Buying a Home in Hungary: A Comprehensive Guide

Hungary is one of the most attractive countries in Central Europe, known for its rich cultural and historical heritage, natural beauty, and strategic location. With its well-developed infrastructure and quality of life, many people are considering buying property in Hungary. This guide will provide a thorough overview of everything you need to know about purchasing real estate in Hungary, covering all the details and procedures involved.

The Real Estate Market in Hungary and General Information

Hungary, despite being a member of the European Union, continues to use its own currency, the Hungarian Forint (HUF), instead of the Euro. Currently, one Turkish Lira is approximately equivalent to 33.80 Hungarian Forints. This makes Hungary an affordable country compared to most other European nations, both in terms of living costs and real estate prices.

Buying property in Hungary involves certain legal procedures and permits, which may initially seem complicated. However, with the right documents and by following the correct steps, owning a home in Hungary can be an achievable goal.

Conditions for Foreigners Buying Property in Hungary

Foreigners looking to buy property in Hungary generally need to obtain permission from local authorities. However, there are a few exceptions:

• Citizens of European Union countries
• Citizens of the United Kingdom and Switzerland
• Citizens of European Economic Area / European Free Trade Association countries (Norway, Iceland, Liechtenstein)
• Dual citizens, where one citizenship is EU or Hungarian
• People who inherit property in Hungary

If you do not fall into one of these categories, obtaining permission to buy property is mandatory.

Required Documents and Permission Process

The following documents are required to obtain permission to purchase property in Hungary:

• Application Form: A petition submitted to the local government office.
• Fee: An application fee of 50,000 HUF for each property.
• Identity Documents: A notarized copy of your passport, driver’s license, or Hungarian ID card.
• Pre-Contract or Title Deed: A pre-contract or deed of sale dated within the past 21 days.
• Power of Attorney: If the applicant cannot be present during the process, an original power of attorney for the authorized person or lawyer is required.
• Criminal Record Certificate: A clean criminal record must be provided.

The permission process follows these steps:

1. Municipal Approval: Once documents are submitted, the government office contacts the municipal mayor to determine whether the acquisition of the property conflicts with municipal interests.
2. Public Interest Evaluation: The government office consults with the Immigration and Citizenship Bureau and the National Security Directorate to ensure there are no public interest concerns.
3. Decision Making: The final decision is made by the regional government office. The process usually takes a minimum of 15 days.

Property Buying Process and Recommendations

Besides the permission process, there are several additional steps you need to follow to purchase property in Hungary:

1. Property Selection and Negotiation: Remember to negotiate the price of the property you choose, as real estate agents often price properties higher than their actual value.
2. Hiring a Lawyer: You are required to hire a lawyer for the property transfer. This lawyer represents the rights of both the buyer and seller, but the buyer is responsible for the fees.
3. Structural and Archaeological Examination: It is recommended to conduct a structural and archaeological examination of the apartment or house.
4. Purchase Agreement: Once an agreement is reached, the lawyer begins the process to ensure the acquisition is approved by the local government.
5. Title Search and Property Evaluation: After ensuring there are no obstacles on the title deed, the lawyer prepares the purchase agreement and has it signed by all parties.
6. Deposit Payment: Typically, 10% of the agreed price is paid as a deposit to the seller.
7. Closing Agreement: After receiving the purchase permission, the closing agreement is signed, finalizing the transfer of the property.

Real Estate Prices and Market Trends in Hungary

Real estate prices in Hungary vary significantly depending on the region and the type of building. According to data from the leading real estate company Duna House in 2021, the square meter prices are as follows:

The prices of homes in Hungary are determined by factors such as the region and the type of building. Panel buildings are generally more affordable, whereas brick structures are more durable and expensive. The Buda side of Budapest is considered more prestigious and, thus, pricier compared to Pest.

In Budapest, average property prices by district are as follows:

Buying Property in Budapest

Budapest, the capital city of Hungary, is formed by the merging of Buda and Pest, divided by the Danube River. The two sides of the city offer different characteristics. Buda is known for its green areas and historical landmarks, while Pest is known for its bustling commercial areas and vibrant residential neighborhoods. Property prices vary greatly between districts, with properties on the Buda side generally being more expensive.

If you are considering buying a home in Budapest, it is crucial to compare different districts and choose according to your needs and preferences. Buda is ideal for those who want to be close to historical and tourist attractions, while Pest is better suited for those who prefer lively city life, with its restaurants and commercial centers.

Advantages and Disadvantages of Buying Property in Hungary

Advantages

• Affordable Living Costs: Hungary offers lower prices compared to other European countries, which is reflected both in the cost of living and real estate prices.
• Central Location: Being in Central Europe makes Hungary attractive for travel and trade with other countries.
• Rich Culture and History: Hungary offers a pleasant environment for living, thanks to its culture, historical buildings, and natural beauty.

Disadvantages

• Legal Procedures: The legal procedures and permissions required for foreigners to buy property can make the process complex.
• Limited Mortgage Opportunities: Obtaining a mortgage loan as a foreigner is challenging and requires additional conditions.

Payment Methods and Transfer Procedures

When buying a home in Hungary, you will often need to make large international money transfers. Since obtaining a mortgage loan is generally difficult for foreigners, you will likely need to transfer money from your home country to the seller’s account in Hungary. This process may involve international transfer fees and intermediary bank charges, making the total cost higher than expected.

Solutions like Wise provide more favorable rates for international money transfers, making the process more cost-effective. By using Wise, you can convert your Turkish Lira into Hungarian Forints at the market rate, minimizing transfer fees and ensuring that you know the exact amount that will reach the recipient.

Conclusion and Recommendations

Buying a property in Hungary is an attractive option for both investment and quality of life. However, the legal requirements and procedures for foreigners make careful planning essential. Working with a professional real estate agent and lawyer can simplify the process.

If you are considering buying a home in Budapest or other popular areas, carefully assess the different neighborhoods and the advantages they offer. Choose Buda for a greener, quieter environment or Pest for a more vibrant and lively atmosphere.

Take the first step towards owning a property in Hungary today and start exploring the real estate market. If you need more information, consider consulting with experts or real estate advisors to navigate the process safely and effectively.