Hungary has become one of Central Europe’s most attractive real estate markets thanks to low acquisition costs, favorable capital gains rules, and investor-friendly rental taxation. However, true profitability depends on understanding the full tax and fee structure behind buying, selling, and renting property. This guide explains Hungarian real estate taxation in a clear, practical, and investor-oriented way.
Buying Property in Hungary – Taxes and Fees
Property Transfer Tax (Vagyonszerzési Illeték)
The buyer must pay a property acquisition tax:
- 4% of the purchase price up to HUF 1 billion
- 2% on the portion above HUF 1 billion
This tax is payable after registration and represents the main government acquisition cost.
VAT on New Builds – Already Included in the Price
For newly built properties sold by developers, the listing price is typically a gross price that already includes VAT. Buyers do not pay VAT as a separate extra item.
Resale (used) properties are VAT-free.
Legal and Administrative Costs
Typical costs:
- Lawyer fee: ~1% (buyer pays fully)
- Land registry & filing: small fixed fees
- Mortgage notary: if applicable
- Energy certificate: minor fixed cost
The lawyer manages contract drafting, escrow handling, and land registry submission.
Real Estate Agent Fee
- 4–5% of sale price
- Paid by the seller
This is standard Hungarian market practice.
Selling Property in Hungary – Capital Gains Tax
Capital Gains Tax Rate
Private individuals pay:
- 15% personal income tax on capital gains.
Taxable Base Formula
The taxable gain is calculated as:
Selling price – Purchase price – Verified renovation costs – Selling costs
Capital Gains Tax Reduction by Holding Period
Hungary offers one of Europe’s most favorable capital gains systems.
| Holding Period | Taxable Portion |
|---|---|
| 0–1 years | 100% |
| 2 years | 90% |
| 3 years | 60% |
| 4 years | 30% |
| 5+ years | 0% (tax-free) |
After 5 years, no capital gains tax is payable.
Seller’s Typical Costs
- Agent fee: 4–5%
- Capital gains tax: 0–15%
- Certificates, preparation: minor
Long-Term Rentals in Hungary (90+ days)
Income Tax
Rental income earned by private individuals is taxed at:
- 15% personal income tax
Expense Options
Landlords may choose:
- 10% lump-sum expense deduction, or
- Itemized expense deduction, including maintenance, depreciation, furniture, utilities (if landlord pays), and management fees.
Hungarian law allows flexible family income planning: spouses, parents, and children may legally rent out properties in their own name.
Short-Term Rentals (Airbnb-Type)
Short-term rentals are usually operated as private accommodation activity.
Flat-Rate Income Tax
Eligible private hosts may pay:
- HUF 150,000 per room per year
This is a fixed annual tax regardless of actual income.
Local Tourist Tax (IFA)
- Usually 4% of the accommodation price
- Paid by the guest
- Collected and transferred by the host to the district municipality
Tourism Development Contribution
The host must also pay:
- 4% tourism contribution to the Hungarian tourism authority
This is a host-side tax obligation.
Local Property Tax – Építményadó
Hungary applies a local annual building tax called építményadó.
How It Is Calculated
- Fixed HUF per m² per year or value-based
- Rate depends on district and neighborhood
- Common practical range: 3,000–6,000 HUF/m²/year
When It Must Be Paid
It usually applies when the property is:
- Rented
- Vacant
- Used for business or short-term rental
Many districts grant exemption if the owner lives in the apartment as a primary residence.
Ongoing Ownership Costs
Typical annual or monthly costs:
- Common costs: HUF 10,000–40,000/month
- Insurance: HUF 5,000–15,000/month
- Maintenance: variable
- Property management: 10–20% of rental income
- Építményadó: location-dependent
Corporate vs Private Ownership
Some investors buy through Hungarian companies for VAT planning and portfolio structuring.
Key taxes:
- Corporate income tax: 9%
- Dividend tax: 15%
Corporate ownership offers planning advantages but requires professional accounting.
Total Transaction Cost Overview
Buyer
- Transfer tax: 4%
- Lawyer: ~1%
- Admin fees: ~0.1%
- Total: approximately 5–5.5%
Seller
- Agent fee: 4–5%
- Capital gains tax: 0–15%
- Total: approximately 4–20% depending on holding period
Why Hungary Remains a Top Real Estate Investment Market
Hungary offers:
- Low acquisition taxes
- Long-term capital gains tax exemption
- Simple rental taxation
- Favorable short-term rental flat taxes
- Flexible family income planning
- Competitive corporate tax environment
With proper planning, Hungary remains one of the most tax-efficient real estate markets in the European Union.
Join The Discussion