It is often necessary to invest in equity capital since it is not possible for a non-resident Hungarian to obtain a loan from a Hungarian bank. Moreover, foreign banks (especially French ones) are reluctant to grant a loan for a property located outside their region of activity.
We direct our research according to the criteria specific to each investor. Nevertheless, three main criteria such as location (an area of high rental demand), price (ideally below market) and potential rental profitability (yield in line with our investors' expectations) are the basis of an efficient search, to which several secondary criteria need to be added.
Compared to France, the acquisition process is very fast in Hungary. Once we have selected a property that meets your expectations, the organisation of the purchasing act only takes a few days. The part that requires the most work during the investment process is the search for the property (in accordance with all the necessary criteria) as well as the execution and supervision of the works, followed by the interior design and decoration.
Property income can be taxed at a flat rate of 15% (of net rents excluding charges), which allows you to benefit from a favourable tax regime. In addition, two possibilities enable you to reduce the taxable base according to what is best for you in your situation: you can benefit either from a flat-rate allowance of 10%, or a deduction from your actual expenses. Please note that there is no property and housing tax. Finally, the existence of a non-double taxation agreement between France and Hungary allows you not to pay property tax in France on your Hungarian real estate income.
It is possible to set up a company to invest in Hungary, especially a KFT (equivalent to a LLC), which has advantages but also some constraints. Yet, this process is only justified for the purchase of several properties in order to be able to amortize the costs of setting up and running this type of structure.
There are two main costs when buying a property: the 4% transfer tax and the equivalent of the notarial costs that sums up to 1% of the purchase price (carried out in Hungary by a lawyer). So, in total, the acquisition costs amount to approx. 5%.
Yes, you have the same rights as Hungarian investors. There are no legal restrictions for investors from the European Union to invest in real estate in Hungary.