Buying Real Estate in Budapest
Buying a property in Budapest is a good choice if you are looking to relocate to this vibrant city. With the low cost of living and the abundance of high-quality hotels and restaurants, it is no surprise that many people are moving to the city. However, there are some things to keep in mind when buying a property.
Pest, Transdanubia, and Western Transdanubia saw the biggest y-o-y price increase in Q1 2021
During the first quarter of 2021, Pest, Transdanubia, and Western Transdanubia saw the biggest increase in year-over-year price increases. The average price of a new home in Hungary rose by HUF 36 million, or 17.3%, in Q1 2021. The number of housing transactions in non-subsidized villages jumped by 14% y-o-y in Q1 2021.
During the first half of 2021, Hungary's economy grew at the fastest rate ever. In Q2 2021, Hungary's economy expanded by 17.9%. During the first half of 2021, the value of new housing loans rose by 4.6% to HUF 916.8 billion, or a little more than half of Hungary's GDP.
The value of started construction works in Hungary increased by HUF 560 billion, or 17.5%, during the first half of 2021. The total number of new dwellings built increased by 6.8% y-o-y in the first half of 2021. The number of second-hand homes sold decreased by 17.7%.
In 2021, construction activity increased in the Southern Great Plain and Western Transdanubia. The value of construction starts in the last four quarters amounted to HUF 660 billion.
Public safety in Budapest
Despite its status as a world-class capital city, Budapest is not the safest city in the world. There is a risk of violence, and the police often raid nightclubs. Fortunately, there are also measures to keep Budapest safe and secure.
The city is a bustling center, with a lot of traffic. However, it's not unusual for tourists to be targeted by scammers. If you're traveling with a group, be careful about where you stay and how you travel. You can also avoid the city's sketchy areas by using taxis instead of your own vehicle.
If you're a backpacker, don't be surprised if your luggage is stolen. Real estate Budapest has a large homeless population, which can be dangerous. You should also be cautious about leaving valuables behind.
The city also has a high rate of petty crime. Pickpocketing is a common problem on tram lines 4-6. Also, consider leaving your valuables in a safe while you're in the city.
Renovating a run-down apartment
Buying a new apartment can be a smart move for a long-term resident. It can be a lot cheaper than renting. It also gives you more flexibility to customize your property to suit your family's needs. It's also a very safe investment. As Budapest's economy continues to grow, property values are expected to rise over the next couple of years.
There are plenty of reputable lenders that will grant you a loan. However, you will need to make a down payment of 30 to 40 percent. Also, you will need to pay legal fees. This can add another 0.5 to 1.5% to the cost of your total purchase. You should expect to wait two to three months for bank financing to be approved.
Budapest's real estate market has been doing quite well over the past few years. Prices have been on the rise for the past five years. This has made Budapest an attractive investment for foreign investors. However, it's important to understand the local dynamics before diving in.
Taxation on rental income
Investing in real estate in Budapest is a good option for foreigners. Hungary has a lot to offer investors, including the flexibility of taxation on rental income. The legal framework is fairly simple, and Hungary's rental market favors owners over renters. However, you should be prepared for some additional costs, and the best way to avoid them is to consult with a Budapest real estate expert.
The most effective taxation method is the KATA tax. This taxation method is often used by startups. In Hungary, all real estate is registered in a centrally organized Land Registry. This system authenticates the accuracy of registered information.
Rental income is taxed at 15%. The tax base is reduced by 1% each year. The return on investment depends on the type of rental. Generally, property prices in Hungary have risen by 80 to 90 percent.
Investing in Budapest real estate can be profitable, but there are several fees and taxes that you may need to take into account. It's best to consult with a Budapest real estate expert to find out the best way to invest.
