Hungary - The Figures

Can I invest with confidence?
Yes.  When you buy a property in Budapest, you are dealing with a reputable Estate Agent in the UK who is a member of the NAEA.  The partner agent in Budapest will only deal with reputable developers who have a bank guarantee and sellers.
Buying as an Individual or Company?
Please see our individual paper on which is the best method of purchase for you.

 
How complicated is it to establish a company?
It is a routine procedure and will take a day.  A lawyer will need the name of the new company, its seat, personal particulars of the owners of the shares.  After the Articles of Association are prepared, specimens of signature need to be signed in front of a public notary, then a bank account must be opened.  All the documents must go to the accountant who will take care of all the administration and prepare regular reports.  You must ensure all invoices, whether issued abroad or in Hungary contain the name and address of your company, as this is the only way to account for expenses.  Personal presence in Hungary is required to open a bank account.  When selling, it can be simpler by selling the company.

 
What are the expenses for buying?
Costs will vary depending on the price and type of property.

New Properties up to €120,000
No Stamp Duty Payable
4.5% agents and lawyers costs

Resale or New Properties over €120,000
4.5% agents and lawyers costs
6% Stamp Duty

What and when are Stage Payments made?
Resale
10% on contract - Non refundable (If the seller withdraws, is responsible for repaying double).  This is normally paid when in Budapest.  The best way is through Visa or Mastercard at a Hungarian bank immediately before signing the contracts.
90% usually within 45 days
Stamp Duty payable between 2 weeks and 9 months

New
Normally stage payments and will vary depending upon the developer.

Taxation
There is a double taxation treaty between the UK and Hungary.  Private Individuals pay 20% income and CGT.  Companies pay 16% corporate tax.

 

Which apartments are the easiest to rent?
Highly renovated, fully furnished in central areas.  The higher standard of renovation, the more it appeals to the Western tenant as do new apartments.

 
Anticipated rental return?
5-6% Yield

 
Are there guaranteed rentals?
Our partner agent quite often arranges a Pre-let for a whole new apartment block.  PARSON International will be able to indicate which of these are available.

 
What are the Management Fees?
Our partner agent in Budapest provides a full management service at 12% of rent received.

 
What are the letting costs?
One months rents + VAT if the apartment is rented for a year.

 
What are the costs for furnishing an apartment?
Approximate costs are:
Studio Apartment         £3,500
1 Bedroom Apartment £4,750
2 Bedroom Apartment £5,750

 
What is the average capital gains?
Capital appreciation can be expected of 15-25%

Can a mortgage be arranged?
PARSON International can arrange mortgages up to 50/70%.  Please ask for further details.