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Investing in Hungarian Property

by admin
May 11, 2013

Hungary is a democratic republic with a growing and stable market economy. It is a member of the European Union, North Atlantic Treaty Organization (NATO), the Organisation for Economic Co-operation and Development (OECD), the Visegrád Group, and the Schengen Agreement.

Having these affiliations, Hungary has positioned itself as a great location for international investment.  There is rich culture and history in Hungary which adds to the advantages and reasons for its booming tourism industry. Additionally, with yields from rental income fetching between 7% and 10%; this is also favorable for international investors.

As the Hungarian housing market steadily recovers from the downturn; international investors are now focused on university towns with renewed enthusiasm. High traffic areas are another favorite for local and foreign investors alike.

Foreign investors should note that as of August 2010, the Hungarian government has banned lending based on mortgage-backed foreign currency. Nonetheless, investing in Hungarian property is now even better in 2013. There was a 0.6% drop in the annual inflation rate in March 2013. The annual inflation rate went from 2.8% to 2.2%. Reduced inflation rate is always great news for any economy as well as investments.

Foreign investors are not able to buy land that is over 6 000 m2. Also, for citizens of Africa, China, India, Pakistan, Syria, and several other countries; it is nearly impossible to buy a property in Hungary. However, since 2012; the Hungarian government has made a special legislation targeted at Chinese investors. These investors can receive a European passport if they help the Hungarian economy by buying some of the government’s debt. A minimum of €250 000 is required.

In deciding to buy a property in Hungary, it is important to note that land registration is a slow process that can take up to several months. However, the entire buying process from property selection to closing; takes anywhere from one to two months. In addition to a land registration fee that costs under USD$30; there are several property tax (stamp duty) brackets in Hungary and they are:

  • House value: 4%
  • An empty building plot or ground: 4%
  • A barn, commercial property, secondary or side building: 4%

 

There are no restrictions imposed on European Union citizens who wish to buy and invest in Hungarian properties. However, the requirements for international investors and developers to purchase and invest in Hungarian properties are very straightforward and simple. Here are the basic protocols and associated fees:

  • Obtain a permit: This process is usually hassle-free and permits are almost always granted.
  • Pay the permit fee: There is a stamp duty of about USD$215 associated with the permit.
  • Pay the lawyer’s fee: Lawyers typically ask for 1% of the sale price plus a 4% stamp duty at closing.
  • Pay the land registry fee: The land registry fee costs about USD$30

It is important to note that some properties have an associated annual tourist tax that could amount to less than or even exceed USD$800.


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    Hungary is one of Europe’s most beautiful countries. It is located in Central European with Budapest as its capital and largest city. In terms of international tourism, Hungary holds the number thirty (30) position for the most popular tourist destination in the world. This is an impressive recognition for a country with an area of only 35 919 square mile (93 030 km2).

    Hungary has ten (10) national parks and about one hundred eighty (180) nature preserves and protection areas. From the lush prairies of the Great Hungarian Plain to the gentle hills of the Pannonian Basin; Hungary’s landscape is full of charm and unique character.

    Real Estate in Hungary is a thriving industry offering properties of all categories. Without a doubt, the Hungarian property market is robust. International investors are seizing the opportunity to own a little piece of one of Central Europe’s most favored and charming nation.

    There are many reasons Hungary has become a prime real estate destination for luxury living. Many of these reasons are attributed to its natural environs that makes Hungarian Property Investment a very appealing deal for investors seeking profitable locations in central Europe.