We can distinguish 3 main construction periods in Budapest:

1. 1873-1920 - the classical old turn-of-the-century so-called tenement apartments, typical Austro-Hungarian monarchy style
2. 1920-1948 - typical 3-storey long houses
3. 1948-1989 - the blocks of pre-fab flats of the Communist era

Private ownership of residential properties in Hungary has historically been high. Even during the communist era it was around 65%. The remaining 35% belonged to the state and was rented with a lifetime lease (which could be passed on to relatives at the death of the leaseholder) at a price, which did not cover the cost of the needed maintenance. Due to the low rental fee and state ownership, maintenance was neglected and most of these homes are in very bad condition. Still, by the end of the privatization in this sector, the share of privately owned residential properties has reached 90-92%. This ratio is the highest in Europe and perhaps the world.

At the beginning of this decade, the government withdrew from home construction and the number of governmental newly built homes dropped from an annual peak in the 1970-80's of 100,000 to 23,000-26,000 per year in the nineties. Today, there is a larger demand for maintenance and new home construction than there is available plot for construction. Therefore, most new home construction is outside the city old center.

The most fundamental rules defining and regulating the property ownership are stipulated in the Constitution and Civil Code. The Constitution defines public and private property as well as their protection. The Civil Code, the Law of Land (Act I of 1987 on Land, Act XLI of 1990 on Amending Act I of 1987 on Land) and the Law of Arable Land (Law LV of 1994 on Arable Land) regulate the transfer of property rights. Other important laws related to the property ownership are:

• Law of Duties (Law XCIII of 1990 on Duties and Law LXXXV of 1996 on amending it)
• Law of Property Registration (Law CXLI of 1997)
• Law of Mortgage (Law XXVI of 1996)
• Law of Mortgage Note and Mortgage Bank (Law XXX of 1997)
• Law of Investment by Foreigners (Law XXIV of 1998 and its amendments and government decree)
• Law of Foreign Exchange regulating the real estate acquisition on abroad by Hungarian citizens (Law XCV of 1995 and its amendments)
• Law of Personal Income Tax (Law CXVII of 1995 and its amendments)
• Law of Company Tax (Law LXXXI of 1996 and its amendments)
• Law of VAT (Law XXIV of 1992 and its amendments)
• Law of Rent and Acquisition of State or Local Government Owned Flats and Premises (Law LXXVIII of 1993)
• Law of Real Estate of Co-Ownership (Law CLVII of 1997)

Government Decrees and Local Government Ordinances define in detail the execution of the above-mentioned laws. Some of the most important decrees are:

• Government Decree on the Acquisition of Real Estate by Foreigners (Government Decree No.7/1996 (I.18.) Korm.)
• Government Decree on the Execution of the Law XCV of 1995 on Foreign Exchange (Government Decree No.242/1997 (XII.20.) Korm. Regulating the Acquisition of Foreign Real Estate by Hungarians)
• Minister of Finance's Decree on the Guidance to Determine the Value of Mortgage-backed Real Estate (Finance Minister Decree No25/1997 (VIII.1.) PM)
• Minister of Agriculture's Decree on the Guidance to Determine the Value of Mortgage-backed Arable Land (Agriculture Minister Decree No.54/1997 (VIII.1.) FM)
  

There are four types of property rights that can be vested in real state:

• Ownership rights
• User rights
• Rental rights
• Handling rights (transitional legal institution)

These rights can be possessed and granted by:

• An individual as a "natural person"
• Organizations having or not having legal personality

Subjects of the public property are:

• The state/government
• Local government

The Hungarian land registration system dates back hundreds of years and still is working reliably today. It is, however, currently being computerized countrywide. It is based on the Austrian "Grund Buch" system, which consists of a cadastre, combined with a land registry. The legal description of land is recorded by a cadastral map, which is drawn in scale. Parcels reflected on the cadastral map are cross-referenced to a land registry, which consists of a three-page record:

• Page 1 of the land registry describes the parcel itself, its size, location and permitted use
• Page 2 sets forth ownership information, including the ownership history
• Page 3 provides information with respect to liens, easements and other similar claims or restrictions regarding the property

The information set forth in the land registry is guaranteed by the state. To the extent that unrecorded claims may exist, Hungarian law provides that a bona fide purchaser who acquires property without knowledge of such claims nevertheless acquires clear title. The transfer of property right must be put down in a written, authentic form (contract), which has to be countersigned by a lawyer, or bearing a notary certified signature of the seller and buyer. The contract has to be deposited at the Land Registration Office within 30 days after the date of its signing.

Registers of property rights are accessible to everybody and anyone can obtain a copy of them from the Land Registration Office.

The Government Decree 7/1996 (I.18.) regulates in detail the acquisition of real estate by foreigners. Foreigners in possession of a permit can acquire the right to purchase real estate properties, with the exception of arable lands or land in protected areas. Foreigners may acquire the ownership right to real estate not considered arable land without permission by right of inheritance.

Procedure of applying for permit

The application for the authorization shall be submitted to the head of the competent metropolitan or county administration office at the location of the real estate.

The following shall be attached to the application:

• A document verifying the foreigner's citizenship
• A copy of the contract on the acquisition of the real estate
• A duplicate copy of the ownership sheet from the real estate registry, not older than 3 months
• A tax certificate and a value certificate not older than 3 months
• In the case of an onerous acquisition or exchange of real estates, the original certificate made out in respect of the conversion of a convertible legal tender at an authorized Hungarian financial institution or exchange office, or in respect of the forints cover deposited on a convertible forints account verifying the purchase price or any possible difference in value
• The mayor's declaration issued whether the acquisition of the real estate interferes with any municipal interest
• If the real property is donated as a gift, the proof of the degree of relationship by affinity between the contracting parties