Budapest, the capital of Hungary, is a beautiful city with temperate climate and attracts property buyers for convenience that it offers. The city has made successful transition from socialism to capitalism. This has been reflected in the real estate market as well with relinquishing of sate control on housing and new modern, fully furnished apartment block replacing old style traditional residential buildings.
Property investment is a good option in Budapest because its property price are cheaper than other European capital cities .The European accession has brought considerable foreign investment in the property market with 70% of the total foreign direct investment in Hungary is poured into Budapest alone. Due to booming economy the demand for rental homes is on high and rental returns are pegged at 5%-6%.
The property appreciation averages between 10%-16% and is following the upward trend. Hungarian banks offer easy loans to finance purchase of property up to 70% price of the property. The loan is generally granted for a maximum period of 20 years. Hungary has lowest corporation tax rates in all of Europe at 16%. Often investors buy apartments to rent them out and real estate companies offer such arrangements. The legal system is hassle free and legal costs add up to 1% of the total property cost. It takes about one or two months for the sale to get complete.
It is often advisable to buy property through a company for availing taxation benefits with total cost of company formation is as low as 750 pounds. Vat is applicable on property transactions.
The government offers a grant of 10% to Hungarian nationals for purchase of residential apartments. According to the report of Economist Intelligence Unit (EIU) ,leading non investment banking analyst, Budapest is the best city to live in with good facilities and infrastructure among the newly entered cities in the European Union .
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