Do you earn rental profit from a property in Hungary? If so, you may have questions about your tax obligations and requirements.
In this guide, we will cover everything you need to know about rental income tax if you are a non-resident property owner in Hungary.
First things first. Let’s take a closer look at tax residency status requirements in Hungary.
- In this article:
- Why does my Hungarian tax residency status matter?
- Am I a non-resident or resident in Hungary?
- What are the tax obligations of non-resident Hungarian rental property owners?
- When do you need to file a Hungarian individual income tax return?
- How is personal income tax calculated in Hungary?
- What tax number is used in Hungary?
- What documents do I need to prepare for my rental income tax return in Hungary?
- What are the double taxation agreements?
- How can I get help with property taxes in Hungary? How PTI can help?
Why does my Hungarian tax residency status matter?
In short, non-residents are taxed only on their earnings from Hungarian sources. In other words, if you are considered a non-resident, you will not have to pay any taxes in Hungary on your worldwide income.
Am I a non-resident or resident in Hungary?
You are considered a non-resident in Hungary if you primarily live in another country and you spend less than 183 days in Hungary each year.
What are the tax obligations of non-resident Hungarian rental property owners?
If you are a foreigner who owns a rental house or an apartment in Hungary, and you are earning a rental profit, you are required to submit an income tax return to the Hungarian tax office each year.
Learn more below about how PTI can help you prepare your Hungarian tax return.
When do you need to file a Hungarian individual income tax return?
The deadline to file your Hungarian tax return is 20 May each year.
How is personal income tax calculated in Hungary?
In Hungary, there is a flat rate of 15% for income tax.
This taxation applies to several types of income, including:
- income from independent business activities
You should pay tax on either: the rental earnings you receive, reduced by 10%, or on the actual profit you earn (rental income with allowable costs deducted).
What tax number is used in Hungary?
The tax number is called “adóazonosító jel” and all taxpayers should have it.
Where can I find my Hungarian tax identification number (TIN)?
- You can find your TIN on your Hungarian TIN card.
- You must request a Tax Card in person at a National Tax and Customs Administration office (Nemzeti Adó- és Vámhivatal).
- Your passport will be needed when applying.
- You will also need to fill out a form T34 (you can download the form in Hungarian and in English).
After having filled the form at the office, you will receive your TIN immediately.
Should non-residents apply for a tax number in Hungary?
Yes, every non-resident is required to apply for it. You will need it to buy real estate and earn rental income.
What documents do I need to prepare for my rental income tax return in Hungary?
In order to prepare your Hungarian rental income tax return, as a landlord you will need:
- your rental income document
- all relevant invoices for repairs and renovation and all other costs if there are any.
What are the double taxation agreements?
Hungary has over 80 double taxation treaties with countries around the world.
If you are entitled to avail of a double taxation treaty, you may be able to pay a reduced rate of tax in Hungary.
Here are some examples of Hungarian double taxation treaties:
- UK and Irish residents
- If you are a resident of Ireland or the UK, you can avail of double taxation agreements and claim relief.
- The same applies to Spain. There is a double-taxation agreement between Spain and Hungary and tax relief is applicable.
Tax Rates and Deadlines in Hungary summary:
|Тax year||1st January- 31st December|
|Income Tax Rate||15% over net gain.|
|Income Tax Deadline||20th May |
The deadline for filing a Hungarian tax return is 20 May of the year following the tax year (i.e. for 2020 the deadline will be 20 May 2021). There is an extended deadline to 20 November for individuals who file a declaration to the Hungarian tax office stating a reasonable excuse why a return cannot be filed.
|Capital Gains Tax Rate||15% (CGT on a sale of a company containing property is 9%)|
How can I get help with property taxes in Hungary? How PTI can help?
You can easily prepare your Hungarian rental income tax return online with PTI.
We provide a complete tax filing service aimed specifically at property owners who are resident outside Hungary.
Our team will conduct a full review of your Hungarian tax profile and ensure you avail of every relief and entitlement you’re due.
We will keep you updated throughout the process and communicate directly with the Hungarian tax office on your behalf.