- General Size (sq.km.): 90,030
- Population: 9.9 million (Jul 2008 est.)
- Population Growth: -0.254% (2008 est.)
- Time Zone: GMT +1 hour
- Inflation: 7.8% (2007 est.)
- GDP (nominal): US$194.2 billion (2007 est.)
- GDP growth: 2.1% (2007 est.)
- GDP per capita: US$19,500 (2007 est.)
- Property Ownership Rights
- Heritage Foundation Index of Property Rights Freedoms: 70%
- Finance & Mortgage Market
- Typical LTV: 70% on resale, 80% on new-build (100% available in some cases)
- Maximum loan value: €500,000
- Staged funding: n/a
- Equity release: Yes
- Transaction Costs
- Buying: 2.61% – 7.85%
- Selling: 3.60% – 6.00%
- Income Tax on rent received: 18% – 40%
- Capital Gains Tax: 25%
- VAT on property transactions: 20% applicable to sale of land only
Property Market Features
- Low property prices
- Healthy rental yields
- Pro-landlord tenancy laws
- Established culture of property ownership within the country
- Competitive mortgage market
- Individuals need a permit to buy, which can be time-consuming to receive
- High rental income tax
- Currency: Hungarian Forint (HUF)
- Capital: Budapest
- Major cities (by population size)
Geography and Climate
Hungary is a landlocked country in the Carpathian Basin of Central Europe, with an area of 93,030 km². It is bounded to the north by Slovakia; to the northeast by the Ukraine; to the east by Romania; to the south by Serbia and Montenegro and Croatia; to the southwest by Slovenia and to the west by Austria. Hungary’s capital city, Budapest, is located in the north central part of the country.
Hungary has a continental climate, with hot summers with low overall humidity levels but frequent rain showers and frigid to cold snowy winters. Average annual temperature is 9.7 °C (49.5 °F). Average temperatures in the summer are 27 to 35 °C (81°F to 95°F) and in the winter, 0 to −15 °C (32°F to 5°F). A small, southern region of the country near Pécs enjoys a reputation for a Mediterranean climate, but in reality it is only slightly warmer than the rest of the country and still receives snow during the winter.
The President of the Republic, elected by the Parliament every five years, has a largely ceremonial role, choosing the dates of elections. The Prime Minister is elected by Parliament and can only be removed by a constructive vote of no confidence. The Prime Minister selects Cabinet ministers and has the exclusive right to dismiss them. Each Cabinet nominee appears before one or more parliamentary committees in open hearings and must be formally approved by the President. A unicameral, 386-member National Assembly (the „Országgyulé”) is the highest organ of state authority and initiates and approves legislation sponsored by the Prime Minister. National Parliamentary elections are held every four years; the next are due to be held in 2010.
Cases in the first instance usually come before provincial city courts or Budapest district courts. Appeals can be submitted to county courts or the Budapest Metropolitan Court. The Supreme Court is basically a court of appeal, although it may also hear important cases in the first instance. As of 2003, a new intermediate court of appeal was to be established between county courts and the Supreme Court, designed to alleviate the backlog of court cases.
A Constitutional Court reviews the constitutionality of laws and statutes as well as compliance of these laws with international treaties the government has ratified. The 11 members of the Constitutional Court are elected by parliament for nine-year terms; their mandates may be renewed in theory, but as of 2002, this had not happened in practice.
- Inflation rate (consumer prices): 7.8 percent (2007 EST.)
- GDP (purchasing power parity): $194.2 billion (2007 EST.)
- GDP – real growth rate: 2.1 percent (2007 EST.)
- GDP – per capita (PPP): $19,500 (2007 est.)
Foreign ownership of and investment in Hungarian firms are widespread, with cumulative foreign direct investment totaling more than $60 billion since 1989. In 2007, Hungary eliminated a trade deficit that had persisted for several years. Inflation declined from 14 percent in 1998 to a low of 3.7 percent in 2006, but jumped to 7.8 percent in 2007.
Unemployment has persisted above 6 percent. The government’s austerity program of tax hikes and subsidy cuts has reduced Hungary’s large budget deficit, but the reforms have dampened domestic consumption, slowing GDP growth to around 2 percent in 2007. The government will need to pass additional reforms to ensure the long-term stability of public finances. The government plans to eventually lower its public sector deficit to below 3 percent of GDP to adopt the euro (possibly in 2010).
For 95 percent of its population of around 9.9 million people the mother language is Hungarian, a language distantly related to Finnish and Estonian. The main minority group is Italians (2.1 percent), followed by Germans (1.2 percent), Slovaks (0.4 percent), Croats (0.2 percent), Romanians (0.1 percent), Ukrainians (0.1 percent), and Serbs (0.1 percent) A large portion of Hungary’s population is concentrated in Budapest (1.7 million). Although the population of Budapest is gradually decreasing, there is a parallel increase in the population of the surrounding small towns and villages in the conurbation. None of Hungary’s other major cities (Debrecen, Miskolc, Pécs, Szeged and Gyõr) has a population greater than 250,000.
- IPRI Property Rights Rank (0-10): 5.5, ranked 30th in the world (2007)
- Economist Intelligence Unit Quality of Life Index (1-10): 6.534, ranked 37th in the world (2005)
- Heritage Foundation Index of Economic Freedom: 67.2 percent, ranked 43rd in the world (2008)
- Heritage Foundation Index of Property Rights Freedom: 70 percent (2008) [UK = 90 percent, Spain = 70 percent]
Other Hungary property guides:
- For information on Brazil’s property law and markets, view our Hungary Property Guide: Key Facts and Markets
- For information on the purchase process and financing, see the Hungary Property Guide: Buying and Financing Guide.