Hungary left the Soviet and communist era behind with a much stronger economy that had other nations that formerly were kept behind the Iron Curtain. As a result, Hungary has continued to enjoy an economic advantage over many countries in Europe in recent years. Most financial analysts and economic experts maintain that Hungary will enjoy a GDP that will exceed by 50% annually over what is being experienced in other EU nations over the coming few years.
One sector of the overall Hungarian economy that has been experience significant growth and activity is the real estate market. Thanks to efforts made by the Hungarian government to liberalise and streamline its real estate laws, including those laws that pertain to foreign ownership of real estate, more and more foreign nationals are investing in Hungary.
Historically, foreign nationals could not invest in real estate in Hungary. However, at this juncture, a foreign national can invest as an individual in real estate in Hungary. With that said, prior to making the purchase of real estate as an individual, a foreign national must obtain permission from the Hungarian Land Registry to purchase real estate in that country. Again, this step must be taken only if a foreign national intends to hold title to real estate in Hungary in his or her individual capacity.
The process of preparing an application for the Land Registry is a simple matter. With that said, there can be up to a month’s wait before the Land Registry will act on an application to purchase real estate.
Some foreign nationals forgo 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. A competent lawyer in Hungary can complete the documents necessary to create a limited liability company within a day — and can have them filed immediately with the appropriate governmental authorities.
Once a foreign national determines which route he or she will take in regard to the purchase of real estate in Hungary — with as an individual or through a limited liability company — the next step in the real estate sales transaction process is the execution of a preliminary sales agreement. Generally the buyer is obliged to post a deposit at this juncture, usually in the amount of about 10% of the overall purchase price of the real estate. After the initial agreement is signed, the buyer embarks on obtaining his or her financing while the seller makes certain that the property is capable to being legally conveyed to the buyer, makes certain that there are no legal encumbrances attached to the real estate. The seller must make certain that the buyer can take possession and ownership of the real estate free and clear of any impediment.
The last step in the real estate sales process is the execution of the final sales agreement and the conveyance of the deed from the seller to the buyer. The deed will then be registered with the Land Registry Office which will make necessary changes in the legal records pertaining to the property to reflect the new ownership of the real estate.
Overall, the real estate sales process in Hungary has become significantly easier to undertake in the course of recent years. Whether one is proceeding as an individual or through a limited liability company, a foreign national can purchase a wide range of different types of real estate in the country in the 21st century.