Country Buying Guides - Hungary

The conveyancing process

• Independent Lawyer
It is essential to use an independent lawyer with a legal knowledge of both the English and Hungarian legal systems, who are able to translate the documents and explain the terms to your full understanding.

• Due Diligence
It is important to carry out due diligence on the property you are purchasing in order to ensure there are no encumbrances on the property. Your independent lawyer will do this on your behalf.

• Restrictions
Prior to purchasing of real estate as an individual in Hungary, a foreign national must obtain permission from the Hungarian Land Registry to purchase real estate. This is a simple procedure which your independent lawyer can sort out for you. Alternatively some foreign nationals pass over the Land Registry application process by establishing a limited liability company in Hungary that can take ownership of real estate without the requirement of registering with the Land Registry Office, again your independent lawyer can help you with this process.

• The Land Register
In order to become the legal owner of a property in Hungary, as in England, the proprietor has to be duly registered on The Land Register. This process of Registration can take up to a month and there is a registration fee of 0.5% of the property value.

• The Pre-Contract
Unlike in England, funds must be available around the time that the contracts are exchanged. The pre-contract is signed and a 10% deposit is payable to within 10 days. If you fail to complete on the date stated the vendor has the right to keep the deposit. Should the vendor drop out of the contract, you will receive your deposit plus 100% back.

• The Contract
Once the pre-contract is signed and the deposit paid, the remaining balance is normally payable within the next 30 – 45 days; however this is negotiable within the contract. The contract itself should contain, the terms of payment, the dates and time frame for completion, the size and location of the property, and the consequences of late payment and any other terms you have discussed.

• The Land Registry
Once the pre-contract has been signed it is necessary to apply to the ministry of affairs for acknowledgment of reciprocity. Without this you can not be entered on to the land registry and hence can not hold the title for your property. Once you receive the certificate you can produce it at the land registry and successfully receive the title to your property. You independent lawyer can guide you through this process and make most applications on your behalf.

• Inheritance
Most foreign legal systems’ inheritance law is different to our system, hence it is extremely important to use your independent lawyer to help you make a will so that in the unfortunate event of your passing, your wishes and not the word of the law is followed.

• Costs and Fees
In Hungary there is a Stamp Duty of around 6% of the purchase price.

In Assocation With The International Property Law Centre LLP