FAQ
Before buying or selling a house in Hungary you will probably have many questions, we answer the most frequent questions regarding the following topics:
Taxation Rules
1, How much Tax do I need to pay if I buy a house in Hungary?
There is a 4% wealth acquisition tax in Hungary if you buy a house. The paper work for this is always prepared by the lawyer when the contract of sale is signed. You need to pay that within a few months from the moment you gain full ownership of the property.
If you are also selling a house in Hungary, you only need to pay the 4% tax from the value of the property you buy minus the value of the property you sell. If you buy a cheaper house then you sell, you do not need to pay this tax.
2, How much tax do I need to pay if I buy a second house in Hungary?
You only need to pay the above mentioned 4% wealth acquisition tax. There are no other taxes in case of buying second house in Hungary.
3, How much tax do I need to pay If I am selling a house in Hungary?
If you are selling your house in Hungary not later than 5 years after buying it and you are making profit from it, you will need to pay tax from it. In the first two years from the moment, you buy the house the tax is 15% of the profit. This how the amount of tax changes later:
If you have invested you your property by renovating/modernising it and you have the bills about the renovation, then the money spent on the renovation can be deducted from the from the profit, therefore it will decrease the amount of tax you will pay.
4, Is there a yearly Tax that I need to pay if I have a property in Hungary?
The short answer is no. However, very few municipalities charge households a yearly fee. This is never more than 100 euros.
Property buying and building rules
5, What are the restrictions of buying land and property in Hungary?
As an EU citizen, the same rules apply to you as to Hungarian citizens. You are free to buy as many in-zone properties as you would like to. In case of these properties there is no limitation in terms of land size.
However, when it comes to agricultural & forest land (many farm houses and vineyards are registered and agricultural land), you can buy only up to 10 000 m2 land in total. It is a longer process to gain ownership of this this type of land than in-zone land. Please read more about this here:
https://myhungarianhouse.com/purchase-process
If you would like to buy more than 10 000 m2 agricultural land in Hungary, you will need to become a farmer officially.
6, On what percentage of the plot can I build buildings and do I need a permit?
If you are planning to build extra buildings on your plot in Hungary you need to apply for a permit at the land registry. This costs a couple of hundreds of euros. The process included a surveyor coming to your property to make measurements.
In villages / towns (in-zone land) you can build on up to 30% of your land. Of course, you need to deduct from that the size of buildings already present.
On agricultural land, this number is only 3%. Furthermore, on agricultural land is somewhat harder to get permission to build buildings that are not agricultural related.
Transferring money internationally & money exchange tips
7, What are the total costs of buying a house from “My Hungarian House”?
Our agency fee is excluded from the prices you see on our website. The agency fee depends on the type of property you buy and how you would like to buy it. For the details, please contact us: milan@myhungarianhouse.com
Please note that we can only accept the agency fee in HUF in case you transfer it. Of course, it does not matter how you pay the agency fee, you will receive a receipt from us.
8, Do I have to pay for the property in Hungarian Forints (HUF)?
That depends on what your agreement is with the seller. If the owner accepts EURO or GBP then you can do that. If the seller only excepts Hungarian Forints that I recommend you open a Wise bank account, which has the one of the exchange rates and very little international transfer fees. If you need to change cash, I highly recommend “Correct Exchange” as the have good exchange rates and low handling fees. You can find them in many cities in Hungary such as Eger, Miskolc and Pécs.
9, Where can I see the official HUF exchange rates in Hungary?
The Hungarian National Bank’s website will always show you the current exchange rates: www.mnb.hu/arfolyamok
This is the exchange rate the is usually used in contracts, as the lawyer always needs to write the HUF purchase price in the contract too as you will need to pay tax from that.
10, Is it easy to transfers money to Hungary?
Yes, however, there may be some obstacles. Foreign banks often put international transfers on hold if they think the transfer may be fraudulent. In cases like this you will need to look at your bank account and if you that a payment is on hold you will need call your bank to authorise the payment. One way to avoid this is paying large sums in instalments. According to our experience holing payments back is less likely if you are using a Wise bank account.
11, Should pay the in cash during the house take-over?
In Hungary you can only take-over the house when you have paid the fully purchase price to the seller (unless you buy the property in instalments). Therefore, it is best to pay the last 10% or 20% of the purchase price during take-over in cash so the buyer will not have to wait for the money to arrive to their bank account. (buyers & sellers sign an official document about handing over the cash) Alternatively you can also use Wise Bank account, as it usually arrives the same day if the transfer takes place on a weekday. If you pay the last payment from a normal foreign bank account, you may need to wait 2-3 working days for the money to arrive and only then you will be able to take-over your property.
The last part of the purchase price is only handed-over to the seller when the buyers find the house in the condition described in the contract, therefore transferring the money before making sure that house has been emptied is not recommended.
12, How can I make sure the seller empties the house I buy?
We work with a penalty fee in our contracts. This penalty fee has to be paid by the seller to the buyer if he is unable to hand-over the property on time in the described condition.
Information about becoming a resident
13, How can I become a resident in Hungary officially and what advantages does it have?
We apply for residency cards for our clients. It’s a somewhat bureaucratic process and takes about 4-6 weeks to get it. It is important that you are insured in your home country when we apply for the residency for you. You also have to make sure that you continuously have an official address, therefore you should only unregister at the municipality in your home town when you have got your residency in Hungary already.
If you spend more than half of the year in Hungary, it is a good idea to apply for the address card (called “lakcím kártya” in Hungarian). This comes with certain advantages:
14, Is it a must to become a resident then? Will I be very limited in Hungary without it?
No, it is not a must. If you are an EU citizen and you have an EHIC (blue colour EU health insurance card) you will have emergency health insurance in Hungary. However, this covers only emergency cases. (If you are from the United Kingdom, you will need a Global Health Insurance Card to be covered in Hungary)
In terms of paying your utility bills you will have two options without a residency card: paying via cheque or paying your bills via bank transfer. If you are not buying a permanent home here, of course only the latter will be a suitable option for you. I highly recommend you open a Wise bank account for this purpose, as it has a Forint pocket and it is simpler to transfer money from it to the utility providers than from a Dutch, British or Belgian bank account.
From both the EU & the UK your car insurance will be valid in Hungary, however for the details please ask for more information from your car insurance provider.
If you are going to work in Hungary, you need to have a residency card, as your employer will need your Tax number and health insurance number from you, for both of those number you need a residency card first.
Information about buying an encumbered property and paying lawyer’s escrow account
15, How can I buy an encumbered property safely in Hungary?
It is possible to buy it safely, however it is a slightly longer process than buying an unencumbered property: we need to collect information from the bank/bailiff about the exact amount of the debt. It needs to be stated in the contract that the buyer pays the bank/bailiff directly the debt. Once it has been paid, it needs to be registered at the land registry. The debt is cleared off at the land registry either by the lawyer or the seller when they have documents proving that the debt has been paid already. Once it has been paid and you see proof of that, you are safe to pay the remaining amount to the seller.
16, Are there cases when it is not recommended to buy an encumbered property?
It can be an issue when there is a high amount of debt on the house: this means that you might need pay a large percentage of the purchase price to the bank/bailiff when you sign the contract of sale. It is still safe, but you need to make a large initial payment, which is often not favoured by sellers.
However, in some cases the debt is higher than the purchase price. In those cases, it is not recommended to buy the property anymore, since the property will stay encumbered even after paying the full purchase price, which means that you would buy a property with a debt on your name.
17, Should I transfer the purchase price directly to the seller or to the lawyer’s escrow account?
There is quiet some false information circling around on the internet regarding this question. In the vast majority of the cases the buyers pay directly the sellers in Hungary. This can be either a bank transfer or by cash. It is safe to pay the sellers directly since even if the sellers do not notify the lawyer about receiving a payment, the buyer can also prove to the lawyer that the payment has been made with a statement from his bank or a document signed by two witnesses (or a lawyer) regarding handing over cash.
If there are debts on the property you are about to buy, it is recommended to pay the creditor (bank or bailiff) directly to clear off the debts from the property. In cases of properties with debts transferring the money to the lawyer’s escrow account who makes the contract can be an option, however this is an expensive process. Sustaining an escrow account in Hungary is expensive, therefore paying with this method comes with increased administration costs and there is an extra transfer fee as well, as the money needs to be sent from the escrow account to the seller’s account too and transferring money between Hungarian accounts in most cases is not free. (All of these extra fees are covered by the buyer).
There are cases when the amount of debt on the property keeps on changing, these can be very difficult situation when transferring the money to a lawyer’s escrow account can be a good solution.
Useful tips about living & working in Hungary
18, How can I find a job in Hungary?
There are a high number of English and Dutch speaking jobs in Hungary. Many of those jobs can be done from home these days and they only require you rarely to travel to their office. The most popular vacancy website in Hungary is called www.profession.hu. It is also recommended to make a profile on www.linkedin.com as there are many vacancies there. If you already have a job contract when you buy your house, please let us know as we will need to send your work contract to the migration office.
19, How is the public transportation?
You can reach even the smallest villages by buses and some of them by train as well. Buses in general are much more reliable than trains. Although Google Maps will show you how to get from A to B, we recommend you use www.menetrendek.hu, which is a more reliable source of information.
A very popular car sharing service used by the locals is www.oszkar.com. This is a great option if you want to go to Budapest or from Budapest to the countryside.