Tax Return Services For Non-Resident Landlords
Property Tax in Hungary
Hungarian Tax Services & Fees
FILING SERVICES ARE OFFERED TO NON-RESIDENTS IN HUNGARY.
If you are a non-resident landlord with rental income in Hungary, it is mandatory to file income tax returns in both Hungary and your home country.
Let our experienced tax advisors handle this responsibility for you, ensuring compliance with all filing deadlines and preventing penalties or interest charges.
We can also assist you in navigating double taxation agreements, ensuring you are not subject to taxation twice.
Property Tax International (PTI Returns) serves investors and rental property owners globally.
Our knowledgeable tax advisors specialize in local tax laws to minimize your tax liability by ensuring you benefit from all entitled reliefs.
Simplify your non-resident landlord tax return with Property Tax International —saving you time and reducing stress.
Request a no-obligation consultation with a tax advisor and conveniently file your Hungarian property tax return online.
Initial documents review – €150
This fee will apply only once when your property related documents are being reviewed for tax filing with our tax professionals.
Tax number service fees or Tax registration – €100 per person
Hungarian personal income tax returns – real expenses regime – €260
This is a complete service covering the necessary tax returns and their annexes (single or married – 1 property), and includes a detailed review of all supporting documents.
Hungarian personal income tax filing – simplified regime – €200
This is a lower fee option which is available instead of the Personal Income tax return option above. If you choose this option a notional % deduction will be taken instead of actual expenses incurred. This option is usually beneficial for individuals if the level of expenses is low, or if no valid supporting documents are available (single or married – 1 property).
Additional property – €75
This fee is due for the second and each subsequent property if applicable.
Additional owner – €75
Tax clearance certificate – €50
The Hungarian tax office does not release automatic assessment notices. We can assist with tax clearance certificate applications if required.
Documents retrieval fee – €50
This fee will apply if you require Property Tax International to obtain some documents on your behalf, excluding bank and mortgage statements.
Assistance with tax audit – starts at €99
Tax audit assistance pricing is determined by case complexity. For more details, reach out to a member of our international tax team.
Administrative fee – €30
This fee is obligatory and due for each year of submission. It covers postage, phone calls, photocopying etc.
Assistance with tax payments – €30
Multiple years discount – 10%
Available where returns for 2 or more tax years are required. This discount is applicable to the annual fees excluding any once-off fees and administrative fees and does not apply where other discounts/reductions have been granted.
Notes:
- All fees are inclusive of VAT.
- Prices are based on the provision of information in pre-agreed format – a surcharge of 20% may be applied for disorganized files.
- Prices are based on the provision of necessary backup documentation only – the inclusion of unnecessary documentation may result in the application of an additional charge.
Request a free callback from a tax advisor
When you apply through this contact form:
- A French tax specialist will contact you
- After specifying with you the services you need and the tax documents required, you will receive information regarding our final fees
- Before we can start to work on your French tax return, we will need you to share the necessary property information and tax documents with our French tax team
Rental Income Tax in Hungary
Rental income from residential property in Hungary is subject to tax, regardless of whether the owner is a resident of Hungary or not.
If you own a rental property in Hungary, you have an obligation to declare this income by submitting a tax return to the Hungarian tax office each year. Foreigners must submit a rental income tax return in Hungary and their home country.
Our experienced property tax advisors can help you navigate double taxation agreements, ensuring you don’t get taxed twice.
An individual is considered a non-resident in Hungary if s/he does not spend 183 days or more in any tax year in Hungary or does not have their primary residence there.
Individuals who own rental properties have the option to calculate their rental income tax in one of two ways:
1. Flat tax:
This option involves paying income tax on 90% of the gross rental income.
This can be a simpler option for taxpayers who do not have detailed records of their rental expenses.
The flat tax rate for rental income in Hungary is 15%. This is the same rate that applies to other types of income, such as wages, salaries, and business profits.
The option of using a flat tax rate for rental income is available to both Hungarian residents and non-residents.
2. Actual expenses:
This option involves subtracting the actual expenses incurred in connection with the rental property from the gross rental income.
This can be a more favorable option for taxpayers who have significant expenses, such as property taxes, maintenance costs, and utilities.
Nonresidents are only subject to taxation on their income earned in Hungary. Couples who are married pay taxes separately.
It is important to consult with a tax advisor to determine which option is most advantageous for your specific situation.
Property Tax in Hungary
Property owners in Hungary pay a local tax on real estate, called property tax (“ingatlanadó”). There are two types of property tax: local land tax and local building tax.
The maximum rate of the local land tax is 3%, and the maximum rate of the local building tax is 3.6% of the market value of the real estate.
Municipalities set their own tax rates, but they cannot exceed the maximum rates. The average cost of property tax in Hungary is €3 per square meter per year.
There are exemptions for certain property owners and property types. Property tax is payable to the municipality where the property is located. Non-resident property owners may also be liable for property tax, but there may be tax treaties that provide some relief from tax.
Capital Gains Tax in Hungary for Non-residents
Non-resident individuals who sell real estate pay a 15% tax on the profit they make. You can subtract costs like property purchase expenses, improvements, and transfer fees from your earnings to figure out your net profit. If you don’t have proof of these expenses, the 15% tax is applied to a quarter of your total earnings.
Your taxable gain decreases by 10% each year starting from the sixth year after you buy the property. So, in the fifteenth year, you won’t have any taxable gain left. For example, you get a 10% deduction in the 6th year, 20% in the 7th year, 30% in the 8th year, and so on.
Hungary Income Tax for Foreigners
Residents are required to pay taxes on all their income, regardless of its source. Non-residents, on the other hand, are only taxed on income earned within Hungary. The top income tax rate stands at 15%.
Income generated from renting property is subject to a fixed 15% tax rate. To determine the taxable income, you have two options: subtract the documented and actual expenses involved in renting, like lighting, maintenance, and administrative costs, or deduct a flat 10% of the gross income as a notional deduction (representing a 10% expense ratio).
FAQs
Who should file a landlord tax return in Hungary?
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. Double-taxation agreements exist so double-taxation relief will usually apply.
What is the rental income tax rate in Hungary?
The current income tax rate in Hungary is 15% 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.
What is the Hungarian property tax rate?
Property owners in Hungary pay property tax (“ingatlanadó”) on their real estate, consisting of local land tax (up to 3%) and local building tax (up to 3.6%) based on the property’s market value. Municipalities set rates but can’t exceed these maximums.The average property tax is around €3 per square meter annually. Exemptions apply in specific cases, and property tax is paid to the local municipality. Non-resident property owners may have tax liability, subject to potential relief through tax treaties.
What sort of tax number is used in Hungary?
In Hungary, individuals and legal entities typically use the “Tax Identification Number” (TIN) or “Adóazonosító Jel” in Hungarian.This unique number is issued by the Hungarian tax authorities (NAV – Nemzeti Adó- és Vámhivatal) and is used for various tax-related and administrative purposes, including filing tax returns, conducting financial transactions, and interacting with government agencies.The TIN helps identify taxpayers and track their tax-related activities.
Am I obliged to apply for a tax number even if I am a non-resident?
Yes, every non-resident who is liable to pay certain taxes 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 real estate.
What are the required documents for filing a landlord tax return in Hungary?
- Management report on income and expenses or other documents containing the same information e.g copy of bank statements;
- Copy of all relevant invoices for renovation, repairs, and other expenses if any;
- Copy of the rental contract
- Tax number: If you are a private person renting out your property, you will need to obtain a tax number from the Hungarian Tax and Customs Administration (NAV).
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 a 15% rate. When you sell a property, the taxable gain is calculated by subtracting the acquisition cost and expenses related to improvements and the property transfer from the sales price. If you’ve owned the property for 5 or more years, you can reduce the capital gains tax (CGT) by 10% for each year of ownership. If you’ve owned the property for more than 15 years, no CGT will be applied.
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Tax Rates and Deadlines
| Tax Year | 1st January – 31st December |
| Income Tax Rate | 15% over net gain. |
| Income Tax Deadline | 20th May 2024 The deadline for filing a Hungarian tax return is 20 May of the year following the tax year (i.e. for 2023 the deadline will be 20 May 2024). 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% |
| Dual Tax Agreement with Ireland | Yes |
| Dual Tax Agreement with the UK | Yes |
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