When buying a property, not only the purchase price should be taken into account, but also the obligation to pay the property acquisition tax closely linked to the purchase. The obligation to pay the duty arises as a result of the contract of sale. The acting lawyer submits the so-called B400 form together with the sales contract to the competent land registry, the tax authority determines the tax based on the market value and sends a payment order to the buyer by post. As a rule, the duty is 4% of the purchase price. It is possible to apply to the tax authorities for an instalment payment of the levy if it would be a significant burden to pay in one lump sum. The law provides several possibilities for buyers to be exempted from paying the duty.
This may be the case when buying a building plot or a new home. No duty is payable on the purchase of a plot of land suitable for building a dwelling, provided that you undertake to build a dwelling on it within 4 years. No duty is payable even if the newly built dwelling with a market value of less than HUF 15 million is purchased from the contractor (investor). No duty is payable even if the sale is between direct relatives or spouses.
In addition, the law also provides an exemption for people buying a property with a CSOK. From 01 January 2021, the purchase of a dwelling is exempt from the reversionary property transfer tax if it is made using the family home creation allowance.
In addition to the exemption from duty, the law provides further benefits for buyers and reduces the rate of property acquisition duty. Such a benefit is a replacement purchase, if a property was sold in the 3 years prior to the purchase of the new property, the difference in value between these two properties is subject to the levy, provided that the purchase price of the newly purchased property exceeds the selling price of the previous property.
The benefits also include a tax credit for young people buying their first home. When a young person under the age of 35 acquires his or her first home, only 50% of the tax that would otherwise be payable (i.e. 2% instead of 4%) is payable, provided the value of the property does not exceed HUF 15 million.
