Selling Your Property in Budapest? All About Taxation
If the owner wants to sell his property he can count on some costs that are handy to know at the beginning. It is especially important for those who would later like to buy new real estate from the amount they are receiving, and for those who would like to take a loan from the bank.
If a property has been transferred after 2013 personal income tax liability is incurred for the new owner. This tax has to be payed if the purchased property is sold more expensively than it was previously purchased, according to the bankmonitor.hu portal’s data.
A 15% personal income tax has to be payed from the profit if a private individual sells the property or the usufruct.
What counts as revenue?
- selling price
- the market value of the thing acquired in exchange for the property
- default interest paid by the buyer
What costs can reduce the tax base?
- the tax paid for the purchase,
- the purchase price originally paid for the property,
- the value-added investments carried out since the purchase, the value of the renovation,
- work on preservation carried out within 24 months before the sale, amounting to more than 5% of the amount stated in the contract (these expenditures must be certified by invoice),
- for the inheritance the amount on which the fee was determined, in the case of a non-taxable inheritance the amount contained in the estate inventory is valid,
- in the case of gifted ownership, 75% of the purchase price of the sale must be taken into consideration, in which case other costs may no longer be charged,
- expert fees and attorneys' fees paid for the purchase
- the costs of advertising and real estate brokerage fees
The rate of taxation
In case of selling real estate, for how long a person has the immovable property determines the amount of tax. For the total amount you have to pay a 15% income tax if you sell a property that you bought in 2016 or later. However, if you purchased the apartment / house in 2013 or before, you no longer have personal income tax. If you bought the real estate in 2016, the taxable income will decrease with 10%, if in 2015 by 40% and if in 2014 by 70%.