Hungarian property taxation for non-residents

Long-term rental income

A non-resident who lets a flat located in Hungary is taxable in Hungary on that Hungarian-source income. A Hungarian tax identification number (adóazonosító jel) is needed before the first payment falls due.

The rules for a private individual in 2026:

• Rate: 15% personal income tax (személyi jövedelemadó, szja) ^[6][7].
• No social contribution: szociális hozzájárulási adó (social contribution tax) does not apply to long-term residential rent ^[6].
• 10% flat-rate deduction (költséghányad): 90% of the rent is taxed, with no need to document expenses ^[6][7].
• Itemised costs (tételes költségelszámolás): invoiced expenses are deducted, for example renovation, repairs, utilities paid by the landlord, equipment under HUF 200,000 and depreciation of the building ^[6].

The choice between the two methods depends on the level of expenses: the flat rate suits landlords whose actual costs stay below 10% of the rent.

Timing: quarterly advance payments are due by the 12th of the month following each quarter, and the annual income goes into the May tax return ^[6]. Residential letting by a private individual is VAT-exempt ^[6].

Short-term letting and tourist tax

Tourist letting is not rental for tax purposes but an accommodation service (szálláshely-szolgáltatás). It requires notification to the municipal notary (jegyző), registration in the NTAK system and a tax number ^[6].

Income tax:

• Flat-rate tax per room (tételes átalányadó): since 1 January 2025, HUF 150,000 per room per year in Budapest and HUF 38,400 in other municipalities ^[8]. It is available only to private individuals operating no more than three properties they own or hold in usufruct ^[8].
• Other operators are taxed using the 10% flat-rate deduction or itemised costs ^[6].
• VAT: accommodation is subject to VAT, but a small-business exemption (alanyi adómentesség) can be chosen up to HUF 20 million of revenue in 2026 ^[6].

Restrictions in Budapest:

• No new private accommodation can be registered in Budapest from 1 January 2025 to 31 December 2026; existing registered units may continue ^[12].
• District VI (Terézváros) has banned short-term letting since 1 January 2026 ^[6].
• Districts may set their own rules from 2027; District I consulted its residents from 31 August to 30 September 2026 ^[12].

Tourist tax (idegenforgalmi adó): each district sets the amount, within the legal ceiling of 4% of the accommodation price or a per-person, per-night amount indexed to inflation ^[9]. Examples: District XII charges 4% of the accommodation price ^[11]; District II charges HUF 800 per person per night since 1 January 2026, with guests under 18 exempt ^[10]. The operator collects the tax and pays it over by the 15th of the following month ^[10].

Capital gains on resale

A private seller pays 15% personal income tax on the gain ^[1][2]. The gain is calculated as the sale price minus documented costs, followed by the reduction for the holding period ^[1].

Deductible costs (with invoices or contracts) ^[1]:

• the purchase price;
• acquisition costs, for example transfer duty and legal fees;
• improvements that increase the value of the property;
• sale costs, for example advertising and fees.

Holding period: it is counted in calendar years. The year of acquisition is generally the year the contract was submitted to the land registry ^[2]. The taxable share of the gain is 100% in the year of acquisition and the following year, then 90%, 60% and 30%; from the 5th year the sale is exempt ^[2]. The table below summarises this schedule.

Reporting: the income goes into the tax return for the year in which the sale contract was submitted to the land registry, filed and paid by 20 May of the following year ^[2]. No return is needed if the sale is exempt or produces no gain ^[2].

These rules also apply to non-residents: the France–Hungary treaty leaves Hungary the right to tax gains on property located in Hungary ^[13].

Transfer duty paid by the buyer (vagyonszerzési illeték)

The buyer pays vagyonszerzési illeték (transfer duty) on the market value of the property, which is usually the contract price ^[1][3].

Rate and cap: 4% up to HUF 1 billion and 2% on the portion above, capped at HUF 200 million per property ^[3]. For a flat bought for HUF 60 million, the duty is therefore HUF 2.4 million.

Procedure: form B400 is filed together with the contract at the land registry ^[1][3]. The tax authority (NAV) then issues a payment notice; the duty is payable within 30 days of receiving it ^[1].

Main reductions and exemptions:

• Buyer under 35, first home: 50% reduction if the total value does not exceed HUF 15 million ^[3].
• New home: exempt up to HUF 15 million where the value does not exceed HUF 30 million; the HUF 15–30 million portion is taxed at 4% ^[3].
• Replacing a home: if the buyer has sold a home, only the difference in value is taxed. Since 1 January 2026 the sale may have taken place up to 5 years before the purchase (previously 3 years), or up to 1 year after ^[4]. The relief must be claimed on form B400 ^[4].
• Family: transfers between direct relatives and between spouses are exempt ^[3].

Property traders: a company that earned at least 50% of the previous year's net revenue from property sales can pay 3% if it undertakes to resell within 2 years to an unrelated party, or 2% if it also undertakes that the resale is actually completed ^[5]. If the undertaking is not met, a supplementary duty of twice the difference from the 4% rate is due ^[5].

Local taxes: building tax and communal tax

Hungary has no national property tax. In Budapest each district decides by decree whether to levy a building tax (építményadó) or a communal tax on private individuals (magánszemélyek kommunális adója), and at what level. The Local Taxes Act sets the ceilings: HUF 1,100 per m² per year for building tax and HUF 17,000 per property per year for communal tax, both indexed to inflation since 2003 ^[9].

Example of District II in 2026 ^[10]:

• Building tax: HUF 2,900 per m² per year (HUF 2,300 in 2025).
• Private individuals' homes not used for business are exempt from building tax and fall under the communal tax instead.
• Communal tax by floor area: HUF 9,000 up to 80 m², HUF 16,000 for 80–100 m², HUF 25,000 for 100–150 m², HUF 35,000 above.

A flat owned by a company or used for business can therefore be liable to building tax at the full rate. Amounts differ widely between districts; before buying, check the tax decree of the district concerned.

Timing: local property taxes are generally paid in two instalments, on 15 March and 15 September ^[15].

France–Hungary and Germany–Hungary tax treaties

France–Hungary. The treaty signed in Paris on 28 April 1980, modified by the Multilateral Instrument (MLI) for periods from 1 January 2022, allocates taxing rights as follows ^[13]:

• Rent (Article 6) and gains on real estate (Article 13): taxable in Hungary, where the property is located. The protocol extends this to shares in companies whose assets are mainly real estate.
• Relief on the French side (Article 24): this income is exempt from French tax, but France takes it into account to calculate the rate applied to the taxpayer's other income (effective rate rule). A French resident therefore reports Hungarian rent and gains without paying French income tax on them.
• Dividends (Article 10): Hungarian tax is limited to 15% (5% for a company holding at least 25% of the capital); France taxes the gross amount and grants a credit capped at the corresponding French tax.

Whether French social levies apply to this income is a separate question to check with an adviser.

Germany–Hungary. The treaty signed on 28 February 2011 (Hungarian Act LXXXIV of 2011) has applied since 2012 ^[14]. It lets the state where the property is located also tax gains on shares in companies whose assets are more than 50% real estate; dividend withholding is 5% for a holding of at least 10% and 15% in other cases ^[14]. The method Germany uses to relieve double taxation on Hungarian rent should be confirmed with an adviser.

Frequently asked questions