Hungary Property Buyers Guide

Buying Hungarian property for sale in Budapest should be a straightforward process in many ways no different to that in the UK or other modern European countries. Arena Estates will ensure that great care and attention is afforded and the best advice given throughout the purchase process. As an emerging market with exciting capital growth potential it is important to ensure that the best investment opportunities are provided. By working with a reputable and experienced real estate agent such as Arena Estates, the process can be achieved in the most efficient manner possible.

This page of our website is dedicated to providing important information needed when considering the purchase of Hungarian property for sale in Budapest and its surrounding areas. The information contained below is meant as a guide only and further research on the part of the buyer is advised. Obviously exchange rates and other figures outlined below are subject to change.

Hungary Background Information

Choosing a Location

The city of Budapest is actually made up of two towns Buda and Pest (Pronounced pesht), which sit side by side on the banks of the river Danube. The city is divided into 23 administrative districts identified by Roman numerals. The most dynamic districts for both commercial and residential property in Budapest are Districts VI, VII, VIII and parts of XIII in Pest. In Buda districts I, II, and III are the most exciting core areas. For further market information on individuals areas for real estate investment in Budapest please contact +36 1 266 5968 or e-mail info@arenaestates.com.

Choosing a Real Estate Agent

It is important to choose an experienced and competent real estate agent who will ensure your interests are looked after and who can provide a wide selection of properties that meet your criteria within the budget you have available. Arena Estates has years of experience and a long list of satisfied customers. We have also invested in Hungarian property in Budapest and have broad market knowledge and experience.

Deposit

Remember that buying property in Budapest is a sellers market and it is often essential to move quickly to secure the desired property.

On the purchase of a re-sale apartment you will have to pay a deposit upon signing the purchase contract - usually 10% of the total price, on that occasion your name is registered on the title sheet as a remark of intention to buy. Property prices vary, but a deposit of between 4,000€ to 8,000€ should be sufficient in most cases.

Upon payment of the balance of the purchase price your name will be registered on the title as the exclusive owner of the property. Properties are sold on a freehold basis. When investing in a new development, the registration will take place after the completion of the project.

Appointing a lawyer

In an emerging market such as Hungary it is essential to work with an experienced lawyer to ensure your interests are taken care of. Arena Estates can advise on reputable English speaking Hungarian lawyers.

Finance

Mortgages of between 50% to 70% of the property value are available to foreigner's dependant on circumstance. Arena estates can provide you with up to date advice on the best options available.

Buying process

There are two ways to buy Hungarian property as a foreigner, as a private individual or by setting up a company. In order to buy as an individual the buyer has to file a request for permission to the municipality of Budapest, the request will then be answered within 60 days.

The request will be approved if you wish to buy only one apartment. Should one wish to buy more than one apartment it is possible to either: Register the second apartment under the name of an associate or family member or establish a Hungarian BT company that can buy and sell properties with no restrictions.

To buy as a private individual you will need to:

1. Appoint a Hungarian legal representative and pay the initial deposit of Euro 1000 to 2000 per property

2. Go to a notary public and certify 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 - see below

3. The issue with the public notary can be done at any Hungarian embassy or consulate but opening hours vary the price abroad for this service is much higher then doing it locally. The costs associated with the procedure are approximately € 250.

4. The buy-sell agreement can be taken care of in your home country if time is an issue whereby the agreement is signed by yourself and then mailed / DHL'd to your local legal representative

Setting up a company

Establishing a company in Hungary is a routine procedure, which can be completed within a day. The basic procedure is as follows:

1. The company's Articles of Association needs to be signed in front of a lawyer

2. The lawyer will also need the name of the new company, its seat, and the personal data of the owner(s). 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.

3. 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.

4. 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.

Note: It is not required to be in Hungary in order to sign the Articles of Association; the procedure can be done at any Hungarian Embassy.

Summary of Costs

The costs associated with the purchase of Hungarian property are approximately 8% - 9% of the total purchase price.

Making an Offer

When the price and conditions of sale are agreed upon verbally, the next step is to have a Hungarian registered lawyer draft the sales - purchase agreement. In order to do this and ensure that the property is taken "off the market" the buyer should leave a booking deposit with the agent.

Important points to consider

• Does the property have a good title? During 50 years of communism, title registration was often neglected and as a result is often out of date.

• Is the property affected by debts?

• In the case of new builds especially, has the building been constructed legally?

• What taxes will be due when selling the property in future?

Disclaimer: The factual information within the Arena Estates website has been created using numerous sources. While every effort has been made to ensure the veracity of the facts contained within this website, Arena Estates assumes no legal liability or responsibility for the accuracy, of the information contained therein. Prices and exchange rates are also subject to change.