Hungary real estate taxes: a complete guide

For buyers: types of real estate taxes in Hungary 

Transfer tax. Buyers of resale real estate pay transfer of ownership tax. It is charged at a 4% rate if the transaction is under €2.6 million, or 1 billion HUF. If a house or apartment is more expensive, the buyer pays an additional tax of 2% of the amount exceeding this value. 

The maximum possible transfer tax is around €520,000.

The tax amount is determined within 60 days after the transaction is concluded. The tax authority calculates and mails the receipt to the buyer. If a foreigner made the transaction without a registered address in Hungary, the notification is mailed to the foreign address.

The tax must be paid within 15 days of receiving the notification. The buyer can pay the tax in full or in instalments. To get a 12-month instalment plan, buyers need to apply to the Tax Administration. They must prove that paying the entire tax at once would put them in an unreasonably difficult financial situation.

Hungary residence permit by investment in real estate

Value Added Tax. Buyers of new buildings in Hungary pay a 27% VAT, usually included in the property price.

The reduced 5% VAT rate will be valid until December 31st, 2024. It applies to the first 150 m² of living space of an apartment complex and the first 300 m² of a detached house. The rest of the area is taxed at the standard rate of 27%.

Administrative fees that the buyer pays in addition to taxes:

•  €17 — registration of the property;
•  €130 — property acquisition permit if the buyer is a foreigner.

The buyer also pays their lawyer, real estate agent, and notary. Typically, these fees amount to approximately 5% of the value of the property.

A foreigner can get a Hungary residence permit by buying residential real estate for at least €500,000. A residence permit by purchasing real estate is issued for 10 years with the possibility of one extension for 10 more years.

Residential properties for getting a Hungary Golden Visa

Hungary, Budapest

€560,000+

Elegant apartments with 2 bedrooms, Fifth district, Budapest

100 m²

2

2

For owners: types of real estate taxes and utility expenses in Hungary

Property tax does not exist in Hungary. The exception is the areas near the resorts on Lake Hévíz and Lake Balaton: here, owners pay annual property tax since local municipalities set their own tax rate. The annual tax in the Lake Balaton area is €2—3 per 1 m².

Utilities are paid monthly. The payment amount depends on the size and type of the property. An 85 m² apartment costs the owner approximately €135 per month to maintain.

The rental income tax is 15% of the amount earned. It is declared together with the rest of the individual's income.

Property insurance in Hungary is voluntary. Only buyers who apply for a mortgage are required to take out insurance. For example, an insurance policy for a 190 m² Budapest apartment will be €180—300 a year. 

Individual cost calculation for residence by investment in Hungary

Get the cost calculation

For sellers: capital gains tax in Hungary

Property sellers pay the capital gains tax in Hungary. The rate is 15% of the income received. The tax base is determined by calculating purchase and maintenance expenses and the length of ownership.

To calculate income from the sale of real estate, subtract the following from the transaction value:

• the property cost;
• expenses that have increased the value of the property, such as repairs;
• expenses related to registration of transfer of ownership rights, i.e. services of notaries and lawyers.

The percentage of taxable income depends on the period of ownership of the property:

• if the property is sold in the first year of ownership, 100% of the income is taken into account;
• the second year — 90%.
• the third year — 60%.
• the fourth year — 30%.
• the fifth year and thereon — 0%.

A 15% tax is charged on the calculated amount.

Suppose a property purchased for €1,100,000 in 2021 and sold for €1,200,000 in 2024. Notary and lawyer expenses to subtract are €20,000, and repair expenses to subtract are €10,000. 

The income from selling this property is €70,000, but only 90% of this amount is taxable since the property was sold in the second year of ownership. When calculating, 90% of €70,000 is €63,000. This amount is subject to a 15% tax, meaning the seller pays €9,450. 

To calculate the approximate amount of tax on the sale of real estate, you can use the calculator on the official Hungary National Tax and Customs Administration website.

Other types of real estate taxes in Hungary 

The inheritance tax is generally 18%. However, a preferential rate of 9% applies to residential properties. 

Exemptions are applied: for example, lineal relatives of the deceased are tax-exempt. This means that children, siblings, and spouses can inherit property without being subject to tax.

Gift tax in Hungary is generally 18% as well, with a preferential rate of 9% for residential properties. Linear relatives are also exempt from this tax.

Main things to remember about Hungary’s real estate taxation

1. The tax on the purchase of resale real estate is 4% if the transaction amount is less than 2.6 million euros. Buyers of real estate in new buildings pay VAT at a rate of 5 or 27% — the tax is usually included in the price.
2. The property buyer can get a residence permit if the deal exceeds €500,000. The permit is issued for 10 years with the possibility of renewal.
3. The cost of maintaining real estate in Hungary consists of utility and insurance payments. Hungary has no annual property tax in all areas except for resort areas.
4. The tax rate on sales income in Hungary is fixed at 15%. However, the total amount to be paid depends on the cost of buying and maintaining housing and the duration of ownership of the property.
5. When renting out real estate, the owner pays 15% of the income received. 

Frequently Asked Questions