partner as legal real estate agency, for all your investments and
vacations in southern Transdanubia, the sunny thermal and holiday
region of Hungary
About the purchase of real estate
in Hungary there are a lot of remarkable tales. The most important
first: we only offer real estates that may be bought by foreign private
persons. Further we will give you some legal
advises about the financial circumstances, because they are also part
of the legal purchase.
information only be valid until Hungary joins the European Union?
When Hungary joins the European
Union the rules about purchase of real estate will not be changed. It
is not possible to say when the market will be liberalised completely,
because this is depending on the development of the market. The date
for complete liberalisation should be May 1st 2014, but the
Hungarian government passed a law, that does not obey this European
rule. However, EEA* citizens
don't need a permit for purchasing real estate any more since 2009,
just in case of agricultural ground there is a permit needed.
May foreigners by
real estates in Hungary?
Yes! Already in the beginning of
the 90´s foreigners were allowed to purchase real estate with
governmental permission. This permission was given according tot
difficult comprehensive rules and there was no juridical review. This
changed already 1996, when a law passed that allowed foreign private
persons to buy real estates and also regulated the procedure and the
legal rights about it
May a foreigner
buy all real estates?
"Everything, with the exception of" is the answer. The forbidden and limited real estates are:
agricultural real estates is nearly impossible, it is not important
whether the entire estate has an agricultural zoning or only a part.
Without being a farmer the maximal surface is limited to 1 ha (2 1/2
acres). This limit is not ment for one single estate, but foor entire
Hungary. There are exceptions for registered farmes living in Hungary.
In all cases you need a permit to buy and quite a list of persons and
institutions have the right of first refusal - in all cases determined
by law. Being foreigner in Hungary you better don't even try to buy
So you can buy everything in the "inner
area" of a community what does not qualify as agricultural ground, as
well as houses in the "outer area" can be excepted from the list of
forbidden real estate. In the "inner area" is no limitation of the
How does the
Hungarian State control these rules?
In 2009 and 2014 there took place important changes in law regulating foreign purchase of real estate:
with the nationality of an EEA* member state do not need a permit to
purchase a property anymore, except for buying agricultural ground.. That does not mean that EEA-citizens may
buy all kinds of real estate, even this is unfortunately reported from
time to time. The restrictions you find here above remain unchanged.
Instead of a formal permission the land registration offices will take
care of the restrictions. Already since 2004 EEA-citizens were allowed
to buy without permission along this regulation if they wanted to
immigrate to Hungary. Restrictions will remain after 2014
as well, although the EU contract doesn't allow any limitation after
April 30th 2014. Our experience with the land
registration offices are that they are stricter in interpretation of
the law and thus buying of a few properties will be impossible, which
were previously permitted. This leads to the distorted situation that
non-EEA-citizens are able to purchase these certain real estates by
getting permission, while these estates are de facto for EEA-citizens
foreigners with other nationalities nothing will change, all their
purchases need permission. First of all the responsible
community will be asked to agree with the transaction. We
don't want to tell you all the bureaucratic circumstances, so
we only tell you the essentials. Also here we find a difference between
the inner and outer area. For the inner area the community needs an
important reason to object the permission. In the outer area every
reason is enough to
object. In the next step the komitat (county) has to
give permission. First the komitat checks the documents of the
Then the pure legal circumstances are verified. Important is here not
only to verify the legal possibility to purchase the property, but also
the possible objection of the community. When the community agreed is
this won't be checked, because the komitat has not to take over
controlling task of the community. But if the community objected the
komitat has to
verify the reasons for objection and is allowed to permit when the
community's reasons are not legal. Citizens of these states are not
allowed to buy any agricultural ground except a tanya (isolated
farmhouse) with less than 1 hectare (2 1/2 ares) ground.
but not least is the judge can review the objection of the komitat.
How and when my
property will be registered?
property in Hungary is
registered by the state. Directly after the completion of the purchase
contract one of its copies will be sent to the land registration office
and the contract will be remarked on top of the deed. Everyone has
access to this information and so a second sale is impossible.
According to the contract's conditions the purchase price -
possibly after deducting an already paid deposit - will be paid
to the seller, who signs a receipt, which also includes a written note
that there are no longer any reasons not to transfer the ownership of
the property. In case a permission is needed the (rest of the) purchase
price will only be paid after issue of the permission. All documents
are handed over to the land and ownership of the property will be
changed into the buyer's name. This usually takes several weeks. .
What are the
practical consequences of the permission procedure?
First of all every contract about
real estates - as long as not permission free - is not valid! For becoming valid the permissions are
needed. So the price - except the pre-payment of course - is paid only
when the komitat agreed and also the use of the real estate will be
handed over after all permissions are available. That also means that
nobody but the buyer has any rights on payment or house, when the permissions are
objected and the pre-payment has to be handed back.
Pre-contract or sales and purchase contract?
of all, both contracts must be certified, a simple sheet of paper or
even an oral preliminary contract is invalid! The situation is
completely different to contracts with real estate agents, which are
always valid - even if the buyer should change his mind later.
pre-contracts are completely unnecessary. Exceptions prove the rule: if
there is a need of changing the registration of a property
Property (eg a newly built house still needs to be registered in
the deed) or there are problems in the person of the buyer (eg the
company that will be the buyer, is not yet registered in the company
register), then a pre-contract makes sense. Thus, the parties are at
least financially bound by the deposit (see also the chapter on your
money) and the obstacles that stand in the way of a sales and purchase
contract, can be eliminated.
The sales and purchase
contract is the central document. Only with this property may be
sold and purchased. Only in his payments, payment terms, delivery date
and many others can be finally agreed. Only with a sales and purchase
contract, the lawyer may apply for blocking the land register against
further transactions. Along with the receipt of the purchase price is
the sales and purchase contract valid proof of transfer of ownership,
which is required by the land registry office for the registration of
the new owner. Transactions requiring approval the sales and
purchase contract is a y to apply for the permission and thereafter the
permission must be submitted to the land registry office.
The roles of
notary and lawyer
responsibilities of the notary and a lawyer in Hungary are regulated
very differently than you might know from home. The notary only plays a
role in case of applying permission and performs a single act; he makes
copies of the passport of the buyer and certifies being a true copy. The
sales and purchase contract - and also the eventual pre-contract - has to be
certified by the lawyer.
who does not certify any contract about a property by a lawyer is
acting unlawfully and may be fined. However, there is an entirely legal
possibility to be represented at the moment of signing of a contract,
but this requires also a notarized power of attorney. As long as there
are no important reasons, we advise you to sign any contracts personally.
Notaries can further take part in case of
sellers who are limited in regulating their personal affairs by law or
other kinds of purchase, for example in case of an inheritance.
What happens with
It is very
important to pay everything along the deposit account of the
lawyer's office. Only using this way you know that the lawyer
spreads all the money according to the contract, when you pay to the
seller you never know who has the right to get
which amount at that moment and you don't know what is
happening with your money. Never pay anything to any real estate agent - except the fees for their services of course.
or full of the purchase price? Most sales do not require a permission.
In these cases the entire purchase price can be paid in a lump sum
without any problems. This shortens the process and saves bank charges.
The situation is different when a purchase requires permission.
Especially when talking about agricultural ground, the the approval is
completely uncertain, while the purchase of a residential building or a
building plot by non-EEA national is unproblematic. In any case, only a
small fraction of the price should be paid before getting permission.
Of course the buyer is completely free to send all of the money to
the lawyer, who will manage the further details -
the benefits already mentioned can be realised this way. Of course, in practice there are cases that the buyer hasn't liquid money before
when signing the contract and cannot transfer the entire purchase
price at once. In this case a prepayment is also advisable, even if it
is only for financial reasons and not for legal reasons.
Eventually the first will be a
pre-payment handed over to the seller. Because contracts in Hungary
may be ended without limitation are financial consequences very
important. The Hungarian law takes therefore the pre-payment. However,
an exception to this arbitrariness is the sale and purchase of real
estate. It can be sued
out of to comply. Often it is not worth the effort and the case will
result in the penalty. The choice is to the loyal party. This
amount the seller may keep when the buyer doesn't go on
buying. There against the pre-payment has to be handed back twice when the seller ends the contract. For a less responsible
contractual partner the pre-payment should be chosen higher. However,
you can also have dissolving conditions in the contract, then a
contract end without penalty or possible juridical action, as soon as
this condition occurs. Think for instance about a clause on a bank
financing and no bank finances.
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Magyar Kúria Real Estate Limited with office in Várong, nearby
the thermal bath of
Igal in Hungary, looks at herself not as real estate agent only, but
mostly as service enterprise around the subject real estate, it
matter whether used or for construction of your house or vacation-home,
on your own or a by us purchased property, as a vacation-house, or for
living there. On behalf a house in the tourist centres, as for example
Siófok at Lake Balaton we can offer you your own farmhouse
in a for
village tourism interesting settlements, or just a townhouse in
Kaposvár, Pécs or other towns. We will help you
with your cure or
vacation and also if you plan to invest between Balaton and Drava, we
work for you in the komitats Somogy, Tolna and Baranya. For all
questions you can contact our customers