Foreign landlords renting out a Budapest apartment pay Hungarian personal income tax at a flat 15% rate on net rental income. You can deduct either actual documented costs or a statutory 10% cost allowance. A separate flat-rate tax (átalányadó) is available for furnished short-term lets operated as a sole trader. Social contribution tax may also apply depending on your residency and treaty status.
Who pays rental income tax in Hungary
Hungary taxes rental income on a source basis. If the property is located in Hungary, the income is Hungarian-source income — regardless of whether the landlord is a Hungarian tax resident or a non-resident foreigner. A German citizen owning a flat in the 7th district, a British national with a studio in Ferencváros, and an American investor with a portfolio in Újlipótváros all fall under Hungarian tax rules for that income.
Non-residents are generally taxed only on their Hungarian-source income, not on their worldwide income. That distinction matters: you will file a Hungarian personal income tax return (or have one filed on your behalf) covering only what the Budapest property earns, not your salary or savings back home.
If you are a Hungarian tax resident — meaning Hungary is your centre of vital interests or you spend more than 183 days per year here — the rules are the same for rental income, but your overall filing obligations are broader. Most foreign landlords who do not live in Hungary are non-residents for tax purposes.
The 15% flat personal income tax rate
Hungary applies a single flat personal income tax (személyi jövedelemadó, or SZJA) rate of 15% to rental income. This rate has been stable for several years and applies equally to residents and non-residents on their Hungarian-source rental earnings. There is no progressive bracket, no higher rate for larger incomes, and no separate capital gains rate for rental profits — it is simply 15% of the taxable base.
The taxable base is your gross rental receipts minus allowable deductions (covered in the next section). If your Budapest apartment generates HUF 3,600,000 in annual rent and your deductible costs total HUF 360,000, your taxable base is HUF 3,240,000 and your SZJA bill is HUF 486,000 — roughly 13.5% of gross rent in this example.
Hungary’s 15% flat income tax rate is one of the lowest personal tax rates on rental income in the European Union, which is a meaningful factor when comparing Budapest with other EU property markets.
The 15% rate applies whether you rent to a long-term tenant under a standard Hungarian lease, to a corporate tenant (common for expat housing), or to short-term guests through platforms such as Airbnb or Booking.com — though short-term lets have additional registration and potentially different tax treatment options described below.
Deducting costs: actual expenses vs the 10% allowance
Hungarian tax law gives individual landlords two methods for calculating deductible costs against rental income. You choose one method per tax year; you cannot mix them.
Method 1 — Actual documented costs. You deduct real, receipted expenses directly related to the rental activity. These include maintenance and repair costs, property management fees, building insurance, communal charges (közös költség), and depreciation on furnishings. Depreciation on the building structure itself is not deductible for individuals who own the property privately (as opposed to through a company). You must keep all invoices and receipts; the Hungarian tax authority (Nemzeti Adó- és Vámhivatal, NAV) can request them during an audit.
Method 2 — Statutory 10% cost allowance. If your actual costs are low or you prefer simplicity, you can deduct a flat 10% of gross rental receipts without any documentation. This is the default option many landlords use for unfurnished long-term lets where running costs are minimal. It is straightforward but may understate your real costs if you have a managed or furnished property.
For a furnished apartment in central Budapest — say, a renovated two-bedroom in District 5 renting at HUF 350,000 per month — actual costs could easily exceed 10% once you account for property management, periodic maintenance, and platform fees. In that case, keeping receipts and using Method 1 is worth the administrative effort. For a bare long-term let where the tenant pays utilities and the building’s communal charges are modest, the 10% allowance is usually sufficient.
Flat-rate tax for furnished and short-term rentals
Hungary has a specific tax category for private accommodation providers (magánszálláshely-szolgáltatók) — essentially anyone renting out a furnished room or apartment to tourists or short-term guests. To operate legally in this category, you must register with the local municipality and obtain a registration number. In Budapest, this also means complying with the city’s short-term rental rules, which have tightened in recent years.
Once registered, you have the option to pay a fixed annual tax per room rather than 15% SZJA on net income. As of 2026, the fixed tax for a private accommodation provider is set by local government within a range defined by national law — in Budapest it has historically been around HUF 38,400 per room per year, though the exact figure can vary by district. This flat-tax option (tételes átalányadó) is attractive only if your rental income per room is relatively high, because the fixed amount does not scale with income.
Alternatively, short-term rental operators can elect the sole-trader flat-rate tax (átalányadó) regime, which taxes a deemed profit margin at 15% SZJA. Under this approach, 40% of gross receipts is treated as taxable income (60% is deemed costs), and you pay 15% on that 40%. The effective rate on gross income is therefore 6%. However, this requires registering as a sole trader (egyéni vállalkozó) in Hungary, which brings its own administrative obligations and social contribution tax exposure.
Social contribution tax and double-taxation treaties
Beyond income tax, Hungary levies a social contribution tax (szociális hozzájárulási adó, or szocho) at 13% on certain income types. For rental income earned by a private individual who is not operating as a sole trader, szocho does not apply — only the 15% SZJA applies. This is an important distinction: passive rental income from a privately owned apartment is not subject to szocho.
If you operate as a sole trader or through a registered business form, szocho can apply to the income drawn from that entity, which is why the choice of structure matters. For most foreign landlords with one or two Budapest apartments rented on long-term leases, the private individual route (15% SZJA only, no szocho) is the simplest and often the most tax-efficient path.
Hungary has double-taxation treaties (DTTs) with most EU member states, the United Kingdom, the United States, Canada, and many other countries. These treaties generally assign the right to tax real-property rental income to the country where the property is located — meaning Hungary taxes it first, and your home country either exempts it or gives a credit for the Hungarian tax paid. You should verify the specific treaty between Hungary and your country of residence with a qualified tax adviser, as the credit mechanism varies.
Filing and paying: deadlines and practicalities
Hungarian personal income tax returns cover the calendar year (January–December) and must be filed by 20 May of the following year. For the 2025 tax year, the deadline is 20 May 2026. NAV (the Hungarian tax authority) pre-fills returns for Hungarian tax residents using data it already holds, but non-residents generally need to file a paper or electronic return manually, or appoint a tax representative in Hungary.
Quarterly advance payments are required if your expected annual tax liability exceeds a threshold set by NAV. In practice, many foreign landlords with a single rental property find their annual liability falls below the threshold for mandatory quarterly payments, but this should be confirmed each year. If you use a Hungarian accountant or tax representative — which is strongly recommended for non-residents — they will handle the advance payment calculation and the annual filing.
- Tax year: 1 January – 31 December
- Annual return deadline: 20 May of the following year
- Tax authority: Nemzeti Adó- és Vámhivatal (NAV)
- Payment currency: Hungarian Forint (HUF)
- Non-residents may appoint a fiscal representative in Hungary
- Rental income must be declared even if the tenant is a foreign company paying in euros
Landlords who rent to a legal entity (a company rather than an individual) should note that the paying company is required to withhold and remit the 15% tax on your behalf if you are a private individual — this is an automatic withholding mechanism, not an optional arrangement. If your tenant is a private person, you are responsible for declaring and paying the tax yourself.
Buying through a Hungarian company instead
Some foreign investors choose to hold their Budapest property through a Hungarian limited liability company (Kft.) rather than as a private individual. The corporate income tax (CIT) rate in Hungary is 9% — the lowest in the EU — which is lower than the 15% SZJA on individual rental income. However, extracting profits from the Kft. as dividends triggers an additional 15% SZJA on the dividend, plus 13% szocho up to a cap, so the combined effective rate on distributed profits is higher than 9%.
The corporate route makes most sense when profits are retained and reinvested (for example, to buy additional properties), when the investor is building a portfolio of several units, or when the structure offers VAT recovery on a significant renovation. It also provides liability separation. For a single buy-to-let apartment, the private individual route is usually simpler and the tax difference is modest.
If you are considering a company structure, our Hungarian company setup service for property covers the incorporation process and the tax implications in detail. The decision should always be made with a Hungarian tax adviser who can model your specific numbers.
For investors thinking about the broader investment case for Budapest — yields, capital appreciation trends, and the regulatory environment — our why invest in Budapest page provides context that goes beyond the tax question.
Comparison: tax treatment options at a glance
The table below summarises the main tax treatment options available to a foreign landlord renting out a Budapest apartment in 2026. It assumes the landlord is a non-resident private individual unless stated otherwise.
For most foreign landlords with one or two Budapest apartments on long-term leases, the 15% SZJA route — either with the 10% statutory deduction or with actual costs — is the most practical choice. The corporate route becomes worth modelling seriously once you are managing three or more units or undertaking significant capital expenditure.
If you are still at the stage of choosing which property to buy, browsing current Budapest property listings alongside the tax numbers gives a clearer picture of realistic net yields. And if you want legal support through the purchase itself, our safe property purchase legal service covers the due diligence and conveyancing steps that protect foreign buyers.
Frequently asked questions
- Do I need a Hungarian tax number to rent out my Budapest apartment?
- Yes. Non-resident landlords must obtain a Hungarian tax identification number (adóazonosító jel) from NAV before declaring rental income. Your Hungarian lawyer or accountant can apply for this on your behalf. Without it, you cannot file a return or pay tax correctly, and the withholding mechanism for corporate tenants will not function properly.
- Can I deduct mortgage interest on my Budapest property?
- Hungarian tax law does not allow private individual landlords to deduct mortgage interest as a rental cost. Mortgage interest is not listed among the allowable actual costs under the SZJA rules. This differs from the treatment in some other countries and is a meaningful consideration when comparing financing structures. A Hungarian Kft. can deduct interest as a business expense, subject to thin-capitalisation rules.
- What happens if my home country also taxes my Budapest rental income?
- Most double-taxation treaties between Hungary and other countries assign primary taxing rights over real-property rental income to Hungary. Your home country will typically either exempt the income or grant a credit for the Hungarian tax paid. You should declare the income in both countries and claim the relevant relief. The exact mechanism depends on the specific treaty — consult a tax adviser in your country of residence.
- Is Airbnb rental income treated differently from long-term rental income in Hungary?
- The 15% SZJA rate applies to both. However, short-term furnished lets require municipal registration as a private accommodation provider and may qualify for the fixed room tax or the sole trader flat-rate regime. Budapest has also introduced local restrictions on short-term rentals in some districts, so compliance involves both tax and licensing considerations beyond the national tax rules.
- Do I pay VAT on rental income in Hungary?
- Residential rental income is VAT-exempt in Hungary for private individuals and for companies renting to private tenants for residential use. If you rent a property for commercial use (offices, retail), VAT rules are different and you may need to register for VAT. Most foreign landlords renting Budapest apartments for residential purposes do not have a VAT obligation on the rental income itself.
- What is the penalty for not declaring rental income in Hungary?
- NAV can assess unpaid tax plus late-payment interest (currently calculated at the central bank base rate plus 5 percentage points per year) and a default surcharge of up to 50% of the unpaid tax in cases of negligence. Deliberate concealment can attract higher penalties. Voluntary disclosure before an audit significantly reduces the penalty. The statute of limitations is generally five years from the end of the tax year in question.
- Can a foreign landlord use a Hungarian accountant to handle all filings remotely?
- Yes, and this is the standard arrangement for non-resident landlords. A Hungarian registered accountant (könyvelő) or tax adviser can hold a power of attorney to file returns, communicate with NAV, and manage advance payments on your behalf. You do not need to be physically present in Hungary to meet your tax obligations, provided your representative has the necessary authorisation.
- Does the 15% tax rate apply to rental income from commercial property in Budapest too?
- For private individuals, yes — the 15% SZJA rate applies to rental income from commercial property as well as residential. However, commercial property rental has different VAT implications and is more commonly held through a corporate structure. If you are considering commercial property in Budapest, the tax and structuring questions are worth reviewing separately from residential rental income.
Sources
- Nemzeti Adó- és Vámhivatal (NAV) — Hungarian Tax and Customs Administration
- Act CXVII of 1995 on Personal Income Tax (SZJA törvény) — Hungarian Legal Database
- OECD Model Tax Convention on Income and Capital — OECD
- Hungary — Individual Tax Summary, PwC Worldwide Tax Summaries
- Corporate Tax Rates in the EU — European Commission