Essential Hungarian Real Estate Laws and Regulations

Published on October 3, 2025 and written by Cyril Jarnias

Real estate investment in Hungary is attracting more and more foreigners, drawn by the opportunities offered by this dynamic market in the heart of Central Europe. However, before diving into purchasing property in Hungary, it’s crucial to thoroughly understand the legal and regulatory framework governing the real estate sector in this country. Here is a comprehensive overview of the main laws and regulations to know for confidently investing in Hungarian real estate.

Property Access for Foreigners: A Gradual Opening

Hungary has significantly relaxed its legislation regarding property acquisition by foreigners. Since joining the European Union in 2004, the country has progressively lifted restrictions for EU nationals. Today, EU citizens enjoy the same rights as Hungarians to purchase real estate, whether for primary residences, secondary homes, or rental investments.

For non-EU nationals, the situation is slightly more complex but remains favorable. They can acquire real estate in Hungary but must obtain prior authorization from the competent county administrative office. This procedure, although sometimes perceived as an additional administrative formality, primarily aims to ensure transaction transparency and prevent potential money laundering issues.

It’s important to note that some restrictions remain regarding the purchase of agricultural land by foreigners, a measure aimed at protecting the national agricultural heritage. However, these limitations generally don’t affect typical real estate investors interested in urban or residential properties.

Hungarian Real Estate Legal Framework: Essential Pillars

The Hungarian real estate market is governed by a set of laws and regulations aimed at overseeing transactions and protecting the rights of owners and tenants. Here are the main legal provisions to know:

• Hungarian Civil Code (2013): It forms the legal basis for all real estate transactions, defining the rights and obligations of parties involved in a sale or lease.

• Land Registry Act (1997): It governs the registration of properties and property rights, thus ensuring legal security for real estate transactions.

• Real Estate Agents and Property Managers Act (2015): This law regulates the activities of real estate professionals, imposing qualification and conduct standards to protect clients’ interests.

• Residential Lease Act (1993): It defines the rights and obligations of landlords and tenants, regulating lease conditions and eviction procedures.

These laws were designed to create a stable and transparent environment for real estate investments. They offer strong legal protection to owners while ensuring clear procedures for transactions and dispute resolution.

Real Estate Taxation in Hungary: An Attractive Regime for Investors

Hungarian real estate taxation is generally considered advantageous for investors, with relatively low tax rates compared to other European countries. Here are the main tax aspects to consider:

• Property Purchase Tax: It amounts to 4% of the property value, payable by the buyer. However, for residential properties valued under 15 million Hungarian forints (approximately €40,000), the rate is reduced to 2%.

• Rental Income Tax: Rental income is subject to income tax at a flat rate of 15%. Owners can deduct certain rental-related expenses, thereby reducing the taxable base.

• Property Tax: It varies by municipality and generally depends on the property’s size and location. Rates are typically moderate.

• Real Estate Capital Gains: Gains from property sales are taxed at 15%. However, this rate gradually decreases with the property holding period, leading to full exemption after 5 years of ownership.

The Hungarian tax system also offers interesting incentives for building renovation and energy improvement, with tax deductions for renovation and thermal insulation work.

Owner Rights and Protections: A Strong Legal Framework

Hungarian law provides strong protection for property rights, offering real estate investors a secure legal environment. Here are the main aspects to know:

• Title Guarantee: The Hungarian land registry system ensures high legal security, allowing owners to easily prove their property title.

• Eviction Rights: In case of non-payment of rent or lease contract violation, landlords have clear legal procedures to evict defaulting tenants. However, these procedures must follow precise steps defined by law.

• Contractual Freedom: Landlords enjoy significant freedom in negotiating lease contract terms, as long as they respect basic legal provisions.

• Protection Against Expropriation: The Hungarian constitution guarantees the right to private property. Although expropriation is possible for public interest reasons, it must be accompanied by fair and prior compensation.

These strong legal protections contribute to making Hungary an attractive destination for foreign real estate investors, offering a stable and predictable framework for their investments.

Recent Regulatory Developments: Towards Sector Modernization

The regulatory framework for real estate in Hungary continues to evolve to adapt to new market realities and international standards. Here are some recent or upcoming changes that deserve investors’ attention:

• Short-Term Rental Regulation: In response to the growth of platforms like Airbnb, new rules have been introduced to regulate short-term rentals, particularly in Budapest. These rules aim to balance the interests of property owners, local residents, and the traditional hotel sector.

• Strengthened Energy Standards: In line with European directives, Hungary has strengthened its requirements for building energy performance. Property owners are encouraged to improve their properties’ energy efficiency, with tax incentives available.

• Digitalization of Real Estate Procedures: The Hungarian government continues its efforts to modernize administrative procedures related to real estate, with an increasing trend toward digitalization of registration and declaration processes.

• Relaxation of Rules for Non-EU Investors: Discussions are underway to further simplify authorization procedures for non-European investors, aiming to attract more foreign investment in the real estate sector.

These developments demonstrate Hungary’s commitment to maintaining an attractive and modern environment for real estate investments, while adapting to new sector challenges.

Conclusion: An Attractive and Evolving Real Estate Market

The legal and regulatory framework for real estate in Hungary offers an overall favorable environment for foreign investors. With its simplified acquisition procedures, advantageous taxation, and strong legal protections, the country positions itself as an attractive destination for real estate investment in Central Europe.

However, as with any foreign investment, it’s crucial to thoroughly research and surround yourself with competent local professionals to effectively navigate the Hungarian regulatory landscape. Recent and upcoming developments in the legal framework reflect the positive dynamics of the sector, with a trend toward modernization and openness that should continue to attract international investors in the coming years.

Whether you’re considering acquiring a secondary residence, rental property, or commercial investment in Hungary, a thorough understanding of these laws and regulations will enable you to make informed decisions and maximize the potential of your real estate investment in this promising market.