Expenses when Selling Residential Property in Hungary

Tax after selling a house or apartment in Hungary

The default payable personal income tax after the revenue when selling your residential property in Hungary is 25%, payable with your next year’s taxes. This means you would pay a 25% tax after your gains, your profit, if you sold your property with a profit, and right away in the first year after purchasing.

The profit is the difference between your selling price and all provable amounts you had spent on the property, eg. the value of the property when you acquired it:

• purchase price, or, if it was a gift, the amount that was written in your document that you submitted to the Land Registry Office;
• your purchase expenses, e.g. stamp duty cost, which was nearly 6 % of the purchase amount, and also the lawyer’s fee you paid when purchasing;
• additional provable amounts you spent improving the value of the property, like adding a new bathroom for example.

You can thus lower your tax with invoices you kept from improving the property. The invoices should have your (the property owner’s) name on them. If your company is the owner, invoices must have your company’s name on them. If you bought a home for Ft 80 million and you spent another 20 million renovating / improving it, and you can prove the costs with official invoices, and then you sell the property for 120 million, you would pay the applicable percent after the 20 million profit you made.

There is no tax if you do not sell without a profit (in Forints).

Also, the tax percentage is getting lower every year (for residential properties, ie. houses and apartments), so the later you sell, the lower percentage tax you pay after your profit.

• If you sell your home or flat in the same year you purchased it, you must pay the full 25% VAT after your profit.
• If you sell in the 2nd year, you may pay 10 % less. (You pay 25 % tax after 90 % of the profit)
• 3rd year: 40 % less. (You pay 25 % tax after 60 % of the profit)
• 4th year: 70% less. (You pay 25 % tax after 30 % of the profit)
• 5fth year and after: 100% less ((You pay no tax after your profit)

So no tax is to be paid if you sell your home or flat in the 5th year or after.

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Other expenses when selling

There are currently no other obligatory costs when selling.

Your real estate agent’s fee shall be 3-5 per cent of the selling price + 25 % VAT with a company invoice.

You will have advertisement expenses if you wish to sell yourself.

The mandatory lawyer counter-signing the Purchase Contract is customarily paid by the Buyer (usually 1 to 1.5 % of the purchase price + VAT). As a Seller, you only pay a legal fee if you wish to employ your own lawyer to monitor the transaction on your behalf.

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• Expenses when Selling Residential Property in Hungary

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I would be glad to assist you to sell your residential real estate, especially if it is located in district 11, 12 or 22 of Budapest, or in the Buda Suburbs: Biatorbágy, Budakeszi, Budaörs, Érd, Diósd, Törökbálint, or near these.

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