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If you've been on the lookout for a fresh and exciting spot to invest your time, energy, and maybe a bit of cash, you have come to the right place. In this article we will tell you the most important factors to look out for as a foreign buyer before buying premium real estate in Budapest, and how our team at Metropolitan Homes Budapest can help to make wise choices when buying and renovating a property in our beautiful city.
Let’s clear something up right away: Hungary isn’t only about goulash and thermal baths (though we’ll admit—those are pretty fantastic). The country has been gaining serious attention among international investors for several compelling reasons.
1. Central Europe’s Strategic Hub
Positioned in the heart of Central Europe, Hungary is the region’s quiet powerhouse. Its advantageous location, educated talent pool, and competitive operational costs make it a highly attractive base for both businesses and investors.
2. The Advantages of EU Membership
Hungary’s EU membership acts as a gateway to countless opportunities. With smoother cross-border processes, investor protections, and economic stability, the country leverages the full benefits of being part of Europe’s largest economic alliance.
3. Attractive Taxation & Residency Options
Here’s where things get interesting: Hungary offers appealing incentives for investors, including exceptionally low rental tax rates (details later), and various residency pathways for non-EU citizens. In short—it’s a warm welcome for anyone looking to establish a foothold in the EU.
4. Budapest: Where Lifestyle Meets Opportunity
Budapest isn’t just a city; it’s an experience. With a thriving tech and startup ecosystem, a dynamic urban lifestyle, and world-class historical landmarks, the capital offers the perfect blend of culture and innovation. Whether you’re investing, relocating, or both—the energy here is undeniable.
Whether your goal is rental income or long-term appreciation, choosing the right district is essential. And if Budapest is on your radar, here’s how the city’s neighborhoods stack up.
1. Life & Entertainment: Districts V, VI, VII
If you're targeting young professionals, digital nomads, or short-term renters, look toward Districts 5, 6, and 7. These central areas are vibrant day and night, making them top choices for overseas investors.
District V, home to the Parliament, St. Stephen’s Basilica, and luxury dining, continues to shine with a 4% price increase in 2024.
It remains one of Budapest’s most demanded and prestigious areas.
2. Central Revitalization: Districts VIII & IX
Districts 8 and 9 have gone through major upgrades in recent years, transforming into investment hotspots. But keep in mind: not every street has caught up. Some pockets still feel underdeveloped—research is key.
3. Family-Friendly & Upscale: Buda’s Districts I, II, III
If peace, greenery, and prestige matter, Buda is the ideal choice.
District I: Historic Castle District charm—but properties here are typically leasehold, not freehold.
Districts II and III: Popular among international families thanks to top-tier schools like BISB, AISB, and the Gustave Eiffel French School, plus exceptional nature access and panoramic views.
4. The Rising Stars: Districts XI, XIII, XIV
These districts have entered a strong growth phase, attracting both local and international buyers. They offer excellent infrastructure, strong appreciation potential, and expert forecasts project further momentum through 2025.
For an in-depth look at each district, explore our Budapest District Guide.
Once you've decided on your preferred districts, it’s time to define what matters most to you in a property. Here’s what to consider:
1. Purchase Price: Understanding the Market
Budapest’s market remains competitive:
Average new apartment price in 2024: HUF 79 million (~€200,000)
2025 forecast: 7–10% increase for resale units, 9% for new builds
District V–VI: HUF 100–259 million+, depending on location, size, and renovation level
Don’t forget additional costs such as legal fees, stamp duty, and VAT (section 3 covers all details).
2. Layout & Size: Matching Design to Purpose
Investors: Smaller units (1–1.5 bedrooms) remain the sweet spot—high liquidity, high occupancy, low maintenance.
Families: Look for multiple bedrooms, open living areas, storage solutions, and practical layouts.
Short-term rentals: Compact, optimized spaces with easy-to-clean materials and smart amenities.
3. Physical Condition: Inspect Smartly
Check for signs of structural issues such as wall cracks, moisture, slanted floors, and outdated electrical or plumbing systems.
4. Age of the Property: Renovation Considerations
Older units often offer high ROI potential—but only if renovations are done strategically. Evaluate whether the upgrade cost aligns with local market expectations.
(You can read more in our renovation insights featuring our in-house designer, Orsolya Laasz.)
5. Maintenance Costs: Predicting Long-Term Expenses
Condominiums usually offer affordable monthly costs. Houses, on the other hand, require more upkeep—roof, garden, façade—keep that in mind when budgeting.
1. Eligibility for Purchase
EU and non-EU citizens may buy property in Hungary (except agricultural land).
EU citizens: No special permissions needed
Non-EU buyers: Still require municipal approval
2025 Update:
A new proposed law may allow local municipalities to introduce additional fees or restrictions for foreign buyers, expected mid-2025.
2. Hungary’s Golden Visa Program
The “Guest Investor Residence Permit” (Golden Visa) is delayed, with the €500,000 property option postponed to January 1, 2025.
The investment fund version is technically available, but still non-operational (no approved funds yet).
3. Cost Breakdown
-Legal fees: 0.5–1.5%
-Stamp duty: 4%
-New builds: 5% VAT (typically included)
-Rental income tax: 15%
-Possible 2025 municipal taxes for foreign buyers
4. Bank Loans
Foreigners can obtain mortgages in Hungary with:
-EU residence permit
-30–40% down payment
-2–3 month approval timeline
5. Residence Permits
Owning property is not required for a residence permit. Renting gives the same opportunities. Property ownership, however, can support permanent residence or citizenship applications long term.
6. Property Purchase & Permits
Buying real estate—regardless of price—does not guarantee residency. Residency requires actual presence in Hungary; long absences may cause revocation.
7. Selling & Capital Gains Tax
Capital gains tax (CGT): 15%, but decreases each year.
-Year 0: 15%
-Year 1: 15%
-Year 2: 13.5%
-Year 3: 9%
-Year 4: 4.5%
-Year 5: 0%
Documentation required includes your ID, land registry extract, title deed, energy certificate, and POA if selling remotely.
8. Short-Term Rental Investments
-Important restrictions from January 1, 2026:
-District VI (Terézváros): new Airbnb licenses banned
-District V: all new short-term rentals banned (Existing legal Airbnbs may continue depending on local regulations.)
Hungary remains one of the EU’s strongest long-term performers, with property prices up 230% since 2010.
2025 Projections:
-15–20% growth in transaction volume
-10%+ annual price increases
-Budapest remains Central Europe’s most affordable capital
-Average rental yields: 5.39%
-Foreign real estate investment expected to surpass HUF 1,000 billion in 2025.
Supply is tightening:
Apartment availability down 15%
New building permits in Budapest down 33.5%
→ Fueling consistent price increases across all sectors
Local Expertise
Our team lives and breathes Budapest. We know every district’s pulse, demand cycle, and hidden opportunities.
Data-Driven Analysis
Through advanced tools and years of experience, we analyse market conditions, price dynamics, yield potential, and long-term appreciation opportunities.
Rental Intelligence
With Budapest’s strong rental market and 46 million annual tourists, we can estimate rental income with high accuracy.
Renovation Support
Our in-house team—including designer Orsolya Laasz—helps identify profitable renovation strategies aligned with current trends.
Skilled Negotiation
In a tightening market, negotiation expertise is crucial. We ensure you secure the best possible price and terms.
Post-Purchase Services
From tenant placement to full property management and future sale strategy—we stay with you long after the keys are handed over.
This guide reflects the most recent 2025 market context and regulations. Laws and conditions can shift rapidly, so always consult a qualified expert before making key decisions.
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