AS A DESTINATION
Hungary is a landlocked country in the middle of Europe. It is bordered by Slovakia to the north, Ukraine to the northeast, Romania to the east and southeast, Serbia to the south, Croatia and Slovenia to the southwest and Austria to the west.
Hungary has a population of nearly 10 million, mostly ethnic Hungarians and a significant Romani minority. Hungarian, the official language, is the world’s most widely spoken Uralic language and among the few non-Indo-European languages widely spoken in Europe. Budapest is the country’s capital and largest city; other major urban areas include Debrecen, Szeged, Miskolc, Pécs and Győr.
Hungary is a member of the European Union since 2004 and part of the Schengen area since 2007. It is a middle power in international affairs, owing mostly to its cultural and economic influence. It is considered as a developed country, with high-income economy. 40th in the world’s Human Development Index with universal health care and free secondary education. The 13th most popular tourist destination in Europe, drawing 16 million international tourist a year (2017). Hungary is a member of United Nations, NATO, WTO, World Bank, IIB, AIIB, Council of Europe and the Visegrad Group. It has 5 international airports, Budapest Ferihegy, Debrecen, Heviz-Balaton, Gyor-Per, Pecs-Pogany. The total length of 1,314km motorways, centralised in the capital Budapest. Christian majority. Main spoken language is Hungarian, younger generations and people in larger cities or tourist destinations generally speak English and/or German as a second language.
PRICES
Western-European countries are featuring much higher prices than Easter-Europe. Hungary with average €780 used and €1,657 new property m² prices are one of the cheapest in Europe.
The most expensive countries of Europe are Norway and France, where used properties are 5 times more expensive than Hungary. UK, Austria and Germany are not far either, properties are 4 times more expensive than Hungary. These in comparison with only Budapest, shows a slightly different picture. Budapest prices alone are above the Eastern-European region (average country number), but still behind the Western-European prices, just between Denmark and Belgium.
Based on this comparison Hungary, but even in its most sought-after capital Budapest are way behind the Western-European prices.
TRANSACTION COSTS
When a property transaction is made, there are different additional costs involved at both the seller and buyer side. The combined costs are called ‘round-trip’ costs in the international property market language. To formulate an objective view, when comparing Hungary with other countries, we need not only look at property prices, potential investment yields, but all these costs involved. The major costs are: Registration costs, Legal fees, Agent/commission fees, Sales and transfer taxes.
Hungarian residential property transactions are involving 10.58% of the property value as round-trip costs. This is putting Hungary around the middle of the list of countries.
We can also read from the chart, that the largest cost involved is tax, which in ratio is not largely different from other countries. It also suggests, that other costs, like legal fees and agency commissions are not as relevant as in other countries.
BUYING PROCESS
EU member country citizens:
To simply put, there are no restrictions and no permit needed to buy residential property in Hungary. Additionally to the EU, the countries of European Economic Area are also falling into this ruling. On top of these countries, Switzerland is included too.
Non-EU member country citizens:
They are required to hand in an applications to buy residential property in Hungary. This formal procedure is a fairly straight-forward application for specific permit.
- 1. Application for residential property purchase – this is the official document to fill, and if the purchase is in Budapest, hand in to the Administration Office, if it is outside of Budapest, then hand it to the local municipality.
- 2. Official certificate of good conduct – this document is required by the Administration Office or local municipality, as a proof of the individual, that has not had any criminal convictions in the past. The procedure to receive the permit does take 60-90 days
- 3. Living in Hungary – non-EU individuals have to prove their living in Hungary. Once the individuals are not living in Hungary, they are required to sell the property within 1 year from the date of the official registration of their move.
The procedure can be shortened and bypassed legally if the buyer establishes a company in Hungary. After that, a Hungarian EU company is the buyer, therefore it is exempt of any permit procedure.
