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Fees of Buying and Selling a Property in Budapest – A Guide
We have created a comprehensive guide outlining the costs and taxes of buying and selling a property in Budapest. Foreign buyers are eligible to purchase property in Hungary and can expect a relatively straightforward process with a clear set of taxes and fees.
Buying a Property
Purchasing a property in Budapest involves general purchase fees and land registration costs. Non-EU citizens should expect marginally higher fees when purchasing a property.
These include legal fees for lawyer services and stamp duties otherwise known as a transfer tax. The undermentioned fees make up the following percentages of the total purchase price of the property:
- Legal fees: 1%-3% + VAT of the purchase price
- Stamp duty (Transfer Tax): 4% of the purchase price
In most cases, the buyer is not required to pay the real estate agent’s fee (3%-5% + 27% VAT) as it is covered by the seller.
Once the sale is approved by the local authorities, a fee of €19.30 will be charged for a new ownership title.
Additional Fees for Non-EU Citizens
In addition to the fees outlined above, non-EU citizens are required to pay a €200 purchase permission fee to the National Tax and Customs Administration of Hungary and a notary fee of approximately €6 to provide a notarized copy of their passport as proof of identity.
Please see the example below of a property purchased for € 150,000:
|Purchase Price||€ 150,000|
|Legal Fees (1%)||€ 1500|
|VAT of legal fee (27%)||€ 405|
|Stamp Duty (4%)||€ 6000|
|Land Registration||€ 19.30|
|Purchase Permission (For Non-EU Citizens)||€ 200|
|Notary fee (For Non-EU Citizens)||€ 6|
|Total Cost EU Citizens||€ 157,924.30|
|Total Cost Non-EU Citizens||€ 158,130.30|
Selling a Property
Selling a property in Budapest is a less costly process that involves real estate agency fees and a capital gains tax.
As mentioned previously, the seller is responsible for covering the real estate agency fee which is typically 3%-5% + VAT of the property sales price. (In turn, the seller is usually exempt from paying for legal fees as this is covered by the buyer.)
Capital Gains Tax
The capital gains tax is a fee on the profit made from selling a property and is calculated as the total sales price – the original cost of the property. The capital gains tax is 100%, 90%, 60%, and 30% for the first second, third, and fourth year respectively (from the purchase date). There is no capital gains tax if the property is sold after the 5th year of ownership.
Please see the example below of the same property (initially bought for € 150,000) sold after the 5th year of ownership for € 210,000:
|Purchase Price||€ 210,000|
|Agency fees (4%)||€ 8400|
|VAT on agency fee (27%)||€ 2268|
|Gross Profit||€ 60,000|
|Total Net Profit (with agency fees)||€ 49,332|
A buyer should also consider whether it is financially viable to set a company when purchasing real estate. For more information on the benefits of setting up a company refer to our article here.