Buying or selling real estate in Hungary: minimizing risk and choosing a reliable lawyer

Imre Németh,  Tuesday, 5 September 2023

Zebegény, Hungary

Buying or selling property is a significant event in many people's lives. Therefore, it's essential to minimise the risks of such a transaction, especially when it takes place in a foreign country. In Hungary, choosing a reliable solicitor who speaks both Hungarian and English is key to a successful property transaction.

Preliminary Contract: The Importance of Written Agreements in Hungary

In Hungary, a written form is crucial for a valid property purchase agreement. Therefore, a preliminary contract should also be documented in writing. Even if such an initial contract isn't suitable for registration in the land registry, it can legally enforce the obligations of the other party if necessary.

Deposit: Rules and Consequences

With or without a preliminary contract, it's customary for the buyer to pay a deposit to confirm their commitment. The rules concerning this deposit are clear and include the procedure in case the contract isn't fulfilled.

Mortgage Purchase: Considering the Bank's Expectations

Often, there isn't enough money available to cover the entire purchase price, and a bank loan is taken. In such situations, the solicitor must consider the bank's expectations and tailor the contract accordingly.

Mortgage and Sales Restrictions: Dealing with a Burdened Property

It's common for the property being purchased to be under mortgage. In these cases, it's advisable to ensure that all debts are settled from the purchase price first.

Handover of Possession: Terms and Payment of the Final Purchase Price Instalment

The terms of handing over possession and the payment of the final instalment of the purchase price are crucial. Typically, it's agreed that the seller doesn't have to hand over the property's possession until they've received the entire purchase price.

Contract Conclusion: Process and Checks

The process of concluding the contract includes obtaining a land registry extract of the property being purchased and verifying the parties' identities. A diligent solicitor will retrieve the land registry extract just before the contract's conclusion to ensure no issues arise.

Costs: Expenses Associated with Buying or Selling

Various costs are associated with buying or selling property in Hungary. These include the acquisition tax, the fee for the procedure at the land registry office, the solicitor's fee, and income tax.

Overall, buying or selling property in Hungary is a complex process with many pitfalls. The biggest mistake buyers or sellers can make is making decisions without a solicitor or choosing the wrong one. An experienced solicitor can simplify the entire process and help minimise potential risks.  

House on the edge of a Hungarian village
Second homes, renovation objects and holiday homes for sale in Hungary. For sale by owner and agents. Properties at Lake Balaton, in Pecs and many other regions. 

106532631 The buying process of real estate in Hungary can be a tiresome process as legal and administrative procedures can go on for months. The system is highly bureaucratic, but that also means that it is almost error and scam free. However, paying proper attention to every step and detail is vital, since any mistake can and almost certainly will prolong the process. 
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