How is the property purchase process in Hungary?

To purchase any type of property in Hungary, a private person needs a permit from the district council of the local municipality. In Budapest, any purchase of property is subject to the approval of the Administrative Office (AOB) while no restrictions apply to ownership of property by Hungarian legal entities.

Hungarian law requires that real estate purchases shall be concluded through private contract (purchase agreement) countersigned by a lawyer. Non-Hungarian citizens are further obliged to gain the approval of the relevant Administrative Office in order to purchase property as a private person. According to regulations most foreigners should receive a permit within 2-3 months.

Most lawyers therefore advise foreign nationals to set up a company registered in Hungary in order to purchase property. In this case, no permit is needed. This is a fairly swift and easy procedure (taking 1-2 days), and all expenses can be written off.

The most relevant steps to purchasing a property in Hungary are described below.

Once a property has been chosen, and the negotiation is carried out, should be useful to employ a lawyer/solicitor for the conveyance procedure. Title searches are usually included in the services offered by the lawyer. In some cases, a structural and/or architectural survey of the apartment and building may be recommended.

As soon as an agreement is reached between the parties, the lawyer will start the process of securing local government approval of the purchase (unless the buyer is setting up a company). When the title has been declared clear from liens or encumbrances, the purchase agreement is then drafted by the lawyer. This written contract, countersigned by the lawyer, is necessary to validate the transfer of property.

A meeting between the seller, buyer, and lawyer is then arranged, at which the purchase contract is signed in the presence of the parties and a representative of the real estate agent. Now the buyer is expected to pay 10% of the agreed price as down payment (deposit) and the purchase contract has to be submitted to the competent land registry office within 30 days from the date of its signature.

Because of the permission process, purchase process closing usually takes place within 60-90 days after initially signing of the purchase contract. The buyer must notify the seller immediately after receiving the purchase permission from the Administration Office and definitive closing usually takes place within a week. The most important step is when the buyer and seller sign the Closing Statement, which is a declaration that the purchase price has been paid in full by the buyer to the seller and the possession of the property has been then transferred. The final registration of ownership rights takes about six months.

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