Real Estate Succession Procedure in Hungary

Published on and written by Cyril Jarnias

Navigating Real Estate Inheritance in Hungary

Navigating the complex world of real estate inheritance in Hungary may seem like a daunting task, but a clear understanding of the complete procedure can transform this often intimidating process into a smooth and manageable operation.

Between complying with the country’s specific legal regulations and managing tax implications, each step requires careful attention to ensure a seamless property transfer.

From declaring assets to the competent authorities to equitable distribution among heirs, this article demystifies every crucial aspect of this delicate journey, offering practical advice and detailed explanations to guide readers through the often confusing maze of real estate inheritance in Hungary.

Key Steps in Hungarian Real Estate Inheritance

Legal Process for Opening the Inheritance

In Hungary, real estate inheritance proceedings automatically begin upon the property owner’s death. The municipality of the deceased’s last residence is notified and initiates the inheritance procedure to include all rightful claimants and interested parties in a single formal process.

Role of the Notary and Inheritance Certificate

After receiving the inheritance inventory prepared by the inventory officer (administrative agent appointed by the municipality), the file is forwarded to the competent public notary. The notary organizes an inheritance hearing where they examine the heirs’ rights, any existing wills, and then issues an official certificate recognizing the legal or testamentary heirs. This document is essential for any subsequent procedures related to real estate properties.

Property Inventory and Estate Valuation

  • The inventory includes:
    • Comprehensive list of real estate properties (addresses, plots)
    • Estimated value according to land registry or appraisal
    • List of movable assets (bank accounts, vehicles)
    • Any debts associated with the inheritance
  • Valuation: typically performed on an administrative basis; if heirs dispute an estimate, an expert may be appointed.
StepMain ActorAverage TimeframeDocuments Generated
Death NotificationMunicipalityImmediateDeath Certificate
InventoryInventory Officer2 to 6 weeksInheritance Inventory
Notarial HearingPublic NotaryWithin two monthsInheritance Certificate
Title TransferNotary/Land RegistryUp to six monthsProperty Ownership Certificate

Required Administrative Procedures

  • Property Transfer:
    • Submission of certificate to land registry office.
    • Official update in property register.
    • Payment of administrative fees related to transfer.
  • Tax Formalities:
    • Declaration to local tax authorities.
    • Possible payment of inheritance taxes or capital gains tax if quick resale after inheritance.

Practical example:
An apartment located in Budapest is part of the inheritance. After the municipal officer completes the inventory and forwards it to the local notary office, a hearing brings together the three adult children designated as legal heirs. The notary issues their certificate after verifying no conflicting will exists. The children submit this certificate to the land registry, which updates the property title under their names – total timeframe: approximately four months without disputes.

Estimated Timeframes for Each Step

  • Notification and inventory: few days to six weeks
  • Notarial procedure: usually finalized within two-three months
  • Land registry transfer/tax matters: up to six months

Heirs’ Rights and Obligations

  • Rights:
    • Accept or refuse inheritance
    • Request equitable division in case of multiple claimants
  • Obligations:
    • Jointly liable for debts related to inherited properties within the limits of received assets

Special foreign case:
If Hungarian property belongs to a French deceased residing in France but no procedure was initiated in France before opening in Hungary, Hungarian law generally applies to this specific property; exclusive local jurisdiction applies unless international agreement states otherwise.

Summary List – Key Steps

  • Automatic opening following death
  • Comprehensive inventory by municipal administration
  • Transfer of complete file to competent notary office
  • Inheritance hearing with formal identification of claimants
  • Official issuance of inheritance certificate
  • Legal transfer at land registry/property register
  • Mandatory tax declaration

All these steps are legally regulated so each party can exercise their rights while respecting obligations toward both the State and potential creditors attached to transferred properties.

Good to Know:

In Hungary, real estate inheritance begins with the legal opening of the succession where a notary is appointed to oversee property transfer. They issue an essential inheritance certificate to prove heir legitimacy in the procedure. Precise inventory and official estate valuation must be conducted to identify all deceased’s assets. Heirs must then complete administrative formalities such as property transfer before land registry authorities and ensure compliance with tax obligations, including inheritance taxes that may vary depending on property value and family relationship. The procedure can extend over several months, even more than a year, depending on estate complexity and potential disputes among heirs. It’s crucial that heirs understand their rights, such as possible inheritance refusal to avoid debts, and their obligations, like settling inheritance taxes if applicable. A practical example would be a family accelerating the process by preparing necessary documents in advance and consulting a tax expert to optimize their situation, demonstrating the importance of anticipation in this complex procedure.

Understanding Inheritance Rights for Foreigners in Hungary

The legal framework for inheritance rights for foreigners owning real estate in Hungary is based on a combination of Hungarian national legislation, private international law, and European Regulation No. 650/2012 concerning cross-border successions.

General Applicable Principles:

  • The law applicable to inheritance is, by default, that of the State where the deceased had their habitual residence at time of death.
  • It’s possible to choose the law of one’s nationality through a will (Professio Juris).
  • The Hungarian public notary may have jurisdiction whenever the real estate is located in Hungary or if the deceased was a Hungarian citizen at time of death.
  • The principle of succession unity applies: all properties located in Hungary fall under the same procedure, unless otherwise stipulated by bilateral agreement.
SituationApplicable LawCompetent Authority
Foreign resident with property in HungaryLaw of last habitual residence country or national law (if professio juris)Hungarian notary for properties located in Hungary
Non-resident foreigner with property only in HungaryOften foreign law but procedure conducted by Hungarian notaryHungarian notary

Differences Between Residents and Non-Residents:

  • Non-residents may have their inheritance subject to foreign law if designated; otherwise the law of last residence generally prevails.
  • For foreign tax residents: only real estate properties located on Hungarian territory are subject to local taxation.

Bilateral Agreements and International Conventions:

International agreements can modify these principles; they may notably provide for exclusive or shared jurisdiction. In case of dispute over competent authority (Hungary vs. third country), an agreement will determine which jurisdiction prevails.

Inheritance Taxation:

In Hungary:

  • Standard tax rate: 18% on built properties/residences and adjacent land; 9% for other properties.
  • Frequent exemptions
    • Direct heirs (children, spouses) are generally exempt from inheritance taxes on real estate properties.
    • Other heirs pay according to their degree of relationship and nature of received property.
  • Taxation varies depending on whether a tax treaty exists between Hungary and the country of origin aimed at avoiding double taxation.
Type of HeirApplied RatePossible Exemptions
Direct descendantsGenerally 0%Yes
SpousesGenerally 0%Yes
Other heirsUp to 18%According to degree & conventions

Specific Administrative Steps for Foreign Heirs:

  1. Declaration to local public notary who officially opens inheritance procedure.
  2. Mandatory notification to foreign consular authorities if deceased was non-Hungarian citizen.
  3. Presentation of documents proving identity, family relationship/inheritance (inheritance certificate or will), certified translation required for any foreign document.
  4. Possible waiting for results related to application of chosen foreign law via professio juris before effective liquidation/distribution of assets.
  5. Possible payment of due tax duties to Hungarian tax authorities before effective transfer of property title.

Available Specialized Services:

Bilingual legal firms frequently assist with:

  • Sworn translation
  • Coordination with local notaries
  • Representation before tax administrations
  • Personalized advice according to international conventions

Common Examples:

A French national owning an apartment in Budapest dies while still residing in France.
Their family can choose for their inheritance to be governed by French law through a will (professio juris). However, the local public notary will manage all matters related to formal transfer registered in local land registries after tax verification.

A German expatriate having lived several years in Hungary leaves a house there.
The procedure will be processed before a local notary office according to their final resident status; their children will inherit without fees if they are direct descendants – even if living outside EU – but must provide all translated proofs justifying their legal status both as German citizens and as legal heirs recognized by applied German civil law via professio juris.

Good to Know:

In Hungary, inheritance rights for foreigners vary depending on their residence status and existing bilateral agreements. Foreign residents benefit from the same inheritance tax rates as nationals, often reduced or exempted for direct heirs, while non-residents may be subject to higher rates. Agreements between Hungary and other countries, such as those of the EU, can influence these rights by avoiding double taxation. Foreign heirs must follow rigorous administrative steps, including inheritance declaration to Hungarian tax administration and inheritance certification via local notary. Consulting specialized legal services is advised, offering valuable assistance particularly in complex cases involving multiple jurisdictions. For example, a US resident inheriting a house in Hungary might benefit from the tax agreement between the two countries, reducing the burden on their assets, unlike a resident from a country without favorable bilateral agreement.

The Notary’s Role in International Inheritance in Hungary

The Hungarian notary plays a central and indispensable role in settling international inheritances, acting both as guarantor of legality and mediator among heirs with diverse profiles. Their mission begins with close collaboration with heirs and legal representatives to identify, inventory, and evaluate all deceased’s assets, including those located abroad. The notary notably consults national registers (wills, inheritance contracts) to ensure testator’s wishes are respected.

List of Notary’s Main Tasks in International Inheritance in Hungary:

  • Complete identification of inheritance assets (movable, immovable properties in Hungary and abroad).
  • Mandatory consultation of national will registry.
  • Notification to concerned foreign authorities when deceased had another nationality or owned properties outside Hungary.
  • Legal assessment of applicable law according to deceased’s domicile or habitual residence.
  • Coordination with foreign jurisdictions to verify possible existence of parallel procedures.

Required Legal Competencies:

  • Thorough mastery of Hungarian private international law.
  • Expert knowledge of European inheritance legislation, particularly EU Regulation (EU) No. 650/2012 harmonizing certain cross-border aspects within European Union.
  • Ability to interpret bilateral conventions (e.g., Franco-Hungarian Convention dispensing legalization).

Summary Table: Inter-Jurisdictional Coordination

SituationNotary’s ActionApplicable Law
Properties only in HungaryLocal procedureHungarian law
Properties in multiple EU countriesContact with foreign authorities; harmonizationEU Regulation No. 650/2012 + local laws
Procedures initiated abroadSuspension or adaptation of Hungarian procedureAccording to international agreements

In this complex context, the notary also ensures rigorous validation of foreign documents. They verify their formal compliance according to various criteria: Hungarian national law, internal law where document was drafted, testator’s national or domiciliary law — while considering international agreements that may waive certain administrative formalities.

In Case of Potential Conflicts Among Heirs from Different Jurisdictions:

The notary’s mediator role is highlighted:

  • Facilitation of fair dialogue among international parties
  • Transparent explanation of applicable rights
  • Proposal of amicable alternatives before judicial recourse

Final responsibility falls on the notary regarding equitable distribution of assets: they must strictly respect both national legislation and relevant European/bilateral provisions to avoid any discrimination or legal violation. In case of serious dispute unresolved by notarial mediation, it falls to the competent judge to handle contentious matters.

Required competencies therefore extend well beyond local law: they include intercultural know-how, European technical mastery, and organizational capacity to ensure settlement compliant with complex transnational requirements.

Good to Know:

In Hungary, the notary plays an essential role in international inheritances, positioning themselves as an expert in European inheritance legislation. They collaborate with heirs and legal representatives to inventory all deceased’s assets, including those located abroad, and possess deep knowledge of international law, which is crucial when facing assets scattered across different EU countries. The notary ensures coordination with other European jurisdictions to harmonize procedures and verify appropriate laws are respected. They also handle validation of foreign legal documents, resolving possible conflicts of laws and serving as mediator in case of international disputes among heirs. Their responsibility includes guaranteeing equitable asset distribution, applying Hungarian legislation and considering bilateral treaties if necessary, thus providing unwavering legal security to involved parties.

Tips for Anticipating Cross-Border Real Estate Transfer

To anticipate cross-border real estate transfer within Hungarian inheritance framework, it’s essential to understand local legal framework specifics, tax implications, and mechanisms for optimizing inheritance management.

Hungarian Laws and Regulations on Real Estate Inheritance

  • The Hungarian Civil Code regulates property transfer and precisely defines heirs’ rights.
  • Hungary applies the succession ipso iure principle, where heir automatically receives property at moment of death.
  • The surviving spouse generally obtains life usufruct on common residence and a “child’s share” equivalent to legal descendants’ portions.
  • Unregistered cohabitants don’t automatically benefit from inheritance rights; only married or registered partners are protected by law.

Tax Implications and Double Taxation

Generally, children (and direct line relatives) are exempt from inheritance taxes on Hungarian residential real estate.

For other heirs, a standard tax rate may apply (e.g., 18% for certain properties).

Heir Inheritance Rights
Children/descendants Exempt
Spouse Usufruct + child’s share
Heirs outside direct line Standard rate (e.g., 18%)

Tax matters fall exclusively under Hungarian national law; they’re not covered by European inheritance regulation. Thus, one must consider:

  • Local legislation
  • Possible bilateral treaties aimed at avoiding double taxation
  • Possibility that certain rental income from inheritance may be taxable in multiple countries

Bilateral Treaties Influencing the Procedure

Certain international agreements between Hungary and other States may determine which jurisdiction is competent to handle part or all of real estate inheritance. This can affect:

  • Application of foreign inheritance rules if stipulated by treaty
  • Mutual recognition of inheritance decisions

Essential Recommendations

Practical list:

  • Systematically consult a local legal expert specialized in international inheritances, to:
    • Clarify which national law applies according to your family situation
    • Anticipate any risk related to exclusive/unitary jurisdiction of Hungarian public notary
  • Engage an international tax advisor, who can:
    • Assess potential impact of double taxation
    • Propose adapted structure to limit these effects

Structures Facilitating Cross-Border Transfer

Various setups allow optimization or securing of this transfer:

Structured list:

  • Local or international real estate company (to group multiple heirs)
  • Foreign trusts recognized in certain cases
  • Marriage contract adapted to international inheritances

Each presents advantages for limiting potential disputes among heirs.

Preventive Strategies Against Litigation Risk

Targeted list:

  • Draft a will compliant with Hungarian law but also recognized in your country of origin
  • Prefer official registration with electronic land registry
  • Anticipate any contestation via specific clauses (e.g., previously negotiated penalty clause)

Proactive planning remains indispensable to:

  • Reduce unexpected tax costs,
  • Ensure transparent distribution,
  • Simplify all administrative procedures for your heirs.

Good to Know:

During cross-border real estate transfer in Hungary, it’s crucial to know local laws, which impose strict rules for inheritance and property transfer to non-residents, often influenced by bilateral treaties that can modify tax effects. Wise advice is to consult legal and tax experts specialized in cross-border properties to navigate complexity of tax implications, including double taxation. Ownership structures like holding companies can facilitate this process, and strategies such as clarifying property rights and drafting an international will help minimize litigation risks. Proactive inheritance planning is essential to anticipate potential costs, thus simplifying inheritance process for heirs and ensuring more harmonious transition.

Disclaimer: The information provided on this website is for informational purposes only and does not constitute financial, legal, or professional advice. We encourage you to consult qualified experts before making any investment, real estate, or expatriation decisions. Although we strive to maintain up-to-date and accurate information, we do not guarantee the completeness, accuracy, or timeliness of the proposed content. As investment and expatriation involve risks, we disclaim any liability for potential losses or damages arising from the use of this site. Your use of this site confirms your acceptance of these terms and your understanding of the associated risks.

About the author
Cyril Jarnias

Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.

On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.

Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.

Find me on social media:
  • LinkedIn
  • Twitter
  • YouTube
Our guides: