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Living in Hungary

What happens if I decide to live and / or work in Hungary?

As part of our service we can put you in touch with advisers about work permits and licences and permits in connection with the opening of new businesses. They can advise on the importation of cars, furniture and pets into Hungary, obtaining payment of your pension in Hungary, healthcare issues, planning your tax affairs, National Insurance and other related matters.

Can my UK state pension be paid to me in Hungary ?

Yes

Are there any other things I should do at the same time as I buy a property?

  • We believe that it saves a great deal of time, effort and money later on if you now review your English Will and make a separate Hungarian Will. For most people the cost of this is fairly small.
  • It is highly advisable for any person who has a property in Hungary but does not live there all the time to nominate a 'fiscal representative'. This is a person to whom the tax authorities can send all correspondence relating to your affairs in Hungary, secure in the knowledge that it will arrive.
  • The fiscal representative must be resident in Hungary and is usually a lawyer, or your tax adviser.
  • GLM can help with property insurance and will arrange for electricity, water and rubbish collection charges to be transferred to your name. GLM will notify the Town Hall that you own the property and register for local rates, open bank accounts and register with the Hungarian authorities for tax and other purposes.

Taxes

  • Non-residents are only taxed in Hungary on their Hungarian-sourced income and gains.
  • Personal tax rates go up to 55%, business and corporation tax is at a rate of 16%.
  • The currency is the Hungarian Forint (HUF)
  • The Hungarian tax year runs from January to December. Tax returns must be filed by 20 April following the year-end.

Local Tax

Local tax in Hungary is similar to the UK Council – this is levied on the sq m of the property and vary according to the municipal authority. Typically £0.40 per sq m. So for a 100 sq m property this amounts to £40 / annum.

Property designated “Ferien” ( summer or holiday homes ) local rates are double the normal rate.

Capital Gains

  • 25% fixed tax rate for personal gains, but some qualifying investments are exempt.
  • There is a 5% reduction in gains per year for each year of ownership after five years. Also, gains can be relieved where there is reinvestment of proceeds within four years.
  • The documented costs of acquiring and developing the property may be deducted against income from the sale e.g. travel, service fees. Hungary has a long standing double taxation treaty with many countries making this situation straight forward. Your tax advisor in the UK should be able to help
  • Capital gains of companies are taxable as normal income but with more generous deductions.

Wealth Tax

  • There is no wealth tax in Hungary apart from the local annual property tax that can go up to 3%
  • This is at a rate of 900 HUF/m or 3% on buildings, and 200 HUF/m or 3% on land.
  • There are ceilings to the amount of taxation.

Property Transfer Tax

Building plot and left undeveloped > 4 yrs – 10% tax
Building plot developed within 4 yrs – no tax

Holiday Homes 10% - as a consequence many buyers do not indicate the property is for use as a holiday home

Everything else - 2% up to 4 million HUF ( around £11,700 ) and 6% anything over that.
The money is only due between 6 and 12 months after the property has been bought

So assuming you purchase a property at 10 million HUF ( £29,500 ) the acquisition tax would amount to
2% at 4 million HUF = 80,000 HUF
6% at 6 million HUF = 360,000 HUF
Total 440,000 HUF = ( £1,300 ) – approx 4.4%

As in many European countries, the price of a property is often understated in the sales contract.

**PLEASE NOTE**
Disclaimer: Some of this information may be time sensitive and therefore may change so all legal and financial information should be checked independently. We can accept no responsibility for errors or ommissions and you are expected to exercise due diligence when making any purchase based on information contained in this website or supplied by GLM or UKGLM.