Can Russians and Belarusians buy real estate in Hungary in 2023?

Acquiring real estate in Hungary: information for Russians and Belarusians in 2023

In this article, we will discuss in detail how citizens of Russia and Belarus can purchase real estate in Hungary in 2023. We will also look at the tax aspects related to this transaction, as well as some nuances regarding obtaining Hungarian citizenship.

Cultural associations with Hungary

When Hungary comes to mind, many immediately think of vibrant cultural elements like the czardas and goulash. These two words have become synonymous with the Hungarian national identity:

• Czardas— it's a lively dance with a prolonged melodic introduction.
• Goulash— it's a fragrant and hearty dish.

They perfectly reflect the temperament of the Hungarians, descendants of tribes that were once a powerful force in the 9th-10th centuries, reminding us of the Huns who lived before them. Modern Hungarians are quite different from their ancestors — it is easy to connect with the current inhabitants of the country, and they are naturally open and friendly.

Language and its features

The Hungarian language is considered one of the most difficult in the world, as it belongs to the Finno-Ugric language family and is significantly different from most other European languages. To understand how this people settled in the picturesque areas along the Danube, one should look at historical events.

The history of the Hungarians

In the 9th century, the Hungarian tribes living in the territories of the Southern Urals and the Volga region began to move westward. After stopping in the Black Sea region, they continued their journey into Central Europe.

The climate of Hungary

The climate of Hungary is moderately continental: summers can be hot, while winters are quite cold.

• In the capital of the country, Budapest, the temperature can reach +22 °C in July.
• In January, it drops to -1 °C.

The Alps in the west and the Carpathians in the north and east provide protection against cold air currents.

Thermal springs

Although Hungary is landlocked, this is compensated by a wealth of natural resources, the most prominent of which are thermal springs. The country has over a thousand such springs, more than a hundred of which are recognized for their healing properties.

Budapest is rightly considered the spa capital of Europe due to its eight significant wellness facilities, renowned for their healing waters. Some of these thermal complexes were built during the Ottoman rule, which lasted over 150 years, and the first Roman bathhouses have existed here since ancient times.

The popularity of thermal baths

These baths are popular among both tourists and locals. They are especially sought after by Hungarians, including retirees, who enjoy spending time at the Széchenyi, Gellért, and Lukács thermal baths throughout the year.

• For them, it's not just a way to improve their health.
• This is also an opportunity to have a good time with friends.

Thermal Lake Hévíz and Lake Balaton

It is also worth highlighting the largest thermal lake in Europe — Hévíz. This volcanic lake is renowned for its healing properties and attracts a large number of tourists. In close proximity to it lies the so-called "Hungarian Sea" — Lake Balaton, which offers numerous resorts along its shoreline where vacationers can enjoy relaxation and rejuvenation during the summer season.

The swimming season in Hungary

The swimming season in Hungary lasts from spring to deep autumn. For families with children, the best option is the southern part of the country, where cozy sandy beaches with a gradual increase in water depth are located. At the same time, swimming in the northern regions can present certain challenges, as the bottom is only noticeable at a short distance from the shore, and entering the water often encounters rocky areas.

Thanks to its numerous lakes, resorts, and rich cultural heritage, Hungary is becoming increasingly attractive to foreign tourists. People from neighboring countries such as Austria, Slovenia, Croatia, Romania, Ukraine, Serbia, and Slovakia often choose Budapest or the picturesque Lake Balaton for their vacations, and that's just the beginning.

The economy of Hungary

Tourism in Hungary plays an important role in the economy; however, alongside it, various sectors are actively developing, such as:

• agriculture
• metallurgy
• machine engineering
• pharmaceutical industry
• chemical industry
• food industry

At the beginning of the last century, when the country was part of Austria-Hungary, automobile production began on its territory. A carriage-making workshop located in Pest since 1895 eventually transformed into a factory that started producing buses.

In the post-war years, this enterprise was nationalized and became part of the joint-stock company "Ikarus," founded in 1916. This led to the emergence of the famous bus brand in the Soviet Union.

Real estate and its development

Since 2004, Hungary has been a part of the European Union and joined the Schengen Area. Regarding the real estate sector, according to the European Commission, housing prices in the country have increased 2.5 times since 2010, which is the second largest increase among EU countries, surpassed only by Estonia.

The rapid growth of housing construction in Hungary was driven by record-low interest rates on loans, government support for housing, and rising incomes among citizens. However, since the end of 2022, the economic situation has begun to change. A sharp rise in inflation led to the Central Bank of Hungary raising the key interest rate to 18%, which has impacted the real estate market.

In the fourth quarter of last year, the average price of apartments and houses decreased by 2% compared to the third quarter. However, on a year-over-year basis, there was a significant price increase of 16%, making this figure one of the best among European Union countries.

Trends in rental prices

In 2023, there is a clear upward trend in rents, especially in the capital. At the same time, the number of properties offered for rent is also increasing (+18% year-on-year).

In June 2023, the average rental price in Budapest was 230,000 Hungarian forints, which is about 616 euros per month. This is an increase of 1.8% compared to May and 15.6% higher than last year.

A year ago, during the summer of 2022, Hungarian media warned about the possibility of a decline in housing prices due to rising gas and electricity tariffs. However, these concerns were not confirmed.

Utilities in Hungary

Despite rising service tariffs, Hungarians continue to pay utility bills at a relatively low level, especially if their expenses are within the limits set by the state. For example, the owner of a 100 square meter apartment can easily adhere to these limits and avoid overpayments.

According to Eurostat data, in the second half of 2022, Hungary ranked among the top three countries in the European Union with the lowest electricity tariffs for households.

Interest of foreign investors

Real estate in Hungary has firmly established itself as an attractive market for foreign investors. There is particularly active purchasing of housing by Chinese citizens, who hold the top position among non-EU residents. A significant number of transactions are also made by Israelis, Britons, Americans, Russians, and Ukrainians.

Many of them choose to buy apartments in Budapest or at popular resorts, planning to rent them out for both short and long terms, which provides a stable income.

• Searching for short-term rental.
• Long-term investments;
• Creating a cozy vacation home.

Additionally, some investors view purchasing real estate as a way to organize a cozy vacation in the heart of Europe during the peak holiday season. There is also a category of buyers who intend to move to Hungary for permanent residence. Many of them choose the capital to provide their children with the opportunity to receive a quality education in Europe. In such cases, affluent parents often buy small studio apartments ranging from 42 to 45 square meters for their children.

The appeal of Budapest

Budapest captivates tourists with its exceptional beauty. The city is formed from two separate parts: the hilly Buda and the flat Pest, which are divided by the majestic Danube River. Currently, eight bridges have been built for convenient travel between these parts. One of the most famous is the Chain Bridge, which is actively used by both vehicles and pedestrians in the central part of the capital.

Historical districts and their value

The most sought-after and valuable real estate is concentrated in the historic center of Pest, especially in the V, VI, and VII districts, which are located within the boulevard ring. In Hungary, the districts of Budapest are designated with Roman numerals, while other regions of the country use Arabic numbers.

The fifth district is considered one of the most attractive to tourists due to famous attractions such as:

• Basilica of St. Stephen
• The Vörösmarty Square with the Christmas market;
• Old buildings and a variety of restaurants.

Compact, stylish apartments designed for rent to tourists are popular. There are also more spacious living areas, which are divided into several apartments according to one cadastral number. This makes them more attractive to the hotel industry, which in turn spurs the development of the service sector in Budapest and other regions of Hungary.

Interest in new real estate in Budapest

There is significant interest in new real estate properties in the housing market of Budapest; however, the number of available options in this region is quite limited. For example, one can purchase a renovated apartment with an average area of 60 square meters, located in the very center of the capital, for around 200,000 euros.

If we compare it to the situation a few years ago, we can see that Russians and many foreign investors were actively considering purchasing property in the XIII district. Currently, a large modern residential complex is being built on the banks of the Danube, called“Marinaport”representing a lucrative investment opportunity. However, as of today, the sale of real estate to foreigners without permanent residency in this and the IX districts is significantly restricted, which has not been officially announced.

The goals of government measures

These measures have been implemented by the government to improve housing accessibility for local residents. As a result, apartments in these areas primarily become living spaces for young families who can receive government subsidies.

Challenges for foreign investors

It should be emphasized that foreign persons with Hungarian citizenship, despite the restrictions in force, retain the possibility of acquiring real estate in the so-called“closed”In some areas, having a residence permit alone will not help other foreign investors complete a deal.

Local authorities do not approve of such transactions, and attempting to circumvent this ban may result in the loss of the deposit.

Rising apartment prices

One of the key factors that led to the introduction of strict conditions for foreign investors in Budapest was the significant rise in apartment prices in the area. For example, five years ago, it was possible to purchase a well-equipped apartment in"Marinaparte"an area of 45-47 square meters for an amount ranging from 135,000 to 150,000 euros, whereas today similar housing is listed for sale at 200,000 euros.

Development of districts

District IV, located in the immediate vicinity of XIII, is also being actively developed. Several residential complexes available for foreign buyers have been built here, but it should be noted that they are located at quite a distance from the city center.

Next to the central areas, there is another interesting but diverse district - VIII.

Real estate in Budapest

In this area, you have the opportunity to purchase real estate priced between 220,000 and 230,000 euros. There are also elite residential spaces here, such as in the prestigious District I, located on Gellért Hill. From this height, there is a stunning panoramic view of the majestic Parliament building, which is situated on the opposite bank of the Danube and is considered an important symbol of Budapest. It is worth noting that no new construction is taking place in this part of the city, and prices for already built apartments remain quite high.

Areas for comfortable living

Certain areas in districts II and XI can be comfortable for living. The latter is clearly visible from district V, from which our overview begins. District II is a large area where a significant number of buildings consist of low-rise houses constructed in the 1980s. The buildings, which include 4-6 apartments and have their own fenced yards and garages, are referred to as "kotska," which translates to "cube." This district attracts families due to its clean air and developing infrastructure, although the appearance of the buildings already looks somewhat outdated.

Elite housing in the II and XII districts

The second district and the twelfth district located across the river also offer high-end residential areas with villas starting at one million euros. Here, buyers can choose between stylish modern homes with pools and renovated historic estates. Since local shops are not very common, residents often drive to do their shopping. Despite this, the area attracts interest from foreign nationals due to its proximity to international educational institutions, such as the Austrian, German, and English "Britannica" school.

Prestigious areas with luxurious villas

Another upscale area with luxury villas is the II-A district, located on the edge of the city and in close proximity to the French school. There is also an American school on the outskirts of Buda, in Nagy Novaci, which can be reached by car in just 10-15 minutes.

Beach vacation

When it comes to beach vacations, many foreigners with the necessary budget, after moving to Budapest, seek to buy a house or apartment in the resorts of Lake Balaton or in the city of Hévíz. On the northern shore, there are several resort towns:

• Balatonkenese
• Balatonalmadi
• Balatonfüred
• Tihany
• and others

On the southern shore, there are:

• Santod
• Siofok
• Fonyod
• Tapolca
• Balatonlelle

Elite complexes at resorts

Along the coastline you can see many elite complexes with luxury villas, the cost of which starts from a million euros. In addition, the resorts offer low-rise buildings, where you can also find luxury apartments. For example, in a closed cottage village of four houses, a two-bedroom apartment with an area of 57 square meters is offered for 600,000 euros. A variety of low-rise buildings can be found around Balaton, which makes the region attractive for both residential and recreational purposes.

Introduction to the Hungarian Real Estate Market

In Hungary, there is a wide range of opportunities to purchase both duplexes and townhouses. For example, if we consider housing with an area of 180 to 250 square meters, including a garage and a small yard, located a 20-minute walk from the beach, the price will be around 4500 euros per square meter. As a result, buying such a property could cost at least 810,000 euros.

Available options in Siófok

Nevertheless, there are more affordable options, such as in Siófok, where modern multi-story residential complexes are actively being built. These buildings often offer extensive amenities, including:

• playgrounds
• pools
• underground parking lots

Also available are smaller apartments of 45 to 65 square meters. Prices for such properties start from 320,000 euros.

The housing market at Lake Hévíz

The housing market in the Lake Hévíz area offers somewhat lower prices compared to the shores of Lake Balaton. In the vicinity of the thermal spring, you can find a variety of housing options, including villas, townhouses, and apartments. However, it is important to note that many properties by the lakeside are often not intended for permanent residence and have a pronounced seasonality. In winter, it becomes quite secluded here, and many commercial establishments may close down.

Regarding purchases by citizens of Russia and Belarus

As for citizens of Russia and Belarus, in 2023 they do not face significant difficulties in purchasing real estate in Hungary. However, experts claim that the payment process for Russians and Belarusians has become more complicated. Currently, funds transferred from Russian banks are not reaching Hungarian financial institutions.

Even if the money has been credited to the account of a local lawyer, the bank may refuse to credit it, citing the current rules of regulators. Now it is possible to pay for real estate only through financial organizations of third countries. Typically, buyers choose banks from:

• Armenia
• Kazakhstan
• Georgia

Legislative aspects of purchasing

It is also important to note that according to Hungarian law, foreigners who are not residents of EU countries must obtain permission from the Ministry of the Interior to purchase real estate. The reliability of such a transaction is only verified after the contract is signed. The lawyer handling the transaction sends one copy of the contract to the land committee and another for client data verification. This process can take about 60 days.

In Hungary, this procedure has been in place for a long time and is considered common practice, except when a client wants to buy an apartment in certain neighborhoods of Budapest, such as XIII and IX.

Real estate taxes

In particular, property acquisition taxes in Hungary are set for both local citizens and foreigners: a one-time tax is provided at the rate of4%Usually, this tax needs to be paid about six months after moving into a new apartment. In Budapest, there is no property ownership tax, which makes buying real estate in this city more attractive for investors.

Conclusion

All these points clarify the key aspects of planning a home purchase in Hungary, including the specifics of legislation and financial processes that future buyers should consider.

Conclusion

In conclusion to the real estate market review in Hungary, it is worth noting that the country continues to be attractive for both local and foreign buyers, including citizens of Russia and Belarus. Despite recent economic fluctuations and rising interest rates, Hungary maintains its uniqueness and potential in the residential real estate market.

Prices are rising, which confirms the interest in real estate as an investment tool. Average rental prices, especially in the capital, are also increasing, creating additional opportunities for investors. This indicates the vitality of the market and its ability to adapt to changes.

Unique features of Hungary

Bright cultural traditions, magnificent natural resources, and the availability of thermal resorts make Hungary not just a place to live, but also an ideal option for enjoying life. Against the backdrop of all these factors, citizens of Russia and Belarus may consider purchasing real estate in Hungary as a strategic move.

Why it is worth investing in Hungarian real estate

• Promising market:Real estate prices continue to rise, which indicates the stability of the market.
• Cultural riches:Hungary is known for its traditions, history, and natural resorts.
• Attractive rental:The increase in rental rates provides opportunities for income from real estate.

This can provide not only a cozy corner in the heart of Europe but also ensure financial stability in a changing economic climate. It is important to remember that the desire to invest in a foreign country requires careful consideration of all aspects, including tax obligations and legal nuances.

Your next step

Hungary, with its history, culture, and modern realities, remains one of the most promising destinations for foreign investors. Therefore, if you do decide to take a step in this direction, hope that this experience will mark the beginning of a new chapter in your life, full of opportunities and new achievements.