Buying a house in Hungary: free for EU citizens, one hectare for whoever isn't a farmer

Many Dutch people buy a village house in Hungary with a patch of land around it for the price of a garage at home. That's possible, and it's exactly that patch of land where you have to pay attention.

A home: no permit

Whoever comes from outside the EU needs a permit from the kormányhivatal to buy a home in Hungary. For EU citizens that doesn't apply: you buy a home, a flat or a building plot on the same footing as a Hungarian. The government decree that regulates the permit is aimed at foreigners from outside the EEA.

The purchase runs through a lawyer

In Hungary it's not the notary but a lawyer who draws up the purchase deed, and the deed is only valid with their countersignature. Take your own lawyer, not the seller's or the estate agent's. The lawyer checks the extract from the land registry, the tulajdoni lap, for mortgages, attachments, easements and pre-emption rights, often puts the money in an escrow account, and lodges the entry. You're the owner on entry in the land registry, not on signing.

The costs

The transfer tax is four percent on the purchase price up to a billion forint and two percent above that. Whoever sells another home within three years before or one year after the purchase pays only on the difference. On top come the lawyer, usually around one percent, the entry in the land registry, and possibly the estate agent. Count on five to eight percent on top of the purchase price.

The limit: one hectare of agricultural land

Here Hungary differs. Agricultural and forestry land falls under an act of its own from 2013, and that says: whoever is not a registered farmer — a Hungarian or an EU citizen with an agricultural qualification or three years of demonstrable farming in Hungary — may own at most one hectare of agricultural land in total, including what they want to buy.

Every purchase of agricultural land must moreover be approved by the agricultural authority, and farmers from the area have a pre-emption right. A village house with an orchard of a hectare and a half behind it is therefore not a house but land: the purchase is refused, or the neighbour buys it from under your nose. Have the lawyer check in the land registry how the plot is classified before you sign, and where necessary have a piece split off.

And the tax on what you buy

With property the tax treaty doesn't follow your place of residence but the bricks: income from immovable property may be taxed in the state where that property is situated. That's in article 6. A property in Hungary is taxed there, with the municipal property tax on top which differs per municipality, and a home you keep in the Netherlands stays taxed in the Netherlands. Hungary exempts that Dutch part from its own tax.