Purchase of real estate in Hungary
It can be very advantageous to invest in Hungary as the country offers plenty of business opportunities for foreign investors and the fact that the country is a member of the European Union makes it absolutely advantageous for European companies and investors who are willing to open branches or subsidiaries. In addition, the country’s central location and friendly investment policy also offer good opportunities for foreign investors.
Hungary is in the heart of Europe, and this central location makes it ideal for foreign investors looking to expand their business in Europe. Hungary’s geographical location is suitable for transport and logistics activities and for import and export businesses. Most European countries are easily accessible from Hungary, and the country provides access to a valuable single market.
In addition, human resources are one of the country’s most important assets, and investors can thus gain access to a well-educated workforce. History shows that Hungarians have achieved good results in e.g. technical and medical science and IT. As a foreign investor, you can also benefit from competitive average wages compared to other European countries.
Among the country’s many business opportunities, the automotive industry, the electronics industry, the service sector, including tourism, hotels and catering, as well as the food and agricultural industries must be highlighted.
In addition, Hungary has favorable taxes for both companies and individuals. Corporate tax is just around 9%, which is significantly lower than in other European countries such as France or Great Britain (UK). There is no state tax on real estate, only municipalities collect an annual local real estate tax, a very low percentage compared to other European countries. When buying real estate, you only have to pay 4% of the purchase price up to 1 billion euros in property transfer tax.
There are many investment options: you can choose to buy a holiday home by Lake Balaton, or you can invest in a hotel either by buying an already existing hotel, or a castle or a disused factory, which can then be restored and turned into a hotel or congress center.
It is also possible to buy wind turbines or agricultural land and establish yourself as a farmer. The land is extremely cheap, easy to cultivate and the labor is not only cheap but also efficient.
You are welcome to contact us if either you have already found the right property and want our help with the purchase, or you are looking for the right investment. We can find the property you are looking for by providing the right contacts.
How does the trade take place?
As a buyer, you must submit an offer. If the seller accepts, the buyer and seller enter into a private purchase agreement containing information about the parties, the property, the price and the other conditions for the purchase.
In Hungary, the transfer of real estate (or rights over real estate) requires the assistance of a notary.
Buyer and seller meet in person in front of a Hungarian notary and sign the deed.
The buyer then pays the purchase price to the seller, and the seller hands over the keys to the buyer.
The meeting takes place in Hungarian, and the deed is also written in Hungarian.
If you do not speak Hungarian, there are the following options:
Either an interpreter is present during the meeting and translates simultaneously, or the deed is translated into English or Danish, and the buyer can thus follow along while the notary reads the deed.
The best solution, however, is to give power of attorney to a lawyer or an employee of the notary who signs on your behalf. The power of attorney can be signed in Denmark, thereby saving the journey to Hungary.
In Hungary, the property is traded as occupied. Condition report does not exist. We therefore recommend that the buyer, prior to signing the purchase agreement, investigates the following matters:
It is recommended that an architect inspect the property for defects.
The court record
Who owns the property? Is the seller registered as the owner of the property?
If not, it may often be because the property belonged to a deceased relative (eg the seller’s father or mother) and probate has not taken place. This typically happens in the countryside, but rarely in large cities.
Is the property correctly registered? If you buy a house, the property must be registered as suitable for habitation and e.g. not like a stable or a warehouse.
Have any illegal additions or conversions been carried out?
Are there registered encumbrances (mortgage deeds or easements) on the property? Are there lawsuits on the property?
Is issued by the municipality and certifies that the property is suitable for habitation.
Notary fee: Depending on the purchase price.
Property transfer tax corresponding to 4% of the purchase price of up to 1 billion euros.
There is before state tax on real estate. Municipalities require a small amount each year for renovation etc. The amount of the tax depends on the municipality where you buy real estate.