Legislation

NECESSARY PAPERS FOR A REAL ESTATE TRANSACTION IN ROMANIA

INFORMATION REGARDING THE REAL ESTATE TRANSACTIONS IN THE SERBIAN REPUBLIC

BUYING REAL ESTATE BY FOREIGN CITIZENS IN HUNGARY

BUYING REAL ESTATE BY FOREIGN CITIZENS IN HUNGARY

Starting with January 1996 foreign citizens can buy real estate in Hungary.
In order to obtain the ownership title one needs to acquire the authorization from the Administrative Office. It must be mentioned that some land (like agricultural land) cannot be bought by foreign citizens.
The local administrative office can authorize the buying of real estate by foreign citizens or foreign firms if the real estate is not agricultural land, if it is not situated in a protected natural area or if it does not contravene with the national or local public authorities’ interests.
In the case of historical buildings or buildings situated in protected natural areas further authorization is needed from the competent authorities that protect the building.

The costs of the transaction – According to the Civil Code and the Common Law:

Seller is responsible for handing over costs and costs regarding real estate records ( for example the mortgage payment rates). In some cases stipulated by the law the seller will also pay tax (for selling a building less than 15 years after buying it or by selling an estate without buying another one).
The Buyer is responsible for paying the contract costs (lawyer’s fee) and the registering of the transaction in the cadastral register.

At the moment the lawyer’s fee is between 0.5% to 1.5% of the contract’s value but there is also a minimum fee. For example if we buy a real estate for 500000 HUF, 0.5% of this is 2500 HUF, but the minimum layer’s fee is 20000HUF.
If we use a public notary for the paperwork, his fee is stipulated by the order of The Ministry of Justice nr. 14/1991 (XI.26), thus the fee is fixed or can vary according to the contract’s value. For example if the real estate costs between 1 000 000 HUF and 5 000 000 HUF the fe is going to be 56 700 HUF, if the value is bigger than 5 000 000 HUF the fee is going to be 0.5% of the value.

Signing a sales contract:

The buyer makes a deposit, in a temporary account, representing an advance payment of 10 % by means of a law firm and opens an account in a local bank, where he will be able to transfer, form his foreign account, the remaining sum.
The lawyer draws up the sales contract (in two languages, in Hungarian and in the mother tongue of the buyer), which will be signed by both parties.
The buyer transfers the remainder of the purchasing sum, together with all the due taxes.
The lawyer obtains the necessary authorizations and registers the transaction in the cadastral register (this process takes about 4-6 weeks).
After the registration in the cadastral register, the seller receives the money and the buyer receives the keys to his new estate.

The expenses of buying real estate:
Wealth tax
Up to 4.000.000 HUF, about 16.000 HUF, meaningly 2% of the price.
Over 4.000.000 HUF, 2% of 4.000.000 and 6% of the difference.
In the case of holiday homes, the tax is 10% of the estate’s value.
Tax on land
No tax is paid, if the estate is built within 4 years from the moment of purchasing.
Lawyer’s fee
Approximately 1,5% out of the purchasing value.

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