Property tax services / Hungary / FAQs

FAQs

  • Who should file a tax return?
  • Individuals who receive income from real property situated in Hungary are required to file a tax return and cover the liability (if any) regardless of their residency status in Hungary. Non-residents are taxed on income arising from Hungarian sources only and are liable for a number of other property-related taxes.
  • What is the rental income tax rate?
  • The current income tax rate in Hungary is 16% and there are currently two methods of calculating it. A taxpayer will pay tax either on the received rental income reduced by 10% or on the actual profit i.e. received rental income deducted with allowable costs incurred through the year.
  • Am I obliged to apply for a tax number even if I am non-resident?
  • Yes, every non-resident who is liable to pay certain tax including local property tax is required to apply for a tax number. In addition a tax number is also required when starting a rental activity for profit and even when buying or disposing of a real estate.
  • Are capital gains derived from the disposition of real property taxable in Hungary?
  • Capital Gains on the disposal of Hungarian property are currently taxed at 16% rate. The taxable gain is the sales price less the acquisition cost and expenses relating to improvements and the transfer of the property. If the property to be sold has been owned for 5 or more years 10% reduction per year from the CGT applies. If a property is owned for more than 15 years no CGT will apply.

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