Archive for April, 2010
How has the recent economic crisis affected the country?
Hungary is coming out of the crisis, the GDP is rising, the Hungarian forint (HUF) has been stabilized and strengthened. Property prices have begun to rise in the spring of 2010. Since prices did not run away in 2007-2008, there was no bubble to speak of on the property market. Construction projects have stopped, except [...]
Can a foreigner buy property in Hungary?
Yes, there is no need to establish a local company, foreign nationals can apply for a permit from the local administrative office (a routine procedure at the municipality) and own free-hold property in the country without restrictions.
What is the capital gains tax when selling?
For a private person it is 25%. Unfortunately no costs of redecoration (painting, new tiles), property management, or accounting can be offset. Only expenses of lawyer, broker agent, the stamp duty, advertisement costs, and value-increasing renovations (expansion, new heating system) may be deducted from the profit for a private person. Make sure you keep the [...]
How much is the tax on rental income?
According to Act CXVII of 1995 on Personal Income Tax, there are three ways of calculating and paying income tax on rental (for private persons). The first method, called Source Tax, is simply deducting 25% of the rental income, submitting a tax return, and making the payment every quarter. The second method, called Combined Income [...]
Do I have to pay VAT when purchasing property?
No. Real property is VAT-exempt by default. However, when purchasing off-plan, brand new property for the first time, there is VAT on the price. This can be reclaimed by a company registered for VAT. In some cases, when property has been purchased and is being resold by a company, it will add VAT to the [...]
Is it true there is no stamp duty on new-built property?
Not true. There is stamp duty, but it is significantly decreased for new-built property. Only the amount over 15 million HUF (ca. 56,800 EUR) is taxed at 4%. Anything below this threshold is tax free. So if you buy a small new-built apartment, there is no stamp duty. However, if the purchase price exceeds 30 [...]
When will the euro be introduced as currency in Hungary?
Introduction of the euro is the most important mid-term goal of the Hungarian economy. Current guestimates place it around 2014. The National Changeover Plan is in place. Details: http://english.mnb.hu/engine.aspx?page=mnb_euro_practical
What is the current base interest rate in Hungary?
5.5% as determined by the Hungarian Central Bank. Check for updates on the following web site: http://english.mnb.hu/Engine.aspx
Where can I find the current exchange rates of the forint?
The web site of the Hungarian Central Bank (MNB): http://english.mnb.hu/engine.aspx?page=napiarfolyamok
Are 100% mortgages available for foreigners?
Not right now. A 60-65% LTV can reasonably be expected.
