The aim of this information is to enable you to get acquainted with the official procedures on how to become an owner of a real estate in Hungary.
Exchange foreigners are entitled to own estates in inside areas only (dwelling houses, weekend cottages, plots, shops etc.) according to a regulation of 1996. Currently exchange foreigners are not permitted to own estates situated in outside areas (like vineyards, plantation, forest, orchards), but there is an opportunity to found a lease that offers an usufruct right.
The procedure of the contract of sale
As soon as you have found the most appropriate estate for you and your family among our offers a contract can be concluded. In the period of time from the sales contract until the moment of the entry of your property into the land registry your interests are represented by the lawyer who has drafted the contract. The task of the lawyer is to obtain the necessary documents. The approval proceeding takes about 30 days. The completion of the contract requires an attested copy of your passport or identity card by the notary. Of course, the lawyer makes sure before the completion of the contract that the property is free of any charges (mortgage, track right etc.). In case there are any burdens charged on the property the lawyer looks after your interests by applying for clearance of these burdens.
After permission has been granted by the administration you have acquired your estate practically and within 30 days from this time the assignment will be documented in the land registry.
The payment of the purchase price takes place in your own interest by putting down a deposit and giving it to the depositor (the lawyer) and with a special deposit contract issued by the lawyer. This document is the enclosure of your purchase contract. The seller gets only the agreed deposit from the lawyer - up to 25,000 EUR 20%, above this 10% of the purchase price. The rest of the amount will be handed over by the lawyer (trustee) after the permission from the administration has arrived and the estate has been vacated totally and has been cleaned.
Expenses in correlation with the purchase contract
The expenses of approval procedure are 300 EUR. The lawyer's fee for drafting the contract as well as the completion of the official permission is 1% of the purchase amount, but at least 400 EUR.
Our agency undertakes the complete service following the completion of the purchase contract. We contribute you by opening a bank account, which is essential for the payment of the later following bills coming from the suppliers (water, electricity, gas, telephone) as well as - on your demand - application for a home insurance.
In case that your estate requires renovation, reconstruction or completion we provide the most suitable craftsmen from every trade who carry out these works at reasonable prices and in excellent quality. We organize your removal by a resident forwarding agent, which can be manifold reasonable than you know about this.
Summary: We take off all your trouble which may appear in context with the purchase. Our clients will be our friends.
Conveyance charge
A further fee is the land acquisition tax which has to be paid to the Hungarian State according to the 1990 XIII decree. The amount of tax obligation depends on the valute of the estate - up to 4,000,000 HUf (approx. 16,500 EUR) 2%, over and above that amount 4% for a dwelling house. For any other types of houses the tax obligation is 4%. A company named Hungarian Tax and Duty Office will request this tax by means of an official letter forwarded to your permanent residence address.
Medical care, health insurance
Hungary is a member of the European Union since 1 st of May 2004 which entitles citizens of other European States cost-free medical care by presenting a valid health insurance card and the form E 121 from your health insurance company. Please look after this on the homepage of your Foreign Office.
Local government fees and other expenses
The amount of the municipal tax depends on the rules of the local administration of the place where your estate is situated, but it is far lower than in other countries. In case of medium-sized dwelling house it can come up to 200-300 EUR per annum. The refuse collection is 5-8 EUR per month. The electricity expenses are approx. 12 cent per kilowatt hour, water and sewage 3 EUR per cube meter, gas 30-40 cent per cube meter depending on the consumption.
Citizens coming from other EU states who intend to live in Hungary with a permanent residence are not obliged to apply for a permission in correlation with the estate purchase if they give a written intention statement.
Profit tax (speculation tax)
Dwelling-house and flat: If somebody in the first year afther the purchase sell the house or flat need to pay profit tax for the Hungarian State which is 16% of the profit the second year the tax is 16% of 90% the third year 16% of 60% in the forth year 16% of 30% and in the fifth year tax free.
Plot and weekend house: If somebody afther the purchase in the first fifteen year sell the property and profit develop so need to pay profit tax for the Hungarian State. In case you are going to sell your estate within fifteen years and you gain profit, you have to pay income tax to the Hungarian State, depending on your profit. The rate of the income tax is 16% within the first five years, from the sixth year it gets 10% less every year, so after sixteen years it is free of tax.
We reserve a right in case of any error or in case the estate should have been sold meanwhile.
