Hungary is a well developed country in Eastern Europe with high quality of living to foreign investors. Hungary became a member of the European Union on 1 May 2004 and joined Schengen area in December 2007.
Hungary ran the Golden bond residency scheme from 2013 and 2017. But, in Nov 2023, Hungary has restarted the Golden visa program, introducing a “Guest investor visa” program to revive the real estate market, providing residence permits to foreigners to invest in luxury real estate properties.
Benefits
– Best Golden Visa in Europe
– Fastest growing property market.
– Low corporate tax rates (9%)
– Free movement in Schengen area
– Attractive Investment destination in Europe.
– Major Trade hub with Excellent flight connections.
– Path to Hungarian Citizenship
Guest Investor Visa
According to a Bill submitted by Interior ministry to the parliament, on the entry and residence of third country nationals, the guest investor visa gives the right to stay in Hungary for more than ninety days within one hundred and eighty days – and to enter multiple times – and to apply for a guest investor residence permit. The validity period of this visa is “two years” maximum for investors and their family members. The permits can be extended indefinitely as long as the investor holds the investment.
The Guest investor visa can be obtained by a third-country citizen whose entry and stay is of national economic interest in view of his investments in Hungary, or who submits a written undertaking that he undertakes to “implement an investment of a certain amount and type within three months of entering Hungary with a guest investor visa”.
The bill also defines eligible investments amount, namely:
1.Real Estate Fund (REF)
Acquisition of investment certificates of at least EUR 250,000 issued by a real estate fund registered by the Hungarian National Bank,
2.Real Estate
Investment in residential real estate with a value of at least EUR 500,000, located naturally in the geographical territory of Hungary, registered in the real estate register according to the topographical number,
3.Monetary Donation
A monetary donation of at least EUR 1,000,000 to a higher education institution maintained by a public interest trust foundation performing a public task for the purpose of supporting educational, scientific research, artistic creative activities.
Hungary Property Market
The real estate prices in Hungary, particularly in capital budapest, is the still low compared other major european cities, makes it attractive for foreigners to invest in properties. The Property prices in capital floats around EUR 2,500 to EUR 3,000 in downtown districts of 5 and 6. Lake Balaton area is super popular with Germans, French, Brits and other europeans.
Property taxes
Companies or legal persons can also buy properties.. Buying an apartment in Hungary is a straight forward process. The paper work for this is always prepared by the lawyer when the contract of sale is signed with usual 10% deposit and sale registered in 30-60 days.
- Registration costs – 4%
- Lawyer fee 1%
- Broker commission – (Paid by seller)
- VAT 5% (only for newly built properties)
Note: If you buy a land and construct a house on it within 4 years, property tax can be reduced to 0%.
Best Locations – The top locations to buy a property in Hungary are
- Budapest (Downtown districts I, II, III, V, VI, VII, IX, XI) and most expensive Districts XII and XIV
- Lake Balaton Riviera (Siófok, Balatonfüred, Balatonalmádi, Keszthely, Zamárdi, Balatonkenese and Fonyód )
- Other Cities ( Debrecen, Szolnok, Pecs, Gyor, Szeged, Eger)
Capital Gains Tax
Capital gains tax is applicable when a property is sold within 5 years of purchase. The rate is 27% for residents and 32% for non-residents. If a property is sold after 5 years of purchase, then the rate is reduced to 20%.
Income Tax from rental income can vary from 15% to 35%.
Wealth Taxes
There is no net wealth/worth taxes in Hungary. The general inheritance and gift tax rate is 18%, and a preferential 9% tax rate applies to residential property.
Permanent Residency
Hungary grants two types of permanent residence permits to foreigners based on habitual residence. The National residence permit is granted after 3 years of living and EC permanent residence after 5 years of continuous living without absence.
Hungarian Citizenship
Investors can naturalize for citizenship with PR status after 8 years of residence. Applicants must have no criminal record, satisfy necessary subsistence and also pass civic and hungarian language test.
Please contact us for more information.