Budapest Buyers Info

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 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. This page of our website is dedicated to providing important information needed when considering the purchase of Hungarian property. 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 *

Hungarian Population   10.3 Million
Budapest Population   1.9 Million
Language   Hungarian (Although English & German becoming more widely spoken)
Currency   Forint (HUF)
Exchange Rates   249 HUF - €1
366 HUF - £1
Unemployment Rate   Approx 7.4% (Stable)
Inflation (consumer)   Approx 3.7% (Decreasing)
GDP Growth   3.8%

Choosing your Location

River Danube in BudapestThe 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, IX and parts of XIII in Pest. For further market information on individuals areas for real estate investment in Budapest please contact +34 952 836 646 or e-mail info@arenaestates.com.

Deposit

Remember that buying property in Budapest is a sellers market and it is often essential to move quickly to secure the desired property. To purchase a new apartment you will have to pay a reservation deposit to remove a property from the market followed by 30% upon signing the purchase contract. Property prices vary, but a holding deposit of between 3,000€ is usually sufficient to reserve a property and this amount will come directly out of the balance of the 30% deposit. All properties in Budapest are all sold on a freehold basis. When investing in a new development, the registration of the property into your name 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 independent lawyer to ensure your interests are taken care of. Arena can advise you of several reputable English speaking Hungarian lawyers or you can use your own recommendation.

Finance

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

Buying Process

Hungarian FlagThere 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 kft. 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 €3000 per property
  2. Go to a notary public and present your passport to certify the buyer's identity & the copies of your passport can then be used by your lawyer to initiate the permit approval process.
  3. The purchase agreement can be taken care of in your home country if you choose then the agreement is signed by yourself in front of a local notary and then couriered to your local legal representative in Budapest, however a far simpler and cheaper way is to set up a power of attorney whilst in Hungary. This way your legal representative can sign on your behalf with your permission.

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 approx €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, however to open a bank account you do currently need to be in Hungary.

Summary of Costs

The costs associated with the purchase of Hungarian property are between 6-10% of the total purchase price depending on the value of the property & method of purchase.

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

  1. 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
  2. Is the property affected by debts?
  3. In the case of new builds especially, has the building been constructed legally?
  4. What taxes will be due when selling the property in future?

*source Wikipedia updated 30/01/07

Disclaimer: The factual information within the Arena Budapest 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 assumes no legal liability or responsibility for the accuracy, of the information contained therein. Prices and exchange rates are also subject to change.