Due to the increasing prices and rent fees Budapest and Hungary came into the spotlight of the foreign investors irrespective of the size of their investment. It is quite popular to buy a real property in the beautiful Budapest, however there are several key factors that should be taken into account before any step made forward.
Proper Legal Support
In Hungary in order to have the proper legal effect of your S&P agreement it should be made by a public notary or an attorney at law, however an attorney at law can have a wider scope of representation. Tipp No 1: Be careful if anyone advises you to enter into an agreement without any attorney or public notary.
Legislation Regarding Foreign Buyers
The government ordinance 251 of 2014 is the applicable legislation in case not a Hungarian citizen would like to buy a real property (the regulation of buying a siol differs from current case). Generally the approval of the competent Government Authority is required as a pre-requisite for the purchase.
In case you are a citizen from a member EU state or from Norway, Lichtenstein, Island, Switzerland or you have a double citizenship including Hungarian or EU member state one than you do not have to apply for any previous approval from the Government Authority.
Such approval process takes 45 days generally.
Although it is in Hungarian this small description issued by the Government Authority can help you after some Google translation:
What Should Be Checked as a First Step
I highly advise to start with the up-to-date Land Registry extract since it should include the most of the important legal facts concerning the real property you choose as an investment target or dream flat.
What to Focus on a Land Regsitry Extract
It should also be checked if there is any
- pre-emption right,
- enforcement right
- or any other ban
that hinders the purchase of the property registered on the extract. If any of those are registered on the extract you should discuss with your acting attorney how to handle those risks since those can be solved but should be considered and evaluated on a case by case manner.
It should also be checked on the Land Registry extract if there is any registered usufruct since than it should be also paid off if you mean to buy a clean real property.
All these matters can be reviewed and discussed with a well-prepared lawyer and that can ensure the safety of your purchase and reduce the possibility of negotiating for a real property which deal may waste your time due to its unsettled legal situation.
On the other hand you may consider buying a new flat that is under construction, however that has also several risks and such case would also require a well-prepared attorney to avoid any step that may hinder you from purchasing your dream real property in Hungary.
Renting out Your Real Property
Nowadays it is quite common for the foreign investors to rent out their real property and use it as an investment. Nevertheless such action should be also legally prepared as a well-drafted contract may safeguard your interests only.
Our law firm can support you not only in the process of buying a real property but to draft the proper contract for renting out and also through our partners we can help you to rent it out.
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