1. How can a foreigner buy in Budapest?
2. What is the difference between buying as a private and a company?
3. How do I set up a company?
4. What are the costs involved?
5. Is the property free hold or lease?
6. Do I have to come to Budapest in order to buy?
7. How much tax do I have to pay?
8. How do I get possession of the property?
9. Can I get finance from a Hungarian bank?
10. What is the best way to rent out my apartment?
11. How to furnish and renovate?
12. How do I secure my money when buying a property in Budapest?

A. Every foreign investor can buy properties in Budapest either as a Hungarian company or as a private individual.
In order to buy as an individual the buyer has to file a request for permission to the municipality of Budapest, the request will be answered within 60 days. The request will be approved if you buy only one apartment.
In the event that you wish to buy more then one apartment you can either:
- register the second apartment under the name of a family member
- establish a Hungarian BT company that can buy and sale with no restrictions

• Setting up costs
  Company: Approx. 800 Euro including lawyer fees, notary, stamp duty and bank charges
  Private: Approx. 350-400 EUR lawyer fees for the process of getting the permission
• Purchase tax / stamp duty
  Company: 2% if sold within 2 years
  Private: 6% if held for longer than 2 years 6%
• Permission
  Company: No permission required
  Private: The approval of the Administrative Office of Budapest is required. The obtaining of this approval can take up to 3 months. The sellers usually don’t want to wait 3 months, and require the full purchase price to be paid before the whole procedure is over.
• Restriction on number of properties one can purchase
  Company: None
  Private: Permission will not be granted for more then one apartment per individual.
• Duration of the process
  Company: Immediately (1-2 days)
  Private: Minimum of 3 months.
• On-going costs
  Company: 350 EUR - 400 EUR / year accounting
  Private: None
• Tax
  Company: 16% corporate tax on profits. No dividend tax
  The company can reclaim back all expenses related to the apartment including trips to hungary of the company owners and interest for owners loan. Those expenses will be deuced from the company profits.
  The company can also be sold, then there is no capital gains tax for the seller, and there is no stamp duty for the purchaser either.
  Private: 20% capital gains tax on profits, there is no possibility to deduce expenses.
  There is a double taxation agreement between hungary and EU countries.

A. Some of the buyers choose to establish a deposit company (B.T.) in order to purchase the property.
The steps of opening the company:

• choose a partner – the company should have a general partner and a limited partner
• get passport copies, mother name of both partners
• the lawyer will prepare the article of association for the company which you will sign
• the lawyer will get the company registration number from the court of registration
• you will go to the bank to open a bank account, deposit 30,000 HUF (120 €) as capital for the Company
• the company will be fully registered within 4-6 weeks; you may buy and sell properties during this period

Keep in mind that Court of Registry is open daily 08:30 – 13:00 and is not open on Friday - Sunday.
The whole process of registering the company should take no more then a day, taking in consideration that all documents and information will be ready. Our sales personnel will assist you during the process.

A. lawyer fees: 1% of the property cost
agency fees: 3% of the property cost
stamp duty
When buying a resale apartment 6% of the property cost
When buying in a new development apartment with price of up to 30,000,000 HUF (120,000 €) there is no stamp duty, if the apartment cost more then 30,000,000 HUF you will pay 6% stamp duty.
A company that intends to sell the property within two years time can pay only 2% stamp duty.
Establishing a company – approx 800 €, including – lawyer fees, notary and stamp duty for the company
applying for a permit as a private individual – 50,000 HUF

A. All the properties in Budapest are free hold; the owners of the property are registered on the title.

A. When buying as a private you don’t need to come to Budapest, one may sign a power of attorney in the Hungarian embassy and send it to Budapest; your sales agent can sign the contract on your behalf.
When registering a company the general partner has to come to Budapest in order to sign in the bank, once the company is registered the contract can be signed with a power of attorney.

A. Private person will pay capital gain tax of 20% of the profit from the rent and the sale, this tax can be deduced from your tax liability according to the double taxation agreement between Hungary and other EU countries.

A. When buying a re sale apartment you will have to pay a certain deposit upon signing the purchase contract – usually 10% of the total price, on that occasion your name is registered on the title sheet as a remark of intention to buy.
Once paying the full amount of the purchase price your name will be registered on the title as the exclusive owner of the property.
When buying in a new development the registration will take place after the completion of the project.

A. Today you have the possibility to obtain mortgage from a Hungarian bank under the following conditions:

• the amount of the loan is up to 70% of the price of the property
• the loan will be granted for a period of 1-20 years
• interest rate eurolibor + 2.5% per annum
• monthly payments will include capital and interest
• the buyer must be a private individual and get permission for buying in Budapest
• for more details please contact your sales agent in Casaro

A. Casaro property management department will be responsible to rent out your apartment.
In order to get the maximal rental income the property must be renovated and fully furnished and equipped.
Log into our partners rental web site for more details www.budapestrent.com

A. When buying an old apartment:

• first payment is usually 10% of the cost of the apartment;
• the payment is given to the lawyer which after transferring it to the seller will register a remark in the land registry office in your favor
• the last payment should be transferred to the lawyer escrow account, the lawyer will pay the money to the seller upon fulfillment of the following conditions:
  • the seller will prove that all the debt on the apartment were paid, and will bring a “0” statement from all the utility companies
  • the seller will sign a declaration approving that he have received the full amount of the money and that he have no objection to the registration of the property in the land registry office on the name of the buyer
    the lawyer will then register your name as the new owner of the property.

When buying a new apartment:

When buying a new apartment the following is recommended:

• to buy only from a developer that is using bank finance for the construction
• to pay staged payment according to the progress of the construction work
• when the developer is using bank finance the payments of the buyer are deposited to a closed bank account to which the developer have no access, he can only withdraw money from the account upon completion of the building and handing over possession on the apartments to the buyers.

Take into consideration that in Hungary the developer is not obliged to issue bank guarantee in favor of the buyers.

A. When buying an old apartment:

• first payment is usually 10% of the cost of the apartment;
• the payment is given to the lawyer which after transferring it to the seller will register a remark in the land registry office in your favor
• the last payment should be transferred to the lawyer escrow account, the lawyer will pay the money to the seller upon fulfillment of the following conditions:
  • the seller will prove that all the debt on the apartment were paid, and will bring a “0” statement from all the utility companies
  • the seller will sign a declaration approving that he have received the full amount of the money and that he have no objection to the registration of the property in the land registry office on the name of the buyer
    the lawyer will then register your name as the new owner of the property.

When buying a new apartment:

When buying a new apartment the following is recommended:

• to buy only from a developer that is using bank finance for the construction
• to pay staged payment according to the progress of the construction work
• when the developer is using bank finance the payments of the buyer are deposited to a closed bank account to which the developer have no access, he can only withdraw money from the account upon completion of the building and handing over possession on the apartments to the buyers.

Take into consideration that in Hungary the developer is not obliged to issue bank guarantee in favor of the buyers.