Buying Property in Hungary as a Foreigner
- J+A
- Feb 28
- 7 min read
Updated: Mar 11
We understand the challenges of buying property abroad. If you're considering investing in real estate in Hungary, this comprehensive guide can help you navigate the Hungarian market. In this guide, we’ll walk you through everything you need to know, from searching for a home to understanding legal requirements and avoiding common pitfalls. Let’s dive in!
Table of content
1. How to Search for a House in Hungary
Finding a home in Hungary as a foreigner requires a good strategy and knowledge of the local real estate market. The best ways to search for properties include:
Real-estate websites:
Ingatlan.com – The largest real estate website in Hungary, featuring listings from individuals and agencies. This also the website we love to use, because basically all properties will be posted here.
Jófogás.hu – A site where individuals also post homes for sale and all kind of other products. (Like Ebay/Markplaats, so it is less reliable)
Otthon Centrum (oc.hu) – One of the largest real estate agencies with a wide range of listings.
Duna House (dh.hu) – A major real estate agency with many branches across Hungary.
OTP Ingatlanpont (otpip.hu/) – Another popular real estate agency with national coverage.
Working with Realtors:
Hiring a real estate agent can be beneficial for navigating the Hungarian market, especially for foreigners unfamiliar with the process. Many agencies provide English-speaking agents. The quality of real estate agent vary greatly in Hungary. Most of the realtors in Budapest are used to investors, but searching and selecting the right one is an art. We personally did not use a realtor for purchasing a property yet.
2. Pitfalls of Buying a Property in Hungary
While buying property in Hungary is relatively straightforward, there are certain pitfalls to be aware of:
Fake Listings & Scams – Some listings on sites may be misleading or even fraudulent. Some of the properties are sold by the owners. If you decide to buy a property make sure your lawyer always properly checks the status of ownership and if there are any claims on the property (they always do). Scams are mostly quite easy to spot, having no photos and almost no text. Most of the time the property is also listed multiple times.
Hidden Costs – Always check for extra costs such as maintenance fees, renovation expenses, or unpaid utility bills. See also the paragraph about homeowners associations.
Legal Restrictions for Foreigners – Non-EU/EEA citizens are required to obtain a purchase permit to buy residential property in Hungary. This process involves applying to the regional government office and presenting a clean criminal record, among other requirements. The permit ensures the property isn't in a restricted area and that the buyer meets legal criteria. However, non-EU/EEA citizens are generally prohibited from acquiring agricultural land in Hungary.
Property Condition Issues – Some older buildings may have structural problems that are not evident in photos. This is a mistake we have made in the past. We bought an apartment in a monumental building (really beautiful!) but did not realize that the building was in a very bad shape (safety wise). The building will need to be fully renovated in the future, but the other owners don't have the money yet to pay their share, see again the paragraph about the homeowners associations.
Bureaucracy – Hungarian bureaucracy can be slow, and paperwork often takes longer than expected. But at the other hand it always works in the end. Also the governmental employees are often very helpful if you are there personally.
3. Taxes and Other Costs of Buying a House in Hungary
When purchasing property in Hungary, several costs and taxes must be considered:
Property Transfer Tax – Typically 4% of the purchase price, payable to the Hungarian tax authority (NAV). The authority will send the letter about the taxes to your own home address. It is possible that they share the letter with your lawyer. You typically have around 30 days to pay the taxes, but the letter can take between 2 and 6 months to arrive. If you did not receive it within 6 months, it is wise to contact a local NAV office.
Lawyer Fees – Usually between 1%–2% of the purchase price. Notaries are mostly not used in Hungary for Real-Estate transactions. See next paragraph for more info.
Real Estate Agent Fees – If you decide to use a Real Estate agent for purchasing a property they usually charge around 3%–5% of the sale price.
Bank Fees (if applying for a mortgage) – Can vary, usually around 1% of the mortgage amount.
Land Registry Fees – Generally a small administrative fee (~6,600 HUF). The lawyer will take of this part in most cases.
VAT (if buying a new-build property) – 5% or 27%, depending on the type of property.
4. Legal Considerations and Foreign Buyer Restrictions
Foreigners buying property in Hungary have specific legal obligations:
Lawyers Are Mandatory – Every real estate transaction requires a lawyer to draft and oversee the contract.
Permit Requirement for Non-EU Citizens – Non-EU buyers must obtain a permit from the local government (usually granted, but it takes 1–3 months).
Ownership Rights – Once registered, the property is fully owned by the buyer.
Land Registry (Földhivatal) Process – The property must be registered in the official land registry. Your lawyer almost always takes care of thiss.
Limitations on Agricultural Land – Special rules apply for buying farmland, requiring residency or a special permit.
5. Homeowner Associations (HOAs) in Hungary
In Hungary, many apartment buildings and gated communities have Homeowner Associations (Társasház Közgyűlés):
Monthly Common Costs – These fees should cover building maintenance and shared expenses. Most of the time you can charge these extra costs on top of your rent to a rentee.
Decision-Making Power – The association can influence renovation plans, rules on rentals, and common area usage. As an owner you hold voting rights. Most of the time you can make sure that somebody else votes for you, if you can not be there.
Reserve Fund Contributions – Some buildings require owners to contribute to a reserve fund for future renovations. This is what is happening for one of our properties. We did not do enough due diligence, therefore we were a bit surprised about the extra costs. Because most of the Hungarian owners in the building, especially the older generations, will not have a lot of money, the amounts will probably not be very high. Downside is that the reserve will most likely not be enough for the renovations. It in those cases very common that the HOA will take out loans to finance the renovations. In addition to this the local governments provide sometimes subsidies to finance part of the renovations.
Rental Regulations – In some cases, the HOA may set rules limiting short-term rentals like Airbnb. Sometimes the local governments are setting these rules, but in a lot of districts HOA's are banning short-term rentals themselves to keep the building residential.
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6. Rental Limitations in Certain Cities
Certain Hungarian cities and districts have restrictions on short-term rentals:
Budapest District V, VI, and VII – Some areas have caps or special permits required for Airbnb rentals.
Lake Balaton Region – Some municipalities limit short-term leases to protect local housing affordability.
Homeowner Associations – Some buildings have internal rules banning short-term rentals.
Future Legal Changes – The government occasionally updates rental regulations, so checking current rules is crucial.
7. Yearly Property Taxes in Hungary
Owning a home in Hungary comes with annual taxes:
Municipal Property Tax (építményadó) – Varies by city, based on property size and value.
Tourism Tax (if renting out the property) – Required for short-term rentals in many tourist-heavy areas.
Income Tax on Rental Income – In Hungary, rental income is subject to income tax at a rate of 15%. However, it's important to note that there are certain deductions and allowances that can apply, such as the cost of maintenance, depreciation, property management, or interest on a loan used to finance the property. You can also choose to apply a flat rate of 10% on rental income, which covers all expenses, or a detailed accounting approach where you deduct actual expenses.
Common Cost (if part of an HOA) – Monthly maintenance fees set by the building’s HOA.
8. Additional Considerations When Buying Property in Hungary
Mortgage Options – Foreigners can apply for a mortgage, but it’s often easier for EU citizens. Our experience is that this part is very hard to do. Also buying with cash (or personal financing from your own country) is preferred by sellers. If you can pay in cash you can buy a property within 2 a 3 weeks as an EU citizen and it is often preferred by the sellers. Please be aware that Hungary does not have the Euro. There is a FOREX risk and in the last year the Forint has devaluated enormously.
Renovation and Energy Efficiency Grants – Some subsidies exist for energy-efficient upgrades. But they mostly are only applicable for residents (so you will need to live there also)
Resale and Capital Gains Tax – If selling the property within 5 years, capital gains tax applies (15%).
Utilities and Service Providers – Utility costs depend on usage, and setting up services requires proof of ownership. A lot of providers will require monthly registrations. Smart meters are not very common yet in Hungary, although it is possible at a few utility providers. If you have rentees, they will be able to make pictures of the meters for you. Even if the utility provider does not connect to the smart meter, you can decide to install one anyway so get the data via a P1-meter, for example.
Neighborhood Research – Investigating local amenities, transport links, and future developments is essential. Neighborhoods are changing fast now, especially in Budapest. Areas that were rundown 10 years ago are now up and coming neighborhoods. But also the other way around. For example district 7, is a very touristic area at this moment. The locals would not want to rent there any more for longer periods, but it would be great for short-term rentals. These differences should be considered and be aligned with your own goals.
Conclusion
Buying a property in Hungary as a foreigner is entirely possible but requires thorough research, legal support, and awareness of potential pitfalls. By understanding the costs, taxes, and regulations, buyers can navigate the process efficiently and make a sound investment in the Hungarian real estate market.
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