Foreign citizens may buy real estate properties in Hungary quite easy if the necessary permits are obtained with the local municipality. Foreign companies will encounter no difficulties either when buying real estate property in Hungary. According to the Hungarian Civil Code a private contract or purchase agreement must be signed between parties when real estate purchases occur. The law also states a Hungarian lawyer must countersign the agreement. Foreign citizens must also know that it may take between two and three months to obtain the permit with the local administrative office.
Foreign entities will usually be advised to register a company in Hungary in order to not apply for any permits when buying a property and thus reducing the purchase period from months to days.
The first step when purchasing real estate in Hungary will be to choose the property and perform due diligence in order to make sure no encumbrances are registered. Once an agreement has been reached the Hungarian law firm will start the procedures for obtaining all necessary permits with the local authorities and then the property valuation begins. Once these steps have been completed the lawyer will draft the real estate purchase contract and the buyer must deposit at least 10% of the property sale price. Within 30 days the purchase agreement must be submitted with the Hungarian Land Register and after obtaining the necessary permits from the administrative office the purchase process is completed. The most important phase when closing the agreement is to draft a declaration the whole purchase amount of money has been paid and the possession of property has been transferred.
The buyer must pay a 4% tax of the total purchase price of the property within two to six months after the Hungarian property has been registered. Foreign citizens outside the European Union will also be required to pay for the purchase permit and the fee for this permit is about 170 euros. Owners of Hungarian real estate property must also know that yearly maintenance costs are necessary. These costs will usually include a council tax, a water supply tax and a village tax.
For complete information about real estate purchases you can contact our law firm in Hungary.
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