in that if for whatever reason the seller backs out of the contact he/she is obliged to pay the double of the deposit.) The remaining 90% of the purchase price needs to be paid full in 30 to 45 days after signing the contract. Payment of this can be stipulated upon certain conditions, e.g.: concluding certain required work, installation of appliances, providing the buyer requested documentation, etc. It is recommended to go to a notariate to certify your identity from your passport. This issue can be done locally.

What are the additional expenses when buying an apartment?

  • For 4 million HUF of the purchase price 2% stamp duty has to be paid. For the remaining amount of the purchase price above the first 4 million HUF 6% stamp duty has to be paid. (E.g.: If an apartment costs 20 million HUF then for 4 million HUF the stamp duty is 80.000 HUF (2%) and for the remaining 16 million HUF the stamp duty is 960.000 HUF (6%), so all together you pay 1.040.000 HUF stamp duty - ca. 5,2%).
  • solicitor's fee: 1,5%
  • permit fee: ca. 250€ (only applies when purchasing your 2nd property in Hungary)

Do I have to come to Budapest in order to buy?

When buying as a private you donít need to come to Budapest, one may sign a power of attorney in the Hungarian embassy and send it to Budapest or your sales agent can sign the contract on your behalf (with an official authorization from you).

What are the advantages of renovation?

Being open for renovation is recommended for short-term and long-term investors, as well. The cost of the renovation is usually ca. 15% of the value of the property (including the modernization of the heating system, moving walls, painting works, etc.). The renovation works ususally take 6-8 weeks all together. After the refurbishing is completed, the value of the property increases by an average of 25% right away.

Which properties are the easiest to rent out and / or sell at a later date?

Renovated, fully furnished apartments in central areas of the capital - Districts V, VI, VII. The higher the standard of renovation and furnishing is, the more it appeals to the high quality, long term tenants. Ideally these tenants are business people, diplomats, or foreign students. Tenants will have to want to live in the apartment, so the flat needs to be in the best possible condition, but the location is also very important.

What is the anticipated rental income I can expect to receive?

You can expect an annual rental yield of between 6% and 9%.

What is the accepted commission when renting an apartment through an agency?

One month's rent paid upon signing the contract if the apartment is rented for a year.

What's the accepted management fee for a rented apartment?

10% of the monthly rent.

What are the advantages of property management?

Managing the already rented apartment is the least pleasant duties of a property owner. Keeping an eye on the flat, making the tenants pay always in time, managing the utility bills require regular maintanance, moreover, it requires someone being regulary available around the apartment. If you live fairly far from your rented apartment, or don't have time/energy to take all these duties, it is recommended to give the management of your property to a professional management company. This way a signed agreement will ensure that you will always receive the rent in time, all the utility bills will be sorted out and all the necessary repairs will be taken care of, without you having to spend your valuable time on it.