Buying property in Hungary does not only consist of paying the purchase price. During the purchase process, several additional costs arise that are important to know and plan for in advance. These include the property acquisition duty, possible tax obligations, as well as other related expenses.
In this article, we present in detail the costs you should expect when purchasing real estate in Hungary.
Property Acquisition Duty in Hungary
The most important cost related to acquiring property is the property acquisition duty, which is paid by the buyer to the state.
The general rate of the duty is:
4% of the market value of the property.
For example, in the case of a property worth 50 million HUF, the payable duty is 2 million HUF.
The duty is assessed by the National Tax and Customs Administration (NAV) after submitting the sale and purchase agreement, and installment payment is usually available upon request.
Duty Reductions and Exemptions
In certain cases, the property acquisition duty can be reduced or avoided:
- In case of exchanging properties, duty is only paid on the difference in value
- First-time homebuyers under the age of 35 may receive a discount up to a certain value limit
- Gifts within the family (between direct relatives) are exempt from duty
- In some cases, additional benefits are available for newly built properties
The current conditions and detailed rules must always be assessed individually.
Taxation After Selling Property
It is important to note that, in addition to acquiring a property, tax obligations may also arise when selling it.
A 15% personal income tax (PIT) must be paid on the profit from the sale of a property; however, the taxable amount decreases over the years:
- Year 1: 100% of the profit is taxable
- Year 2: 90%
- Year 3: 60%
- Year 4: 30%
- From year 5: tax-free
This means that in the case of long-term ownership, the sale of the property may become tax-exempt.
Other Costs When Buying Property
In addition to the duty, several other costs must also be considered:
Legal Fees
The preparation of the sale and purchase agreement must be carried out with the involvement of a lawyer.
The fee is typically 0.5–1.5% of the purchase price.
Land Registry Fees
The fee for registering ownership rights is currently 6,600 HUF.
Loan-Related Costs
If the purchase is financed by a loan, additional expenses may arise:
- property valuation fee
- notary fee
- bank charges
Other Additional Costs
- renovation costs
- furnishing and equipment
- moving expenses
Local Taxes and Maintenance Costs
After acquiring the property, certain recurring costs must also be taken into account:
- building tax (depending on the municipality)
- land tax
- utility costs
- maintenance expenses
The amount of these costs depends on the local municipality and the type of property.
Summary
The total cost of purchasing property consists of several components. In addition to the purchase price, the most significant item is the 4% property acquisition duty, but legal fees, land registry costs, and other expenses must also be considered.
Careful planning and prior assessment of costs help avoid unpleasant surprises and make the purchasing process safer.