what permission should a european citizen obtain in order to buy a house in Budapest, Hungary?

Question

I am Italian and I want to buy an apartment in Budapest. What permissions should I get in order to be able to buy it?

Answer 1

For a foreign investor who wants to purchase real estate in Budapest there are two ways to proceed:

The buyer can apply for a permit as a private person, which means submitting an application to the local authorities to acquire the properties(s). The costs associated with the procedure is approximately € 250
Foreign buyers can establish a local Hungarian company, usually a limited liability company. This is preferable if the purchaser wishes to acquire multiple properties.
Acquisition of Real Estate by a Business Venture

The advantage of buying property through a company is that all expenses relating to the apartment can be written off (e.g.) travel, accommodation, legal & agency fees, purchase (stamp) duty, renovation costs, furniture, utilities, and all associated services, including the interest on loans. Under this approach, the company can be sold along with the property, which makes it attractive for future buyers, as no purchase stamp duty needs to be paid. The only disadvantage is that the company shall require an accountant and need to submit annual reports. Establishing a company in Hungary is a routine procedure, which can be arranged within a day. The basic procedure is as follows:

The company's Articles of Association needs to be signed in front of a lawyer*.
The lawyer will also need the name of the new company, its seat, the personal data of the owner(s) and designation of a delivery agent for official documents. The founding capital of a limited liability Company is HUF 3m. or Euro 12, 000 - this amount can be applied to the purchase of the property.
After the Articles of Association are prepared, specimens of signature need to be signed in front of a public notary, then a bank account must be opened.
Then all the documents, forms, authorizations and invoices must go to an accountant who will take care of all the administration and prepare the required reports.
Acquisition of Real Estate by Private Individuals

To buy a property in Hungary is straightforward and will require the following:

Appointing a Hungarian legal representative and paying in the initial deposit of Euro 1000 to 2000/property
Going to a notary public and certifying the buyer's identity to initiate the permit approval process. If the permit is refused (which is a remote possibility) establishing a company is the next suggested option. The issue with the public notary can be done at any Hungarian embassy or consulate but opening hours vary and the price abroad for this service is much higher than doing it locally. The cost associated with the procedure is approximately € 250.
Signing the purchase-sale agreement can be taken care of in your home country if time is an issue whereby the agreement is signed by yourself, notarised at the Embassy and then mailed / DHL'd to your local legal representative.
You can also have your purchase sale agreement signed in Hungary or you can appoint a proxy. In this case you either sign the Power of Attorney in front of your legal representative while you are in Hungary, or in your home country in a Hungarian consulate.

From January 2006 the Municipal Authority would accept the passport legalization only by a notary public or the Hungarian consulates (like earlier), so the legalization by law firms would not be sufficient. Clients who are coming to Hungary shall visit a notary public / clients who are not coming to Hungary shall also legalize the copy of their passport at the consulate.

It is also important to mention that according to Hungarian legislation the developer of a new property has a warranty obligation for 3 years.

The table below highlights the key differences between buying as a private individual and buying as a company.



Private Person Company
Permission Permit granted by the local director of the regional public administration office No permission needed
Restriction on the number of properties that can be purchased No restrictions but in practice permit is given for up to 2 properties No restrictions
Purchase related costs Approx EUR 350 Approx EUR 800
On going legal and administrative costs None Accounting approx EUR350/year
Tax 25% capital gains tax 16% corporate tax on profits
Re-selling None When selling the company owning the property, no stamp duty needs to be paid which makes it attractive for future buyers


I hope this helps you

Answer 2

Budapest (pronounced /ˈbuːdəpɛst/, also /ˈbʊdəpɛst/ or /ˈbjuːdəpɛst/; Hungarian pronunciation: [ˈbudɒpɛʃt]; names in other languages) is the capital of Hungary.[1] As the largest city of Hungary, it serves as the country's principal political, cultural, commercial, industrial, and transportation center[2] and is considered an important hub in Central Europe.[3] In 2008, Budapest had 1,702,297 inhabitants,[4] down from a mid-1980s peak of 2.1 million. The Budapest Commuter Area (or Greater Budapest) is home to 3,271,110 people.[5][6] The city covers an area of 525 square kilometres (202.7 sq mi)[7] within the city limits. Budapest became a single city occupying both banks of the river Danube with a unification on 17 November 1873 of right-bank Buda and Óbuda with left-bank Pest.[7][8] Aquincum, originally a Celtic settlement,[9] was the direct ancestor of Budapest,[10] becoming the Roman capital of Lower Pannonia.[9] Magyars arrived in the territory[11] in the 9th century. Their first settlement was pillaged by the Mongols in 1241-42.[12] The re-established town became one of the centers of Renaissance humanist culture[13] in the 15th century.[14] Following the Battle of Mohács and nearly 150 years of Ottoman rule,[15] development of the region entered a new age of prosperity in the 18th and 19th centuries, and Budapest became an alpha world city after the 1873 unification.[16] It also became the second capital of Austria-Hungary, a great power that dissolved in 1918. Budapest was the focal point of the Hungarian Revolution of 1848, the Hungarian Soviet Republic of 1919, Operation Panzerfaust in 1944, the Battle of Budapest of 1945, and the Revolution of 1956. Widely regarded as one of the most beautiful cities in Europe,[1][11][17][18] its extensive World Heritage Site includes the banks of the Danube, the Buda Castle Quarter, Andrássy Avenue, Heroes' Square and the Millennium Underground Railway, the second oldest in Europe.[17][19] Other highlights include a total of 80 geothermal springs,[20] the world's largest thermal water cave system,[21] second largest synagogue, and third largest Parliament building. The collections of the Natural History Museum and the Museum of Fine Arts are also significant. The city ranked 3rd (out of 65 cities) on Mastercard's Emerging Markets Index (2008),[22] and ranked as the most livable Central/Eastern European city on EIU's quality of life index (2009).[23] It attracts over 20 million visitors a year.[24] The headquarters of the European Institute of Innovation and Technology (EIT)[25] and the first foreign office of the CIPA will be in Budapest.[26]

Answer 3

I would speak to your local lawyer / solicitor. as I am assuming there is likely to be a lot of paperwork and red tape to get through.

Answer 4

I would get a good solitor.Good Luck