Long-Term Tenancy Contracts in Hungary: What Landlords Must Include

Printed Hungarian tenancy contract on a desk with apartment keys and a pen, natural light from a Budapest apartment window

Published: June 5, 2026 · Reading time: 10 min · By Buy Budapest Apartments Editorial Team

A valid long-term tenancy contract in Hungary must be in writing, identify both parties and the property, state the rent amount and payment method, specify the deposit (capped at two months’ rent for residential leases), set a fixed or open-ended term, and include notice periods. Hungarian civil law governs the relationship, so clauses that contradict the Civil Code are void even if both parties signed them.

The legal framework governing Hungarian tenancy contracts

Residential tenancy in Hungary is regulated primarily by Act IV of 1959 (the former Civil Code) as replaced by Act V of 2013 (the new Civil Code, or Polgári Törvénykönyv, in force since 15 March 2014), supplemented by Act LXXVIII of 1993 on the rules of residential and non-residential tenancy (lakástörvény). The 1993 tenancy act is the more specific statute and takes precedence for residential lettings. Where it is silent, the Civil Code fills the gaps.

The key practical point for new landlords is that Hungarian tenancy law is partly mandatory. Certain protections for tenants cannot be contracted away. If your contract contains a clause that removes a statutory tenant right — for example, waiving the tenant’s right to a written notice period — that clause is unenforceable, even if the tenant agreed to it in writing. This makes it important to draft contracts with the statute in hand, not just a template downloaded from the internet.

Non-residential (commercial) lettings follow a slightly different regime with more freedom to agree terms. If you are renting out a shop, office, or storage unit in Budapest, the rules on deposit caps and notice periods are more flexible. You can read more about that in the context of commercial property in Budapest.

Essential clauses every contract must contain

Hungarian law requires a residential tenancy contract to be in writing. An oral agreement can be valid for very short-term arrangements, but for any letting intended to last more than one year — or any letting you want to be able to enforce — a written contract is non-negotiable. The document should be signed by both parties, with each side retaining a copy.

At minimum, every long-term tenancy contract in Hungary should include the following elements:

  • Full identification of both parties — name, address, and tax identification number (adóazonosító jel) for individuals, or company registration number for legal entities.
  • Property description — the full address, the property’s land registry number (helyrajzi szám), floor area, and a brief description of the condition at handover.
  • Commencement date and term — whether the tenancy is fixed-term (határozott idejű) or open-ended (határozatlan idejű). Fixed-term contracts are common in Budapest for one or two years.
  • Rent amount and payment method — the monthly sum in Hungarian forints (HUF) or euros if agreed, the due date, and the bank account details for transfer.
  • Deposit amount — the sum held, the conditions for its return, and the deadline for return after the tenancy ends.
  • Notice periods — the required notice for each party to terminate, which must comply with statutory minimums.
  • Permitted use — residential use only, or whether a home office or small business activity is permitted.
  • Maintenance responsibilities — which repairs fall to the landlord and which to the tenant.
  • Rules on subletting — subletting without written landlord consent is prohibited by default under the tenancy act, but it is worth stating this explicitly.

A handover protocol (átadás-átvételi jegyzőkönyv) signed on the day the tenant moves in is not legally required but is strongly recommended. It records meter readings, the condition of fixtures and fittings, and any existing damage. Without it, disputes about deposit deductions become very difficult to resolve.

Hungarian tenancy contract documents spread on a desk with a pen and apartment keys
A written tenancy contract and a signed handover protocol are the two documents every Budapest landlord should have before handing over the keys.

Deposit rules and what landlords can deduct

Under the 1993 tenancy act, the security deposit for a residential property cannot exceed two months’ rent. This cap is mandatory — you cannot charge three months even if the tenant agrees. In practice, most Budapest landlords charge exactly two months, which on a 200,000 HUF/month apartment means a 400,000 HUF deposit held for the duration of the tenancy.

The deposit must be returned within 30 days of the tenancy ending and the property being handed back, unless the landlord has a legitimate claim against it. Legitimate deductions include unpaid rent, unpaid utility bills that are the tenant’s contractual responsibility, and damage beyond normal wear and tear. “Normal wear and tear” (rendeltetésszerű használatból eredő elhasználódás) is not defined precisely in the statute, so disputes are common. Courts generally accept that minor scuffs on walls, faded paintwork after several years, and worn carpet in high-traffic areas are normal wear. Holes in walls, broken fixtures, and stained flooring are not.

If you intend to deduct from the deposit, document everything with dated photographs and written itemisation. If the deduction is disputed, the tenant can take the matter to the local district court (járásbíróság). Landlords who fail to return the deposit within 30 days without justification can be ordered to pay interest on the withheld amount.

Notice periods and early termination

Notice periods in Hungarian residential tenancy law depend on whether the contract is fixed-term or open-ended, and on the reason for termination.

Situation Who gives notice Minimum notice period
Open-ended contract, no fault Landlord 3 months (longer if the tenant has lived there over 3 years — consult a lawyer)
Open-ended contract, no fault Tenant 1 month
Fixed-term contract, mutual agreement Both parties As agreed in writing
Fixed-term contract, tenant breach (e.g. rent arrears) Landlord Immediate termination possible after statutory notice of breach
Fixed-term contract, landlord breach Tenant Immediate termination possible

For fixed-term contracts, neither party can unilaterally end the tenancy before the end date without a valid legal reason. If a tenant leaves early without cause, they remain liable for rent until the end of the fixed term or until the landlord re-lets the property — whichever comes first. Landlords have a duty to mitigate loss by actively trying to find a new tenant.

Early termination clauses that allow either party to exit with, say, two months’ notice during a fixed term are permissible and common in Budapest. Many landlords include a break clause (felbontási jog) after the first 12 months of a 24-month contract. This gives flexibility without sacrificing the security of a longer agreement.

Under Hungarian tenancy law, a landlord terminating an open-ended contract without fault must give at least three months’ written notice — and potentially longer depending on the tenant’s length of residence. Always verify the current statutory position with a qualified Hungarian lawyer before serving notice.

Utility and service charge arrangements

How utilities are handled is one of the most practically important — and most frequently disputed — sections of a Hungarian tenancy contract. There are two common arrangements in Budapest: the tenant contracts directly with the utility providers (gas, electricity, water, district heating), or the landlord retains the contracts and charges the tenant as part of an all-inclusive rent.

Direct contracting is cleaner for landlords. The tenant deals with E.ON (electricity and gas in much of Budapest), Budapest Waterworks (Fővárosi Vízművek), and the relevant district heating provider. The landlord has no exposure to unpaid bills. The contract should state that the tenant is responsible for transferring utility accounts into their name within a specified number of days of the tenancy start — 15 days is typical.

All-inclusive arrangements are more common in short-term and furnished rentals but do appear in long-term contracts. If you go this route, include a fair-use cap — a maximum monthly consumption above which the tenant pays the excess. Without a cap, a tenant who leaves windows open all winter creates a significant cost for the landlord.

Common charges (közös költség) for apartments in condominium buildings are almost always the landlord’s responsibility unless the contract explicitly transfers them to the tenant. These cover building maintenance, lift servicing, cleaning of common areas, and the building’s insurance. In a typical Budapest inner-city apartment, common charges range from around 10,000 to 30,000 HUF per month depending on the building’s age and amenities.

Budapest apartment building interior hallway showing communal area maintained by building management
Common charges cover shared spaces like hallways and lifts — clarify in the contract whether the landlord or tenant is responsible for these monthly costs.

Rent increases and indexation

Hungarian law does not impose rent controls on private residential lettings. Landlords are free to set the initial rent at market rate and to increase it, provided the contract permits this. Without a rent review clause, you cannot increase rent during a fixed-term contract. For open-ended contracts, a rent increase without a contractual basis requires the tenant’s written agreement or a new contract.

The most common approach in Budapest is an annual indexation clause tied to the Hungarian Central Statistical Office (KSH) consumer price index (CPI). The clause typically reads that rent will increase on each anniversary of the tenancy start date by the official CPI for the preceding calendar year. This is transparent, objective, and avoids annual renegotiation.

Some landlords, particularly those renting to expatriates or corporate tenants, denominate rent in euros and include a EUR/HUF exchange rate clause. This protects the landlord against forint depreciation. If you use this approach, be precise about which exchange rate applies (e.g., the Magyar Nemzeti Bank mid-rate on the last business day of the preceding month) and whether the tenant pays in forints at that rate or in euros directly.

Practical tips for landlords in Budapest

Budapest’s rental market varies significantly by district. In District V (Belváros-Lipótváros) and District VII (Erzsébetváros), demand from young professionals and foreign residents is strong, and landlords can typically let quality apartments quickly. In outer districts like District XVII or District XX, tenant turnover is lower but so is rent. Knowing your local market helps you set realistic rent, choose the right contract term, and anticipate the profile of tenant you are likely to attract.

Foreign nationals can legally rent in Hungary without restriction. If your tenant is a non-EU citizen, it is worth including a clause that makes the tenancy conditional on the tenant maintaining valid residency status. You should also register the tenancy with the local government office (okmányiroda) within 15 days of the tenant moving in — this is a legal obligation for landlords, not optional.

Tax on rental income in Hungary is straightforward for individuals: rental income is subject to personal income tax at a flat rate of 15%. Landlords can either deduct 10% of gross income as a deemed cost without receipts, or deduct actual documented costs (repairs, depreciation, management fees, insurance). Keeping receipts for everything is good practice regardless of which method you use. For landlords with multiple properties or those considering a more structured approach, Hungarian company setup for property may offer tax advantages worth exploring with an accountant.

If you are new to being a landlord in Budapest and want to ensure your purchase and first letting are handled correctly from the start, the safe property purchase legal service covers the acquisition side, while a property management arrangement can handle tenant sourcing, contract drafting, and ongoing management. You can also browse current Budapest property listings to understand what types of units are currently on the market.

For landlords who want to understand the broader investment context before committing to a long-term letting strategy, the why invest in Budapest overview covers the fundamentals of the market, including yield expectations and neighbourhood dynamics.

Frequently asked questions

Does a Hungarian tenancy contract need to be notarised?
No. A standard residential tenancy contract in Hungary does not need to be notarised to be valid. Both parties simply need to sign a written document. Notarisation is only relevant if you want the contract to have the same enforceability as a court judgment — for example, to allow direct enforcement of an eviction without a separate court proceeding. This is an option but not a requirement.
Can a landlord evict a tenant in Hungary without a court order?
No. Self-help eviction — changing locks, removing belongings, or cutting off utilities to force a tenant out — is illegal in Hungary regardless of the tenant’s conduct. If a tenant refuses to leave after a valid termination notice, the landlord must obtain a court order (kiürítési per) and then enforce it through a court bailiff. This process can take several months, which is why careful tenant selection matters.
Is it legal to rent to foreigners in Budapest?
Yes. There is no restriction on renting to foreign nationals in Hungary. Landlords are required to register the tenant’s address with the local government office within 15 days of the tenancy starting. For non-EU tenants, it is sensible to include a clause in the contract requiring the tenant to maintain valid residency documentation throughout the tenancy.
What happens if a tenant stops paying rent?
If a tenant falls into rent arrears, the landlord must first serve a formal written notice demanding payment within a reasonable period (typically 8–15 days). If the arrears are not cleared, the landlord can terminate the contract and initiate court proceedings for unpaid rent and possession. Keeping a written record of all communications and payment history is essential for any court claim.
Can rent be agreed in euros rather than Hungarian forints?
Yes. Hungarian law permits rent to be denominated in a foreign currency, including euros. The contract must specify the payment currency and the exchange rate mechanism if payment is made in forints. Many landlords renting to expatriate tenants in Budapest use euro-denominated contracts to reduce currency risk, particularly for higher-value properties in central districts.
How long can a fixed-term tenancy contract be in Hungary?
There is no statutory maximum duration for a fixed-term residential tenancy in Hungary. Contracts of one, two, or three years are common in Budapest. Longer fixed terms are less common in the private rental market but are not prohibited. A contract that automatically renews for a further fixed term unless notice is given is also permissible and widely used.
Does the landlord need to provide a habitable property?
Yes. Under the 1993 tenancy act, the landlord must hand over the property in a condition fit for its intended use and maintain it in that condition throughout the tenancy. Structural repairs, roof maintenance, and major system failures (heating, plumbing) are the landlord’s responsibility. Day-to-day maintenance and minor repairs are typically the tenant’s responsibility, but the contract should define this clearly.
What tax does a Budapest landlord pay on rental income?
Individual landlords in Hungary pay personal income tax at a flat rate of 15% on rental income. They can deduct either 10% of gross income as a deemed cost without receipts, or actual documented costs. Rental income must be declared in the annual personal income tax return. Landlords with multiple properties sometimes use a company structure for tax efficiency — an accountant familiar with Hungarian property tax can advise on the best approach.

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