Useful Information About Budapest and Its Property

Where to buy property?

The most recent research has identified Hungary’s property values as undervalued; the city is currently offering a range of opportunities for investment.

The most attractive investment possibilities are currently at the developing Pest side, focusing mainly on the following center districts:

District V, Budapest:

Most of the real estate activities are by renewing old buildings and adding floors. In this district that includes the famous Vaci Street (the “walking street”), and the highest architectural level, the resale properties are interesting opportunities mainly thanks to the beautiful buildings and the high rent fees together with steady value increase.

Properties offered by Coral Holding:

District VI, Budapest:

The old city center, including the Andrassy Road, the Budapest Opera House and more famous sites, includes now its probably last new developments, as there are currently no more free lands for construction; however the resale property might be interesting opportunity in this area, mainly due to the old beautiful style of the resale property and the high rent fees.

Properties offered by Coral Holding:

District VII, Budapest:

A beautiful historical part of the city center, includes the famous Heroes’ Square, museums and many other cultural attractions as well as some of the leading universities. New developments are becoming rare as free land is hard to find, this is continually raising the prices and raising the rent prices. The district provides stable investment with consistently capital appreciation and high rent prices.

Properties offered by Coral Holding:

District VIII, Budapest:

The closest, but yet the most undervalued district at the city center, the district that enjoy beautiful historical parts as the National Museum, has been through a rehabilitation process in the last three years and it is being renewed fast. By demolishing the old buildings and rebuilding the area, the district enjoys a unique prosperity and a sharp increase in the prices and the rent fees. The main square of the district, Blaha Luiza Square, is now under construction in the way to become a new shopping center and office building area. The experts expect this district to become the main city center part of Budapest in the coming years, this is the place for a very high expected capital appreciation and rent fees.

Properties offered by Coral Holding:

District XIII, Budapest

The second largest district of Budapest, includes residential and commercial developments. The increased level of office and retail spaces in the district (Westend City Center, Duna Plaza, Vaci ut office corridor) attract huge population, mainly young professionals to live in the area, with a high demand for purchase and rent of residential properties. The district provides a unique opportunity for a capital gain.

Properties offered by Coral Holding:

How to buy in Hungary?

Due to the last years’ legal reorganization of real-estate regulations, the legal steps of the purchase are very simple.

As of today, due to a simple process of application to the local municipality for a purchase permit, foreign individuals are able to purchase property on their own name. Another possibility based on tax or personal considerations is to hold the property through a special purpose local company, to be open and managed at a simple process. The apartment title is freehold, and the purchaser buys the apartment directly, in cases where the property is part of a larger condominium (flat) the buyer gets part in the building as owner as well.

Depending on the status of the buyer and the asset, the buyer may sign a preliminary contract and a final contract; both ways are binding with regard to the right on the asset purchased. In cases of new developments, as the apartment is handed over registered on the name of the buyer, in resale/ready property the registration is available within 30 days.

The common property sale and purchase contracts outline the obligations of both parties and stipulate payment terms and other conditions of purchase.

It is recommended for a foreign investor to appoint his/her legal representative in Hungary, this is less important for the purchase itself and more for maintaining the asset and the related issues in the future.

Please note that the Hungarian real estate regulation is very strict regarding to the identification of the buyer, and it is better to finalize the process while your stay in Budapest or by appointed party in Hungary (usually the appointed lawyer) that has a power of attorney to act in your name regarding the purchase. The other option is to finalize the process by the Hungarian embassy at your country or by local authorized notary.

However it is usual in Hungary that at the sale and purchase stage, one lawyer represents both parties and Hungarian Law governs all disputes.

Legal fees in Budapest are at a range of 1-1.5% of the purchase price+ VAT

Any taxes charged on my investment?

Taxes payable on real estate investments in Hungary

There are two possibilities for a foreigner to purchase, maintain and sell real estate in Hungary: as a foreign individual or as a Hungarian company.

Hereby we summarize the main tax points to be examined when deciding in which way to invest into Hungarian real estate, with giving an example in a table format in the end.

Contents:

  1. Foreign individuals
  2. Companies
  3. VAT rules
  4. Example

For more information download “Relevant taxes for foreigners” (PDF document)

How to get here?

Under construction.

Where to stay?

Under construction.

Budapest

Budapest is a cosmopolitan city on the bank of the amazing Danube. Formerly the second city of the all-powerful Austro-Hungarian Empire, Budapest was at the turn of the 20th century one of the world's leading cities, evidence of her remains with its layout, grand design and stunning architecture. This sophisticated city is the cultural hub of Central-Europe with a world famous opera house, imposing theatres, elegant boutiques, restaurants and bars. Budapest has an infrastructure that matches any modern major city, with its own underground transport system, tram network and international rail links.

The city is made up of 23 local governments, but geographically it is divided by the Danube into 2 regions, Buda and Pest. Pest is the place for the city's financial, administrative, commercial and retail centers; almost all of which are located in the exclusive 5th and 6th, 7th, 8th and 13th Districts.

Hungary

Hungary is located exactly at the center of Europe- distance for example:

Flying from London 1,452 km 2:30 hours
Flying from Madrid 1,978 km 3:10 hours
Flying from Berlin 690 km 1:25 hours
Flying from Dublin 1,898 km 2:55 hours
Flying from Paris 1,248 km 2:10 hours

Historically, the country was part of Austro-Hungarian Empire, which collapsed during the 1st World War. After World War II it became a part of the Soviet block until 1989.

The country's impressive transition to a Western-style democracy has been fast and effective. Hungary acceded to full membership of the EU on 1 May 2004 and successive governments have focused upon developing internal and external markets, resulting in Hungary attracting more than $20 billion of Foreign Direct Investment, over a third of the total for the whole of the Central and Eastern European region.

Hungary Main Data

Population 10,007,000
Capital City Budapest (population 2,200,000 inc. 7.5% expats)
Currency Hungarian Forint (€1 = 248 HUF) Expecting to join the EURO in 2010-2012
Language Hungarian
GDP ($bn) 150
GDP Growth 3.5% (2004) 4.2% (2005 forecast)
Lending Interest Rate HUF = 9.0% € = circa 5%
Export Growth
(year on year)% 		7.45 (2004)
Import Growth
(year on year)%		 6.38 (2004)
Inflation 3.7%
Unemployment 7.1%
Average monthly salary €630/mth
FDI ($m) 1,400 (2004) 1,600 (2005 forecast)
Main Industrial Production Pharmaceuticals, construction materials, processed foods, and textiles
Export Breakdown Machinery and equipment 59.5%, other manufactures 29.4%, food products 6.9%, raw materials 2.4%, fuels and electricity 1.8%
Main Export Partners Germany 37%, Austria 9%, Italy 6%, Netherlands 5%
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