Property Purchase Costs in Budapest for Foreigners: Taxes and Fees Breakdown
Foreign buyers in Budapest should budget roughly 5% to 8% of the purchase price in additional costs. The main items are a 4% property transfer tax (illeték), legal fees of about 1% to 1.5%, a land registry fee, and an approximately HUF 50,000 acquisition permit for non-EU citizens. New-build apartments carry 5% VAT inside the headline price, and agent commission is normally paid by the seller.
What you actually pay on top of the purchase price
The headline figure on a Budapest listing is rarely the final number a buyer transfers. On a typical resale apartment in Pest, the closing costs add up to about five to eight percent of the agreed price. On a brand-new development the picture shifts because value added tax is already baked into the asking price, but acquisition permits, legal work and registration still apply.
The major cost lines are the property transfer tax paid to the Hungarian tax authority (NAV), the lawyer’s fee, the land registry recording fee, and for non-EU buyers the acquisition permit issued by the relevant government office. Mortgage borrowers add bank arrangement, valuation and notarial deed costs on top.
One detail trips up almost every first-time foreign buyer: in Hungary the buyer does not pay the estate agent. Commission is paid by the seller, and it is built into the listing price. That is one of the few areas where the Hungarian system is cheaper for a buyer than London, Paris or Dubai.
Property transfer tax (illeték) explained
The property transfer tax, known locally as visszterhes vagyonátruházási illeték, is the single largest closing cost. It is charged at 4% on the property value up to HUF 1 billion, and 2% on the portion above that ceiling. For almost every apartment a foreigner buys in Budapest, the effective rate is a flat 4%.
The tax is assessed by NAV after the sales contract is filed and is usually payable within 30 days of the assessment letter. Buyers under 35 purchasing their first home below a defined value threshold can qualify for a 50% discount, and buyers replacing one home with another within three years can have the tax base reduced by the difference in value. These reliefs are rarely available to non-resident foreign investors, but they matter for relocating expatriates.
On a HUF 80 million apartment, the 4% transfer tax alone is HUF 3.2 million — by far the biggest single cheque a buyer writes after the deposit.
VAT on new-build apartments
Hungary applies a reduced 5% VAT rate on the sale of new residential apartments under 150 m² and detached houses under 300 m². The Hungarian government extended this reduced rate so it continues to apply through the end of 2026, and a transitional rule allows it to keep applying for certain projects with valid building permits even after that date. In practice every advertised price for a new-build apartment in Budapest already includes this VAT — you do not pay it on top.
Crucially, when you buy a new home from a developer, you do not pay the 4% transfer tax in addition to VAT, in most cases. New apartments sold for under a defined price ceiling are exempt from the illeték, with a partial exemption applying above that ceiling. This is one reason new developments in Budapest apartment sales sometimes pencil out cheaper at closing than a comparable resale flat.
Resale apartments — anything that has already been lived in or has an occupancy certificate older than two years — are sold without VAT, and the 4% transfer tax applies normally.
Legal fees and the role of the ügyvéd
Hungarian law requires every real-estate transaction to be drafted and counter-signed by a Hungarian attorney (ügyvéd). There is no equivalent of a US-style title company. The same lawyer typically prepares the sales contract, runs the land registry check, files the transfer with the registry, handles the acquisition permit application if needed, and holds the deposit in a client account.
Fees usually range from 1% to 1.5% of the purchase price plus 27% VAT, with a typical floor around HUF 250,000–400,000 for low-value flats. Some firms charge a flat fee for straightforward resale purchases. Always confirm in writing whether the quote includes the land registry filing fee (HUF 6,600 per property), translation of the contract into English, and the legal opinion on title.
- Lawyer’s fee: 1%–1.5% + 27% VAT
- Land registry recording fee: HUF 6,600 per property
- Energy performance certificate: HUF 20,000–40,000 (seller’s obligation in practice)
- Certified English translation of the contract: HUF 50,000–150,000 if required
Foreigner acquisition permit and notary costs
Citizens of the European Union, the European Economic Area and Switzerland buy Hungarian residential property on the same terms as Hungarian citizens. Citizens of other countries — including the United Kingdom since Brexit, the United States, China, Israel, the UAE and most of Asia — need an acquisition permit from the competent government office (kormányhivatal) of the district where the property is located.
The administrative fee is currently HUF 50,000 per permit application, paid to the government office. Processing typically takes 30–90 days, and the application is usually handled by the buyer’s lawyer. The permit is granted in almost all cases for standard residential apartments; agricultural land and protected areas follow a different and much more restrictive regime.
If you are taking out a mortgage, you will also pay a Hungarian notary (közjegyző) to issue an enforceable security deed. Notary fees are set by a national scale and on a typical mortgage of HUF 30–50 million they normally fall between HUF 80,000 and HUF 200,000.
Agent commission, mortgage and bank charges
Estate agent commission in Budapest is paid by the seller and ranges from 2% to 5% plus VAT, depending on the agency and the type of property. A buyer engaging a buyer’s agent will pay that agent separately, but this remains uncommon. For mortgage borrowers, the bank side adds a layer of fixed and percentage-based costs that should not be overlooked.
Worked example: buying a 75 m² flat in District VII
Take a realistic case. A British buyer purchases a renovated 75 m² resale apartment in Erzsébetváros (District VII) for HUF 95,000,000, paid in cash. Because the buyer is non-EU after Brexit, a foreigner acquisition permit is required. The lawyer charges 1% plus VAT.
- Purchase price: HUF 95,000,000
- Transfer tax (4%): HUF 3,800,000
- Lawyer’s fee (1% + 27% VAT): HUF 1,206,500
- Land registry fee: HUF 6,600
- Acquisition permit: HUF 50,000
- Certified translation: ~HUF 100,000
- Total closing costs: ~HUF 5,163,100 (about 5.4% of the price)
Compare that with a new-build apartment of the same size in a development in Ferencváros (District IX) listed at HUF 110,000,000 with 5% VAT included. Here the buyer typically avoids the 4% transfer tax (subject to the price ceiling rules for the exemption), so the same buyer’s all-in additional cost falls closer to 2% of the headline price — meaningful savings that should be factored into any new-versus-resale decision. For context on why investors keep choosing the city, see our overview of why invest in Budapest.
How to keep costs down legally
There is no way to avoid the 4% transfer tax on a normal resale purchase, but a handful of approaches reduce the total bill or shift the cash flow. Each one requires planning before the sales contract is signed — once filed with the registry, the deal is essentially locked in.
First, if you are buying a new-build under the price ceiling, you may qualify for the illeték exemption, saving the entire 4%. Second, EU citizens relocating to Hungary who sell a previous Hungarian property within three years before or after the new purchase can have the tax base reduced by the value difference. Third, foreign investors building a portfolio sometimes use a Hungarian limited company (Kft.) — useful for VAT reclaim on commercial property and for separating personal and rental income, though it adds annual accounting costs. We outline the trade-offs in our Buying Guide Budapest articles.
Frequently asked questions
- Do foreigners pay higher property taxes in Budapest than Hungarians?
- No. The 4% property transfer tax rate is identical for Hungarian citizens, EU citizens and non-EU foreign buyers. The only additional cost specific to non-EU buyers is the acquisition permit fee of approximately HUF 50,000. Annual property tax in Budapest residential districts is generally not levied on owner-occupied apartments, though some districts charge a small communal tax. Local rules vary by district, so confirm with the relevant district mayor’s office (önkormányzat).
- Is the 5% VAT on new builds extended beyond 2026?
- The Hungarian government has extended the reduced 5% VAT rate on new residential properties through the end of 2026, with transitional rules allowing the rate to continue applying to projects that have valid building permits in place by a defined cut-off date. The standard Hungarian VAT rate is 27%, so this remains a significant saving on new construction. Always check the current rules with your lawyer before committing.
- How long does the foreigner acquisition permit take?
- For standard residential apartments in Budapest, the kormányhivatal usually issues the acquisition permit within 30 to 90 days of a complete application. The lawyer typically files the application immediately after the sales contract is signed, and the contract is structured so that title passes only once the permit is granted. Deposits sit in the lawyer’s escrow account during this waiting period. Refusals are very rare for normal residential purchases.
- Can I buy a Budapest apartment through a Hungarian company?
- Yes. Many foreign investors hold Budapest investment property through a Hungarian limited company (Korlátolt felelősségű társaság, or Kft.). This structure can simplify VAT recovery on commercial property purchases, separate personal liability, and streamline rental income taxation. It adds annual costs of roughly HUF 300,000–600,000 in accounting and corporate compliance, so it usually only makes sense above a certain portfolio size. Discuss the structure with a Hungarian tax advisor before incorporating.
- Who pays the estate agent in a Budapest transaction?
- In Hungary, the estate agent commission is paid by the seller, not the buyer. Commission rates typically range from 2% to 5% of the sale price plus 27% VAT, and the commission is built into the asking price. A buyer engaging a dedicated buyer’s agent will pay that agent separately under a private mandate, but this is far less common in Budapest than in London or New York.
- Are there ongoing annual costs after I buy?
- Yes. Apartment owners pay monthly building service charges (közös költség), typically HUF 15,000–40,000 per month depending on building age, lift, doorman and shared services. Utilities are billed separately by consumption. Building insurance is normally bundled into the közös költség, but contents insurance is the owner’s responsibility. Owner-occupied apartments are generally exempt from annual municipal property tax in Budapest, but rules vary by district.