Authored by the expert who managed and guided the team behind the Hungary Property Pack
Everything you need to know before buying real estate is included in our Hungary Property Pack
Are you considering investing in Hungary’s real estate market? What are the legal steps, tax implications, and cultural differences you need to understand before taking the plunge? What challenges do foreign investors typically face, and how can you overcome them?
These are the questions we hear most often from foreign investors because we’re actively connected to this market. We’ve spent time working with local agents, developers, and investors, so we know what works—and what doesn’t. That’s why we’ve written this article: to provide a clear guide that answers the questions we get asked daily.
Our goal is to help you, as a foreigner, to navigate the property buying process with confidence. If you think there’s something we missed or want more details, let us know (please do!). Your input helps us refine and improve our advice for everyone.
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1) Prepare for delays if buying property in Hungary, as foreign buyers need a municipal permit that takes weeks to process
If you're thinking about buying property in Hungary as a foreigner, there's a key step you need to be aware of: you must obtain a permit from the local municipality.
This isn't just a quick formality. The process can take several weeks, so it's important to plan ahead. The permit is required by Hungarian legislation and is typically handled by a lawyer who assists with the deal. Expect the initial approval to take up to 4 weeks.
Hungary's Housing Act and Government Decree 251/2014 lay out the rules for non-citizens buying property. You'll need a Property Purchase Permit, which involves submitting documents like proof of identity and a criminal record certificate.
The review process for this permit can take about 45 days, so patience is key. It's not just about filling out forms; the local authorities take their time to ensure everything is in order.
Having a local lawyer can be a big help. They know the ins and outs of the system and can guide you through the paperwork. This can make the process smoother and help avoid any unnecessary delays.
Remember, this is a standard procedure for foreign buyers in Hungary. It's all part of ensuring that property transactions are transparent and legal.
Sources: Immigrant Invest, Golden Visa Lawyers
2) Focus on properties with strong public transport links in Hungary, as this is crucial for attracting renters
Investing in properties with good public transport links in Hungary is a smart move.
In recent years, especially around 2023 and 2024, areas with strong public transport connections saw a significant rise in property values. This is due to what's called land-value uplift, where government investments in transport infrastructure lead to higher property values. For instance, commercial properties near public transport hubs experienced value increases of up to 120% within 410 meters of a station.
Properties near metro or tram lines also tend to have higher rental yields. In Budapest, the demand for modern office space was driven by a 38% rise in contract renewals, largely because of the convenience of public transport links. This shows that tenants prefer properties with easy access to public transport, which can significantly influence rental demand and property values.
The Hungarian government is heavily investing in public transport infrastructure, with plans to pour HUF 1,500 billion (EUR 3.7 billion) into railway infrastructure by 2035. This investment is expected to boost the value of nearby properties. Real estate market analyses consistently highlight the premium on properties with good transport links.
In 2023, the gross value added of real estate activities peaked at 7.5 trillion forints, partly due to the rising demand for properties with convenient access to public transport. This trend underscores the importance of transport links in property investment decisions.
Sources: ITF OECD, MNB, Daily News Hungary, Statista
Our team found this video where properties located near major public transport hubs are highlighted, showing how convenient access to public transportation adds value to properties.
3) Consider smaller Hungarian cities like Debrecen or Szeged for higher rental returns
Buying property in smaller Hungarian cities like Debrecen or Szeged can be more lucrative than in Budapest.
In 2023, the average resale property price in Debrecen was about €1,200 per m², and in Szeged, it was around €1,100 per m². Compare this to Budapest, where prices soared to approximately €2,200 per m². This price difference means you can snag a property in these smaller cities at a much lower cost, which often translates to better rental yields.
Debrecen's rental yields for apartments in 2023 ranged from 4.47% to 5.43%, with an average of 5.06%. While specific numbers for Szeged aren't available, the rental prices are similar to Debrecen, hinting at competitive yields. Budapest, on the other hand, had rental yields averaging around 5.12% in Q2 2023, which, while decent, doesn't offer the same potential for growth.
What makes Debrecen and Szeged particularly appealing is the stable demand for rentals. Both cities host universities that draw in a large student population, ensuring a steady need for rental properties. This demand is bolstered by ongoing business development and infrastructure improvements, which promise to keep the rental market thriving.
Investors can expect properties in these cities to remain occupied, providing a consistent stream of rental income. The combination of lower purchase prices and stable demand makes these cities a smart choice for those looking to invest in Hungarian real estate.
Sources: Hungary Today, World Estate, Imigrant Hungary
4) Remember that buying property in Hungary doesn’t grant residency, a common misconception among foreign investors
In 2023, foreign investors snapped up 8,000 homes in Hungary, marking a significant rise in interest.
While buying property is popular, many mistakenly think it grants residency. But in Hungary, owning a home doesn't automatically mean you can live there permanently.
To actually get a residence permit, you need more than just a house. You'll have to secure a Guest Investor Visa, show you have medical insurance, and prove you have enough money to support yourself.
Even with the Golden Visa Program making a comeback in 2024, the government is clear: buying property alone won't get you residency. This is a common misunderstanding among international buyers.
Investors from all over the world often find themselves confused and disappointed when they realize property ownership isn't a ticket to residency.
Sources: Imigrant Hungary, XpatLoop, Don't Die Wondering
5) Don’t assume all properties include parking, especially in urban areas
In Budapest, the number of cars has surged dramatically, especially by 2023 and 2024.
With nearly 14 million cars in the Central Hungarian region, finding a parking spot is like striking gold. Many properties in Budapest, particularly in the bustling city center, often come with a disclaimer: "no parking" or "street parking only." This is because parking spaces are incredibly scarce, and urban planning reports highlight this shortage.
To tackle this, the city has been working on solutions like expanding Park and Ride networks and tweaking on-street parking fees. But if you're eyeing a property here, be prepared for the parking challenge. Surveys show that parking is a top concern for property buyers in urban areas, and it's easy to see why.
Local government policies have even put a cap on new parking developments to curb congestion, which means fewer parking options are available. So, if you're considering buying a property in Budapest, keep in mind that parking might be a bit of a puzzle to solve.
Sources: BKK, Reinventing Parking, Eston
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6) Consider properties near universities for high-demand student housing to maximize profits
Investing in properties near universities in Hungary is a smart move because student housing is always in high demand.
In recent years, Hungary has seen a significant increase in university admissions, with over 100,000 students admitted for the second year in a row. This surge means more students are on the hunt for housing, especially close to their campuses. The demand is so strong that student housing occupancy rates often exceed 90%, even during tough times like the pandemic.
Rental prices near universities are climbing, reflecting this demand. Take Szeged, for example, where rental prices jumped by 20-25% compared to the previous year. This trend suggests a promising return on investment for property owners. Students in Hungary often prefer off-campus housing, which further fuels the demand for rentals.
One reason for this preference is the limited availability of dormitory spaces, pushing students to seek alternatives. This situation creates a steady stream of rental income for property investors. The consistent demand for student housing makes it a reliable investment opportunity.
Moreover, the student population's growth isn't just a temporary spike. With universities continuing to attract more students, the need for nearby housing remains strong. This ongoing trend ensures that properties near universities will likely stay in high demand.
For those looking to invest, focusing on areas around universities could maximize profits, as the student housing market shows no signs of slowing down. Investing in these areas offers a stable and potentially lucrative opportunity.
Sources: Debrecen Sun, Hungarian Conservative, Daily News Hungary, Brookfield Oaktree
7) Expect seasonal fluctuations in Hungary’s real estate market, with increased activity in spring and fall
The Hungarian real estate market is known for its seasonal trends, with more activity typically observed in the spring and fall.
In October 2024, home sales increased by 37% compared to the previous year, hinting at a strong recovery and setting the stage for a busy spring in 2025. This pattern isn't new; it's been consistent over the years, as seen in historical transaction data.
Real estate agencies like Duna House and Ingatlan.com have noticed that both transactions and mortgage applications tend to rise during these seasons. In October 2024, the number of transactions surpassed the previous year's level, and mortgage outlays reached HUF 117 billion, more than double the amount from the same month a year earlier.
Online property search trends also reflect this seasonal activity, with higher search volumes in the spring and fall. In October 2024, over 320,000 people made inquiries about residential properties, marking a 31% increase year-on-year.
This surge in interest aligns with the observations of real estate agents, who note busier periods during these seasons. It's a time when both buyers and sellers are more active, making it an ideal period for those looking to enter the market.
Sources: Daily News Hungary, Property Forum
8) Keep in mind that locals in Hungary prefer buying over renting, which can impact rental market dynamics
In Hungary, over 90% of people own their homes, one of the highest rates in the EU.
This trend is driven by a strong cultural preference for property ownership, which surveys consistently highlight. Even though there was a 17.6% drop in second-hand home sales in 2022, it doesn't mean people are shying away from buying. In fact, there was a 19% growth in home purchases in 2021, showing a historical demand for owning homes.
Government incentives are also playing a big role. With billions of HUF from bonds and pension savings flowing into the market, the real estate scene, especially in Budapest and major towns, is expected to get a boost. This makes buying even more attractive.
For those considering renting, it's worth noting that rental yields in Hungary are relatively low compared to other European countries. This, along with the high homeownership rate, means fewer rental properties are available, making it tough for renters, especially in bustling areas like Budapest.
Demographic studies back this up, showing a high percentage of owner-occupied housing. This reinforces the cultural lean towards owning rather than renting, which can affect rental market dynamics.
So, if you're thinking about buying property in Hungary, understanding these local preferences and market conditions can be quite valuable.
Sources: Global Property Guide, Daily News Hungary, Trading Economics
We have made this infographic to give you a quick and clear snapshot of the property market in Hungary. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
9) Prioritize central Budapest properties, as they appreciate faster than those in the outskirts
When buying property, remember that location is key.
In central Budapest, properties tend to appreciate faster than those on the outskirts. For instance, in early 2023, while areas like Pest saw a 35.62% drop in prices, central Budapest enjoyed a slight 3.47% increase. This shows a more stable market in the heart of the city.
Demand is another factor driving this trend. By October 2024, Budapest's real estate market saw a 37% rise in transactions compared to the previous year. Many buyers, about 40%, were investing, often choosing central spots for their higher rental yields and better returns.
Central neighborhoods are buzzing with activity. The 6th district, for example, is a hot spot for Airbnb rentals, attracting tourists and foreigners. This popularity boosts property values, making it a prime investment area.
Media and experts frequently highlight the growth of these central areas. The presence of tourists and the vibrant atmosphere contribute to the higher appreciation rates, making central Budapest a smart choice for investors.
Sources: The Wandering Investor, Daily News Hungary, Global Property Guide
10) Understand that short-term rentals in tourist areas are popular but may face regulatory changes
In Budapest, short-term rentals like Airbnb have surged in popularity, especially in tourist-heavy areas.
With tourism booming, Budapest saw a 41% increase in available Airbnb apartments, leading to a significant rise in revenue for private accommodations. This trend is fueled by the influx of visitors, as 16 million tourists explored Hungary in 2023, boosting the demand for short-term stays.
Summer occupancy rates for these rentals have jumped by 22% compared to 2019, reflecting the growing appeal of Airbnb-style accommodations. However, this popularity comes with challenges, as regulatory changes loom on the horizon.
In Budapest, there's an ongoing debate about potentially banning Airbnb in certain districts. The government is keen on balancing tourism growth with local needs, a situation similar to what cities like Barcelona and Amsterdam have faced.
These cities introduced regulations to manage the impact of short-term rentals on local housing markets. Understanding these dynamics can give you an edge if you're considering investing in property here.
Keep in mind that while short-term rentals are lucrative, they may face regulatory changes that could affect your investment. Staying informed about these developments is crucial for making smart property decisions.
Sources: Property Forum, ETIAS, Budappest
In this video, we can see that short-term rentals like Airbnb are popular but face regulatory oversight, requiring specific licenses and permissions. The video discusses the importance of checking apartment buildings for Airbnb standards and licensing before investing.
11) Consider properties with energy-efficient features, as demand rises with increasing energy costs and environmental awareness
In 2023 and 2024, the real estate market is seeing a big shift towards energy-efficient properties.
With energy costs climbing, many are looking for homes that can cut down on energy bills. The Hungarian government is on board, rolling out programs like the Home Renovation Programme (HRP) to encourage energy-saving upgrades.
It's not just about saving money; there's a growing environmental awareness among buyers. People want to reduce their carbon footprint, and this is pushing up the demand for homes that offer energy savings.
The government is sweetening the deal with incentives to make these upgrades more affordable. The HRP program, for example, provides interest-free loans and grants for renovations like insulation and modern heating systems.
These financial perks make it easier for homeowners to invest in energy-efficient features, which in turn is boosting the demand for such properties.
Sources: Odyssee-Mure, Budapest Business Journal, CE Energy News
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12) Consider how Hungary’s government policies, like the Family Housing Allowance Program, impact property values and demand
The Hungarian real estate market is heavily influenced by government policies, especially the Family Housing Allowance Program (CSOK).
This program has sparked a lot of interest among buyers, with a 16% increase in activity reported by Duna House in mid-2023. The changes in the housing benefit scheme have made it more appealing for families to dive into the property market.
CSOK has been beefed up with more financial support for families with kids. Starting July 2025, the family tax allowance is set to rise, giving families extra funds that can go towards buying homes. This boost is expected to keep rolling into 2026, pushing demand even higher.
Looking back, the CSOK program has historically driven up property prices. After the conversion of foreign currency loans in 2014, house prices jumped by 6.6%. This shows how government moves can hike up property values.
Experts predict a 10-15% increase in house prices in 2024, partly due to these government policies. This trend is something potential buyers should keep an eye on.
Sources: Hungary Today, Hungarian Conservative, Global Property Guide
13) Consider Budapest’s District VIII for investment, as urban renewal projects have made it a new hotspot
Budapest's District VIII is now a hotspot for property investment thanks to ongoing urban renewal projects.
In recent years, property prices in District VIII have surged, sometimes doubling or tripling, making it a magnet for investors. This transformation is largely due to the district's strategic urban renewal efforts, which have breathed new life into the area.
Early 2024 saw a notable increase in property transactions in District VIII, signaling a rebound in the real estate market after a dip in 2023. This uptick reflects growing confidence among buyers and sellers, who see the district's potential for growth.
The Budapest Municipality and the 8th District have been instrumental in this change, establishing RÉV 8 Ltd. to manage urban renewal projects. Their work includes major restructuring in areas like Corvin and more subtle regeneration in places like Magdolna, all while focusing on keeping local communities intact.
Government investment in infrastructure has further boosted the district's appeal. Enhanced parks, roads, and street lighting have made District VIII more attractive to both residents and investors. The media has taken note, highlighting the district's gentrification and newfound charm.
Real estate agents report a growing interest in District VIII, citing its potential for high yields and profitable resale. The influx of new businesses and amenities has drawn young professionals and creatives, adding to the district's allure.
Surveys indicate a shift in perception, with many now viewing District VIII as a prime spot for investment and living. Successful case studies show the district's profitability, especially when approached with local insight. Rental yields here are competitive, offering decent returns for investors. The local government's plans for continued investment in infrastructure and public spaces, along with demographic shifts, have solidified District VIII's status as a property investment hotspot.
Sources: Citego, Isaro, The Wandering Investor
We believe this video shows how District VIII, once less desirable, has become an attractive location for investment, particularly highlighting urban renewal developments.
14) Negotiate prices in Hungary, as sellers usually anticipate some haggling
In Hungary, haggling is a common practice in the real estate market.
When you're looking at properties in Budapest, expect some price movement. Listings often drop by about 3% over time, and with a bit of negotiation, you can shave off another 3%. This means you could see a total price reduction of around 6%, which is pretty standard here.
Experts and case studies back this up, showing that buyers can often negotiate 5-8% off the listed price. This is largely thanks to savvy buyer’s agents who know how to work the system and get the best deals for their clients.
Talking to local sellers, it's clear they expect some back-and-forth. They're usually open to lowering prices if it means a quicker sale or a deal that benefits them in other ways.
Understanding this cultural nuance can be a big advantage. Hungarian sellers typically anticipate some haggling, so don't be shy about negotiating. It's all part of the process and can lead to a better price for you.
So, if you're thinking about buying property in Hungary, remember that negotiation is not just accepted, it's expected. This insider knowledge can help you secure a more favorable deal.
Sources: The Wandering Investor, Morningstar
We made this infographic to show you how property prices in Hungary compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
15) Work with a reputable local agent in Hungary, as the property market is less transparent than in Western countries
The Hungarian property market can be tricky to navigate due to its lack of transparency.
In 2023, Transparency International Hungary pointed out that the country faces systemic issues with corruption in real estate. This makes it tough for investors to get a clear picture of the market. If you're thinking about buying property here, it's crucial to work with a reputable local real estate agent who knows the ins and outs.
Foreign investors often find it challenging to get reliable information and deal with the bureaucratic processes involved. Compared to Western countries, Hungary's market is less transparent, which can be risky despite the affordable property prices. Local agents are invaluable in helping navigate these complexities.
Local news often highlights issues like corruption and lack of regulation in the property sector. The government's efforts to strengthen rules for safeguarding business secrets have only added to concerns about transparency. Surveys show that foreign buyers heavily depend on local agents due to the complexity of the market.
Understanding the Hungarian property market requires insider knowledge, and local agents can provide that. They help bridge the gap in information and make the process smoother for foreign investors. Without them, navigating the market can feel like a maze.
Sources: Hungary Golden Visa, Transparency International Hungary, Immigrant Invest
16) Take advantage of Hungary’s relatively low property taxes for long-term investment strategies
Hungary is becoming a hot spot for property investors, thanks to its low property taxes.
One big draw is the absence of an annual property tax on residential real estate, a common expense in many European countries. This means you can own property without worrying about yearly tax bills, which is a relief for many investors.
When you buy property in Hungary, the transfer tax is also quite appealing. The general rate is 4% of the purchase price up to HUF 1 billion, and it drops to 2% for anything above that. This is a bargain compared to other European nations, making Hungary a smart choice for property buyers.
The Hungarian government is also doing its part to make the housing market more attractive. They've slashed the VAT on new apartment sales to 5%, a move that's expected to boost sales and make the market even more vibrant. This change is part of a broader strategy to encourage investment and growth in the real estate sector.
These tax benefits, combined with Hungary's strategic location in Europe, make it a compelling option for those looking to invest in property. The country's efforts to create a favorable investment climate are paying off, drawing interest from both local and international buyers.
With these advantages, Hungary stands out as a promising destination for property investment, offering a mix of affordability and potential for growth. Investors are taking note, and the market is buzzing with activity.
Sources: MGZ, The Luxury Playbook, IMF
17) Be prepared for cash transactions in Hungary, as they may surprise foreign investors accustomed to digital payments
In Hungary, cash is still king when it comes to buying property.
Even though cash transactions at stores dropped from 83% to 78% between 2020 and 2023, cash use in online payments actually went up. This might seem odd, but it highlights how much Hungarians still prefer cash.
For foreign investors, this reliance on cash can be a bit of a surprise. They're used to digital payments and find it tricky to deal with the Hungarian property market, where many deals are still done in cash.
Imagine walking into a real estate office expecting to swipe your card, only to find out that cash is the preferred method. This is a common scenario in Hungary, and it can be a real eye-opener for those not familiar with the local customs.
In Hungary, the preference for cash isn't just about tradition; it's also about trust and security. Many locals feel more secure handling cash, especially in big transactions like buying a house. This cultural nuance is something foreign investors need to understand when entering the market.
So, if you're thinking about buying property in Hungary, be prepared for a different experience. Cash will likely play a big role in your transaction, and understanding this can make the process smoother.
Sources: Statista, Trade.gov, Mastercard Digital Payment Index
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18) Avoid properties in Hungary with unclear ownership titles, as legal disputes over property rights are common
When buying property in Hungary, make sure the ownership title is crystal clear.
In recent years, especially around 2023 and 2024, there have been many stories in the media about foreign buyers getting caught in legal tangles due to unclear property titles. These issues often lead to long and expensive legal battles, which can be a nightmare for anyone looking to invest in a new home or property.
Real estate experts in Hungary frequently stress the importance of having a clear title. They often see cases where property rights are disputed, causing significant headaches for buyers. This is a recurring theme in their advice, highlighting the need for thorough checks before making a purchase.
Title insurance companies have noticed a rise in claims related to property rights disputes, which suggests that unclear ownership titles are a widespread problem. Many property buyers express concerns about this issue, often based on stories they've heard from others who have faced similar challenges.
Surveys show that buyers are worried about ownership clarity, and this concern is not unfounded. The increase in title insurance claims is a clear indicator that these problems are not going away anytime soon. It's crucial to do your homework and ensure everything is in order before signing on the dotted line.
To avoid potential pitfalls, it's wise to consult with local experts who understand the intricacies of the Hungarian property market. They can help you navigate the process and ensure that your investment is secure from any legal disputes.
Sources: Hungary’s Real Estate Market, Hungary’s Land Registry System, Human Rights Watch
19) Expect more flexibility in Hungary’s rental market, as it is less regulated than in many other European countries
In Hungary, the rental market is surprisingly less regulated compared to many other European countries.
Landlords in Hungary enjoy a unique freedom because they can set rental prices based on market demand without much government interference. This flexibility is quite different from places with strict rent control, where prices are often capped.
Another aspect that stands out is the limited tenant protection laws. This means landlords have more control over their properties, making it easier to manage and evict tenants if necessary. In contrast, many European countries have stringent laws that heavily favor tenant rights.
Informal rental agreements are quite common in Hungary, which means many rentals operate outside of strict regulatory frameworks. This allows landlords to enjoy even more flexibility since these agreements aren't bound by formal documentation or stringent rules.
Shorter notice periods for ending leases add to this flexibility, enabling landlords to adjust rental terms more frequently. This can be particularly advantageous in a fluctuating market where conditions change rapidly.
Sources: Global Property Guide, University of Bremen
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.