📌 Real estate sales & tax liability in Hungary

Capital gains tax / speculation tax explained simply
When real estate is sold at a profit in Hungary, capital gains tax is payable, as in many countries. This is levied on the profit (i.e., the difference between the purchase price and the sale price) and is regulated by Hungarian tax law.

💡 How high is the tax?
The capital gains tax on real estate sales is generally:

🔸 15% on the pure profit

📉 Graduation – the longer you hold the property, the less tax you pay
Hungary rewards long-term ownership:
The tax burden decreases with each year that the property is owned:

Holding period since purchase    Taxable profit share
In the 1st year    100%
In the 2nd year    90%
In the 3rd year    60%
In the 4th year    30%
In the 5th year    0% → tax-free!

🔔 This means that after 5 years of ownership, the profit from the sale of the property is tax-free.

🧾 What counts as the purchase price?
The original purchase price according to the contract is used to calculate the taxable profit, including notary fees, brokerage costs, and verifiable investments (renovations, conversions).

Example:

Purchase price in 2019: $30,000

Sale in 2024: $60,000

Verifiable investments: $5,000
→ Profit: $60,000 – $30,000 – $5,000 = $25,000
→ Taxable in the 5th year: 30% of $25,000 = $7,500
→ Tax: 15% of €7,500 = €1,125

🛂 Does this also apply to foreigners?
✅ Yes, the regulation also applies to foreign property owners who sell a property in Hungary.
Foreigners are required to pay tax on their profits in Hungary, even if they live in another country. A double taxation agreement can prevent double taxation – this should be clarified with a tax advisor in your home country.

📝 Important:
The tax must be declared in the annual income tax return (SZJA).

Proof of acquisition costs and investments should be carefully documented.

📍 Conclusion:
Anyone who sells a property in Hungary at a profit must pay up to 15% capital gains tax, depending on the holding period. From the sixth year onwards, the sale is tax-free. With good planning and documentation, the tax burden can be minimized or avoided altogether.