Why Invest in Budapest?

As the capital of Hungary, Budapest dominates the Hungarian economy, attracting 60% of total foreign investment. Most major Hungarian Companies have their headquarters in Budapest and since joining the EU in 2004, accompanied with very generous tax breaks this has led to an influx of International companies setting up operations in Budapest.

Multi-national companies such as Microsoft, General Electric and Morgan Stanley have all recently opened offices and this led to an influx of business professionals requiring high quality modern housing.

Due to the older style property which requires modernisation, there is a lack of good quality new property available for rental. In the city centre areas, the demand for accommodation is high by these professional workers and there is a captive rental audience. New apartments represent the best value for money and some sources state that annual appreciation is on average 16% in Budapest and that rental yields reach on average 6%.

The cost of living and property prices are lower than other European capital cities.

Budapest tourism is growing and is one of the most popular city weekend breaks. The number of tourists in the last two years has increased by 1.5 million people, during the last two years.

Budapest is the hub of Hungary and the rest of Europe is easily accessible. More than fifty trains a day provide direct links between Budapest and no fewer than twenty five other capital cities.

Buying a Property in Budapest

On the purchase of a re-sale apartment you will have to pay a deposit upon signing the purchase contract - usually 10% of the total price, on that occasion your name is registered on the title sheet as a remark of intention to buy. Property prices vary, but a deposit of between 4,000€ to 8,000€ should be sufficient in most cases.

Upon payment of the balance of the purchase price your name will be registered on the title as the exclusive owner of the property. Properties are sold on a freehold basis. When investing in a new development, the registration will take place after the completion of the project.

Appointing a Lawyer
In an emerging market such as Hungary it is essential to work with an experienced lawyer to ensure your interests are taken care of. We work with selected partner agents who have offices in Budapest and are able to advise you of reputable English speaking Hungarian lawyers.

Finances
Mortgages of between 50% to 70% of the property value, are available to foreigner's dependant upon their circumstances.

Buying Process
There are two ways to buy Hungarian property as a foreigner, as a private individual or by setting up a company. In order to buy as an individual the buyer has to file a request for permission to the municipality of Budapest, the request will then be answered within 60 days.

The request will be approved if you wish to buy only one apartment. Should one wish to buy more than one apartment it is possible to either: Register the second apartment under the name of an associate or family member or establish a Hungarian BT company that can buy and sell properties with no restrictions.

To buy as a private individual you will need to:

•  Appoint a Hungarian legal representative and pay the initial deposit of Euro 1000 to 2000 per property

•  Go to a notary public and certify the buyer's identity to initiate the permit approval process. If the permit is refused (which is a remote possibility) establishing a company is the next suggested option - see below

•  The issue with the public notary can be done at any Hungarian embassy or consulate but opening hours vary the price abroad for this service is much higher then doing it locally. The costs associated with the procedure are approximately € 250.

•  The buy-sell agreement can be taken care of in your home country if time is an issue, whereby the agreement is signed by yourself and then couriered to your local legal representative

Setting up a company
Establishing a company in Hungary is a routine procedure, which can be completed within a day. The basic procedure is as follows:

•  The company's Articles of Association needs to be signed in front of a lawyer

•  The lawyer will also need the name of the new company, its seat, and the personal data of the owner(s). The founding capital of a limited liability Company is HUF 3m. Or Euro 12, 000 - this amount can be applied to the purchase of the property.

•  After the Articles of Association are prepared, specimens of signature need to be signed in front of a public notary, then a bank account must be opened.

•  Then all the documents, forms, authorizations and invoices must go to an accountant who will take care of all the administration and prepare the required reports.

Note: It is not required to be in Hungary in order to sign the Articles of Association; the procedure can be done at any Hungarian Embassy.

Summary of Costs
The costs associated with the purchase of Hungarian property are approximately 8% - 9% of the total purchase price.

Making an Offer
When the price and conditions of sale are agreed upon verbally, the next step is to have a Hungarian registered lawyer draft the sales - purchase agreement. In order to do this and ensure that the property is taken "off the market" the buyer should leave a booking deposit with the agent.

Important Points to Consider

•  Does the property have a good title? During 50 years of communism, title registration was often neglected and as a result is often out of date.

•  Is the property affected by debts?

•  In the case of new builds especially, has the building been constructed legally?

•  What taxes will be due when selling the property in future?

Getting There
Many low cost airlines now fly to Budapest from all over Europe and flying time from the UK is approximately 1 ¼ hours and 2 ¼ hours from Dublin. The recently completed €40 million (estimated) renovation of Ferihegy Airport's Terminal One has produced a terminal dedicated to low-cost airlines.

Getting Around
Public transport in the City is considered to be very efficient and meets Western standard and quality. Budapest's network of public transport services includes buses, trolleybuses, trams, underground trains and over ground suburban trains. As Budapest is the Capital of Hungary, all major highways and trains run through it providing excellent access to the rest of Europe.

Weather
Budapest has a temperate continental climate. Seasons are usually well defined with July and August the hottest months and December and January the coldest. Average sunshine from April to September is in excess of eight hours a day.

Capital
Budapest

Area
110 993 sq km

Population
Hungary 10 million

Budapest 1.8 million

Currency
The Hungarian currency is called the Forint (HUF)

Language
Hungarian is the country's only official language

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