Hungary residence permit by real estate investment: complete guide

What is a Hungarian real estate residency program

Buyers of Hungarian real estate can obtain a Hungary Golden Visa, which is a residence permit also known as the Hungary Guest Investor Residence Permit. This program was introduced in early 2024 and is sometimes referred to as a real estate residence permit.

The minimum property price is €500,000. It must be residential and can either be a new dwelling or a resale. 

To purchase real estate, a buyer needs to obtain permission from the Land Registry in the district where the property is located. A lawyer who accompanies the deal obtains the permission. The procedure takes up to 4 weeks.

A property buyer and their immediate family members included in the application acquire residence permits valid for 10 years. These permits can be extended for an additional 10 years, provided the investor still holds the property.

The investor must hold the property for at least five years to maintain residency. After five years of ownership, they are allowed to sell the real estate.

5 benefits of Hungary residence permit by real estate investment

1. Freedom of movement within the Schengen Area. Hungarian residents do not need a visa to travel to the 29 Schengen countries. This rule applies to business or tourism trips of no longer than 90 days in any 180 days.

For stays of longer than 90 days, a resident needs to get a national visa or a residence permit in the host country.

2. Opportunity to move to a stable and safe EU country. Although living in Hungary is not obligatory to maintain residency by real estate investment, applicants always have the option to move there. 

Hungary’s economy is experiencing a steady upturn. Government initiatives have bolstered economic resilience, leading to a 4.6% growth rate in 2022 amidst COVID-19 challenges. Although 2023 saw a minor contraction, forecasts are optimistic, anticipating a return to robust growth rates in 2024 and 2025.

According to the Global Peace Index 2023, Hungary is the 18th safest country in the world and 11th in the EU. The country offers a family-friendly environment with a low crime rate.

3. Access to EU-level living standards. Hungary offers high-quality healthcare, featuring well-trained medical staff and modern medical technology. Medical services are available to all residents through the national health insurance system.

The country provides quality education at all levels. Public education is free for residents. Higher education institutions are well-regarded both in Europe and globally, with five Hungarian universities included in global rankings. The country is also home to several international schools offering curricula in English and other major languages.

4. Tax optimisation. Hungary boasts the lowest corporate tax rate in the EU at just 9%. To compare, the average EU rate is 21.3%, and the worldwide average is 23.5%. The personal income tax rate is 15%. which is significantly lower than in the European OECD countries; they pay 43% on average.

Hungary has double taxation treaties with more than 80 countries, including the EU, the UK, Australia, Canada, China, and the UAE. Such treaties help prevent double taxation of income earned in one country by a resident of another, hence reducing the overall tax burden for taxpayers with international economic activities​.

5. Residency for the whole family. Foreign investors who buy real estate in Hungary can include their family members in the permit application. This is relevant for an investor’s spouse and children under 18. All the family obtain permits with the same validity as the investor’s.

Who can get Hungary real estate residency

Foreign nationals are allowed to purchase real estate in Hungary; citizenship is not required. However, to participate in the Hungarian real estate residency program, applicants must not be citizens of the EU or the EEA.

To qualify, an applicant must meet the following criteria:

• be over 18;
• prove a legitimate source of income;
• have no criminal records;
• not be subject to sanctions;
• have health insurance and no severe illnesses.

An applicant can also include family members in the application:

• a spouse;
• children under 18.

The number of applicants does not affect the minimum property cost. Only the amount of additional fees increases.

Documents to obtain a Hungary residence permit by buying a property

To obtain Hungarian real estate residency, an applicant must submit the required documents twice: initially for a Guest Investor Visa and subsequently for a residence permit.

The required documents are practically the same for both applications:

• valid passport;
• 2 recent 3×4 cm photos;
• health insurance;
• letter of intent to purchase real estate — for a Guest Investor Visa;
• confirmation of investment — for a residence permit;
• documents proving the legitimacy of the income;
• bank statements indicating a cash balance;
• marriage certificate, if applicable;
• birth certificates, if applicable;
• CV for each member over 18;
• completed government forms.

Real estate costs in Hungary

Property prices in Hungary are more affordable compared to other Western European countries. In 2024, the average apartment price in Hungary ranges between €2,040 and €2,690 per square metre, depending on the location. To compare, residential real estate values in Germany vary between €4,800 and €5,940 per square metre, and in the USA, prices range between €2,660 and 3,360 per square metre.

The price difference between new and resale residential properties in Hungary can be quite significant. It also fluctuates depending on the region and property size. A new property might be on average 25 to 125% more expensive than a resale. In 2023, the average price of new homes in Hungary was €147,300, while second-hand homes were valued at €67,800.

Prices in Budapest vs nationwide also differ. The cost per square metre in the Hungarian capital ranges between €2,430 and €3,560, which is approximately 27% more expensive than the nationwide average.

The cost of property in the capital city depends on the location of the real estate. For example, a three-bedroom apartment on the outskirts of Budapest costs approximately €200,000, while in the city centre, the price is about €500,000. An apartment in the centre of Budapest with a view of the Danube River or the historical centre can cost around €1 million.

Hungarian real estate market trends indicate rapid growth over the last eight years, driven by economic growth, urbanisation, and an influx of foreign investment​. The annual growth rate reached up to 30%.

However, in 2023, the market rise slowed down as the national economy stagnated, with a GDP decrease of 0.8% and an inflation rate of 17%. The market prices grew by 14%.

The European Commission forecasts that the Hungarian economy will be “back on track” in 2024 and 2025 with projected GDP growth of 2.4% and 3.6%, respectively. Subsequently, the property market may experience a more substantial rise than in 2023.

Taxes and fees for buyers of Hungarian real estate

The costs associated with purchasing property normally typically amount to up to 10% of the property price. This includes VAT, stamp duty, administrative fees, and service fees. For example, purchasing a new apartment priced at €500,000 might total approximately €550,000 once all taxes and fees are considered.

Value-added tax, or VAT. This tax applies to primary real estate and is usually already included in the price. VAT at a reduced rate is 5%. This rate is applicable until the end of 2024, extending to the end of 2028 for long-delayed projects.

Stamp duty, or a transfer tax. This tax must be paid within 90 days after the deal is closed. The rate depends on the cost of real estate and is as follows:

• 4% — for properties below 1 billion forints, or €2.6 million;
• 2% — for the amount exceeding 1 billion forints, or €2.6 million;

Administrative fees. In total, these fees generally do not exceed €312 and are broken down as follows:

• permission for property purchase — €170 to €200;
• veto on activities with the property while processing documents from the Land Registry — €60;
• extract from a land registry — €30;
• title deed — €22.

Service fees. The buyer will need assistance from a realtor, a notary, and a lawyer. In total, their fees do not exceed 5% of the property price.

Taxes during ownership. Property owners in Hungary are subject to an annual tax, which can be calculated either as €3.6 per square metre or 3.6% of the property’s market value, depending on regional tax rules.

For renting out the property, the owner pays a 15% tax on rental income.

Sale taxes. Upon selling the property, the owner must pay a 15% capital gains tax on the difference between the purchase and sale prices. Additionally, if a real estate agency is involved in the sale, the agency fee ranges from 4% to 6.5% of the property price.

5 best cities in Hungary to purchase property

Hungary boasts several cities popular among tourists, students, and entrepreneurs. Hence, there are various options for foreigners to buy real estate for long-term investment or to generate rental income.

Budapest. As the capital and the largest city of Hungary, Budapest is a prime location for investment and living. The city boasts a vibrant culture, historical heritage, and a strong rental market due to its popularity with tourists and expatriates.

District V, District VI, and District VII of Budapest are particularly popular among tourists and expats, making them ideal for short-term rentals, while more residential areas like Districts II, XII, and XI appeal to long-term renters.

The average property price in the capital is around €3,000 per square metre.

Debrecen. As the second-largest city in Hungary and a major educational hub with the University of Debrecen, Debrecen is home to a large student population. The city has a robust rental market for student housing and offers a suburban lifestyle. The average property price is €2,040 per square metre.

Pécs. Known for its Mediterranean feel, cultural scenes, and university, Pécs is attractive to students and those interested in a bohemian lifestyle. It’s a UNESCO World Heritage site with a pleasant climate. The average price is lower compared to others and reaches €1,745 per square metre.

Győr. With its proximity to several major capitals like Vienna and Bratislava, Gyor benefits from its strategic location and growing economy. The city also has a strong industrial base, as it’s home to Audi’s manufacturing plant and several others. The average residential property price per square metre in Gyor is €2,340.

Lake Balaton. The region thrives on tourism, with Lake Balaton being a popular destination for both domestic and international visitors. In nearby cities, holiday homes and seasonal rental properties are prevalent, with a range of options from lakeside apartments to detached houses.

There are two more popular cities by the lake: Siofok, where the average square metre price is €2,260, and Veszprem, where property costs €1,960 per square metre.

Other options to obtain Hungarian residency as an investor

Apart from property purchase, the Hungary Golden Visa program offers two additional investment options. These are an investment in real estate fund units and a charitable donation. All investment options allow applicants to obtain a 10-year residence permit in Hungary.

Purchase of real estate fund units. Applicants invest in Hungarian real estate by purchasing units from local investment funds. These funds must be registered with the Magyar Nemzeti Bank (Hungarian National Bank). The minimum investment amount is €250,000, and the investment cannot be redeemed for at least 5 years following the deal.

Charitable donation. Applicants can contribute to a higher education institution affiliated with the Hungarian Foundation for the Management of Assets in the Public Interest. This contribution aims to bolster essential areas such as education, scientific research, and artistic endeavours. The required minimum donation is €1 million, which is non-refundable.

After three years of living in Hungary under a residence permit, an investor can apply for permanent residency. Holding a permanent resident status for eight more years allows the investor to apply for Hungarian citizenship by naturalisation.

Main points about Hungarian real estate residence permit

1. Foreigners who buy real estate in Hungary are eligible for a residence permit under the Hungary Golden Visa program. The program requires an investment in residential property — either a new dwelling or a resale — of at least €500,000.
2. To obtain a residence permit by real estate investment, non-EU and non-EEA citizens acquire a Guest Investor Visa, enter Hungary, purchase a property, and then submit a permit application. The entire process takes about 5 months.
3. The real estate market in Hungary is growing approximately by 20% every year, which makes it an appealing investment option. The growth is fueled by the rising demand from tourists, students, and entrepreneurs visiting the country.
4. The best cities for property investment in Hungary include Budapest, the capital and largest city known for its dynamic market; Debrecen, the second-largest city with a strong educational sector; Pécs, renowned for its rich history and cultural scene; Győr, an industrial hub; and the Lake Balaton region, which is popular for its scenic beauty and wineries.