Property Tax
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In Hungary, property tax is called “ingatlanadó” and is based on the value of the property. The rate is set by local municipalities and can vary between 0.1% to 3.5%. For example, if a property has a value of 10,000,000 HUF, the property tax would be 350,000 HUF per year.
Capital Gains Tax (CGT)
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CGT is applicable when a property is sold within 5 years of purchase. The rate is 27% for residents and 32% for non-residents. If a property is sold after 5 years of purchase, then the rate is reduced to 20%.
Inheritance Tax
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Inheritance tax is applicable when a property is inherited. The rate is based on the value of the property and the relationship of the inheritor to the deceased. The rate can range from 0% to 20%.
Gift Tax
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Gift tax is applicable when a property is gifted. The rate is based on the value of the property and the relationship of the gifter and giftee. The rate can range from 0% to 20%.
Tax on Property Income
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If a property is rented out, income tax is applicable on the rental income. The rate can range from 15% to 35%.
Tax Advantages in Buying a House in Hungary:
- The government offers a tax credit for first-time buyers who purchase a property. The credit can be up to 10% of the purchase price.
- If a property is used for business purposes, the owner can claim a tax deduction for the property expenses such as mortgage interest and repairs.
- If a property is rented out, the owner can claim a tax deduction for repairs and maintenance expenses.
Note: The above information is provided as general guidance and is subject to change. It is recommended to consult a local tax professional for specific questions and advice.