Buying a real estate property in Hungary. Special conditions for foreigners
Are you thinking about to move to Hungary, or have you heard the countries increasing investment opportunities, so you’ve decided to put your money in a charming flat or apartment in the heart of Budapest to feel the vibes and spirit of the Hungarian capital city or wanting to discover the natural beauty of the Hungarian countryside? Are you clueless, because you have no idea how to begin with the paperwork and all of the administration? Our law office is ready to help you along the procedure!
There is two types of properties in Hungary: on the one hand the agricultural and forestry land, on the other hand the non-agricultural and forestry land. The distinction is important, because a permission is have to be given by the competent authorities (Government Office) before one an agricultural and forestry land purchases.
- Citizens from the EU and European Economic Area and from Switzerland
Since Hungary joined the EU in 2004, EU citizens have found it much easier to buy property in the country. However, one thing is must be considered: although no longer needing a visa to cross the borders, if you plan on remaining in the country for more than 3 months you must get a residence permit. The process is very simple: the permission is can be applied for after entering the country, although it must be done within the first 30 days. The permission is generally valid for a year and allows foreigners to apply for tax and social security cards and purchase property.
- Citizens from non-EU countries
If you are a foreign legal person or a citizen from a non-EU country/EEA/Switzerland, you have to apply for a visa to enter Hungary which can be requested by your nearest embassy or consulate. The expiry date on your permit will depend on the circumstances of your visa, but can typically be extended for long-term relocation. After receiving the permit, the potential buyer can apply for permission to buy property from the local competent authority (Government Office).
- Approval procedure
An application provided for in Annex 1 for the acquisition of ownership of a real property by a foreign person shall be submitted to the Budapest and county government agency of jurisdiction by reference to the location of the real property in question (Section 2. of the Government Decree 251/2014 (X. 2.) Korm. – on the Acquisition by Foreigners of Real Estate Other Than Agricultural and Forestry Land).
The acquisition of real property shall be authorized e.g. if the applicant is a private entrepreneur or member of a sole proprietorship as provided for in the Act on Private Entrepreneurs and Sole Proprietorships, and wishes to pursue economic activities in Hungary, and the real property intended to be acquired is necessary for such activities, or wishes to take up residence in Hungary, and the acquisition of real property is not against public interest. Where a real property is acquired the Budapest and county government agency shall provide in the resolution of authorization that the applicant is to take up residence in Hungary at the latest within 90 days from the acquisition and to pursue economic operations falling within its scope of professional activities. In the event of failure to take up residence in Hungary or if residence is terminated, or if economic activities are no longer pursued, the buyer shall dispose of the real property within one year. (Paragraph b) of Subsection (1) of Section 4 and Section 7 of the Government Decree 251/2014 (X. 2.) Korm. – on the Acquisition by Foreigners of Real Estate Other Than Agricultural and Forestry Land).
The administrative time limit in procedures for the acquisition of real estate by foreigners shall be forty-five days.
A duty for a Permit Granted to Foreign Nationals for the Acquisition of Real Estate Property is chargeable. The duty on proceedings initiated for obtaining the permit necessary for the purchase of real estate property by a foreign legal or natural person shall be 50,000 forints for each property involved. A person with the right of free movement and residence or with permanent resident status, and with a petition for citizenship pending shall be required to pay a duty of 10,000 forints for the proceedings to obtain the permit necessary for the acquisition of residential property. (Annex XX. Duty for a Permit Granted to Foreign Nationals for the Acquisition of Real Estate Property of the Act XCIII of 1990 – on Duties).
Do you have some more questions regarding to the process flow of buying a property in Hungary? Do not hesitate to contact us!
Dobos István attorney at law (ügyvéd; Budapest), Kőhidi Ákos attorney at law (ügyvéd, Győr) / Szandra Reim