Expenses When Purchasing
Typical costs when acquiring property in Hungary include:
a) 1,5 % solicitor's fee, paid customarily by the buyer upon signing the purchase
contract. A lawyer's participation is required in Hungary. All lawyers have the right to
countersign your Purchase contract, but it is very advisable to use a real estate
specialist. They are the ones who can make sure you are not becoming the victim of a
property scam, and can save you a significant amount of time at taking care of
paperwork. Email or call me and I can introduce you to the best and safest (and not the
most expensive) specialists - even if you are not using my other services which you
should :) .
b) 3 % buyer agent's commission, paid upon signing the purchase contract. Using
the services of a buyer's agent is optional. Check my "fees" section - I offer special
discounts to some people, you might be one of them.
Prices quoted above do not include 20% VAT which you must also pay with a company
invoice.
Property Acquisition Duty (or Stamp Duty)
Slightly below 6 % of the market value.
In the cases of residential real estates, this tax-like expense is serving as a one-time
property tax. There is no other property tax if the property's value is below HU Ft 100
million.
Within the frameworks of its official procedure, the Land Registry Office notifies the
relevant Duty Office (Illetékhivatal) to establish the duty of the transfer of the ownership
right to be paid by the new owner.
The Duty Office will establish the amount and orders the payment of the purchase
stamp-duty (illeték) to be paid within fifteen days following the receipt of the order. You
can expect this to happen a few months (2 - 6 months lately) after your ownership is
registered by the Land Registry Office. The amount of the duty is based on the type and
the purchase price of the real estate:
Typical costs when acquiring property in Hungary include:
a) 1,5 % solicitor's fee, paid customarily by the buyer upon signing the purchase
contract. A lawyer's participation is required in Hungary. All lawyers have the right to
countersign your Purchase contract, but it is very advisable to use a real estate
specialist. They are the ones who can make sure you are not becoming the victim of a
property scam, and can save you a significant amount of time at taking care of
paperwork. Email or call me and I can introduce you to the best and safest (and not the
most expensive) specialists - even if you are not using my other services which you
should :) .
b) 3 % buyer agent's commission, paid upon signing the purchase contract. Using
the services of a buyer's agent is optional. Check my "fees" section - I offer special
discounts to some people, you might be one of them.
Prices quoted above do not include 20% VAT which you must also pay with a company
invoice.
Property Acquisition Duty (or Stamp Duty)
Slightly below 6 % of the market value.
In the cases of residential real estates, this tax-like expense is serving as a one-time
property tax. There is no other property tax if the property's value is below HU Ft 100
million.
Within the frameworks of its official procedure, the Land Registry Office notifies the
relevant Duty Office (Illetékhivatal) to establish the duty of the transfer of the ownership
right to be paid by the new owner.
The Duty Office will establish the amount and orders the payment of the purchase
stamp-duty (illeték) to be paid within fifteen days following the receipt of the order. You
can expect this to happen a few months (2 - 6 months lately) after your ownership is
registered by the Land Registry Office. The amount of the duty is based on the type and
the purchase price of the real estate:
More information on property acquisition duty
- from www.hidasi.hu -
Duty must be paid on acquisition of some movable property (e.g. vehicles) or rights
representing assets (e.g. usufruct on real estate) for a valuable consideration or by
means other than inheritance or gift. This rule must also be applied in the case of an
inheritance contract.
The duty must be paid by the contracting party. In case of exchange of residential
property ownership, the duty is paid by each contracting party in the proportion
equivalent to the proportion constituted the value of residential properties he acquires
relative to the total value of all the residential properties involved in the transaction.
The general rate of duty is 10% of the market value of the real estate acquired. In the
case of residential property, the rate is 2% up to HU Ft 4 million per house, and 6%
above this.
If title to the real estate is acquired by a business whose core activity is real estate
trading, the amount of duty is 2%. This duty reduction is only applicable if the business
declares that it shall sell the property within two years.
The first purchase of a residential property of market value not exceeding HU Ft 30
million built for the purpose of sale by a business entitled to build, develop and sell
residential property is exempt from duty.
Also exempt from payment of duty is the acquisition of title to a residential property in
place of a residential property that has been destroyed or irreparably damaged by
natural disaster if the destroyed building was used as the home of a private person
who did not have a greater than 50% title to, or usufruct on, another residential
property. A further condition is that the value of the house did not exceed HUF 6 million.
A person under the age of 35 is eligible to a 50% reduction in duty on purchase of
residential property for the first time, if the value is under HU Ft 8 million, but the
reduction may not be greater than HU Ft 40,000.
In the case of purchase of title (ownership) to residential property by a private individual
who sold title to another residential property not more than one year prior to the
purchase, or who sells title to another residential property not more than one year
subsequent to the purchase, duty is payable on the difference between the market
value of the properties purchased and sold.
- from www.hidasi.hu -
Duty must be paid on acquisition of some movable property (e.g. vehicles) or rights
representing assets (e.g. usufruct on real estate) for a valuable consideration or by
means other than inheritance or gift. This rule must also be applied in the case of an
inheritance contract.
The duty must be paid by the contracting party. In case of exchange of residential
property ownership, the duty is paid by each contracting party in the proportion
equivalent to the proportion constituted the value of residential properties he acquires
relative to the total value of all the residential properties involved in the transaction.
The general rate of duty is 10% of the market value of the real estate acquired. In the
case of residential property, the rate is 2% up to HU Ft 4 million per house, and 6%
above this.
If title to the real estate is acquired by a business whose core activity is real estate
trading, the amount of duty is 2%. This duty reduction is only applicable if the business
declares that it shall sell the property within two years.
The first purchase of a residential property of market value not exceeding HU Ft 30
million built for the purpose of sale by a business entitled to build, develop and sell
residential property is exempt from duty.
Also exempt from payment of duty is the acquisition of title to a residential property in
place of a residential property that has been destroyed or irreparably damaged by
natural disaster if the destroyed building was used as the home of a private person
who did not have a greater than 50% title to, or usufruct on, another residential
property. A further condition is that the value of the house did not exceed HUF 6 million.
A person under the age of 35 is eligible to a 50% reduction in duty on purchase of
residential property for the first time, if the value is under HU Ft 8 million, but the
reduction may not be greater than HU Ft 40,000.
In the case of purchase of title (ownership) to residential property by a private individual
who sold title to another residential property not more than one year prior to the
purchase, or who sells title to another residential property not more than one year
subsequent to the purchase, duty is payable on the difference between the market
value of the properties purchased and sold.
In case of a residential real estate (an apartment or a house), the stamp-duty will be
2% after the first 4 million HU Ft, + 6% of the rest of the market value (typical);
In case of other real estates (eg. vacant land, building lot, commercial property,
separate garage or storage unit), the duty will be 10 % of the market value.
The duty (10%) of a residential building lot does not have to be paid up front if the
owner warrants to finish building a house on it within 4 years from the date of the
purchase, and will certify the fact of the building with a valid permission to reside within
the four year deadline.
2% after the first 4 million HU Ft, + 6% of the rest of the market value (typical);
In case of other real estates (eg. vacant land, building lot, commercial property,
separate garage or storage unit), the duty will be 10 % of the market value.
The duty (10%) of a residential building lot does not have to be paid up front if the
owner warrants to finish building a house on it within 4 years from the date of the
purchase, and will certify the fact of the building with a valid permission to reside within
the four year deadline.
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| - - - - - - - - - - - - - - - - - - - - - - - - - - Buying or Renting a Home in Hungary - - - - - - - - - - - - - - - - - - - - - - - - - - |
| View the comparative property value map of Budapest |
| Expenses when Purchasing Real Estate in Budapest, Hungary |
| Disclaimer: the article serves merely information purposes. Due to its extent, it is neither an all round information nor shall it be qualified as legal advice. |
| Expenses when Purchasing, property acquisition duty, stamp duty, property tax, property tax in Hungary, purchase of title, market value of property, property market value in Hungary |
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