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Legal News

Heirs left in the lurch at the probate hearing

napi.hu, 20.01 – Cryptocurrencies, social media profiles or documents stored in the cloud are increasingly common in probate proceedings. However, few people know that in lack of proper regulation and provisions, access to crypto currencies can be questionable for heirs, or that tech giants only allow access to deceased people’s data to those entitled to it on the basis of their own specific rules.

Digital assets, such as cryptocurrencies, business Facebook profiles or video game accounts can generate money and have a value, so it is worthwhile for everyone to think ahead about what will happen to them when their owner or user dies. If you fail to do so, your heirs may never have access to your digital assets.

The situation is complicated by the fact that digital assets are difficult to seize under current legislation. In addition, as digital phenomena change very rapidly, it is more difficult for regulation and judicial practice to keep pace.

Property and mortgage market data

napi.hu, 18.01 – More than a third of Budapest clients signed contracts for over HUF 20 million last year. Between September and December, for example, their share was 42%, which reflects an increase of 10 percentage points in 2021. The number of applications in this value range has increased steadily from quarter to quarter, to a lesser extent in the East and to a greater extent in the West. However, the HUF 10-15 million category remained the most popular throughout the year in both rural regions.

The majority of customers opted for a 20-year term: while in the country more than half of the applicants (52% and 54% in the East and in the West, respectively) went for this option, its share was 35% in Budapest. The second most popular choice was a term of 25 years, followed by the 10-year alternative. At the end of last year there were almost no mortgage applicants who had signed a mortgage for less than 5 years. The share of loans with fixed interest rates for at least 10 years showed an increasing trend throughout the year, ending at 87% in Budapest, 91% in the East and 80% in the West in 2021.

Real estate prices have increased on the back of CSOK

napi.hu, 5 October – A study shows that the family home allowance (CSOK) has not improved the birth rate, but its amount has been incorporated into the price of homes. Three quarters of the subsidy was bunt up by the price rise, and the number of people having three children has not increased even in the light of the millions of Forints granted by the state. Many people used the subsidy to buy property as an investment. The introduction of the new allowance has pushed up property prices significantly, making it even more difficult for young couples to buy a home. Only 23% of those who received state support agreed in advance to bear a child, well below the national average (33%). 77% of claimants only apply for support after a child that has already been born. More than half of them only committed to one baby, 45 percent committed to two children and only 2 percent dared to commit to having three children after receiving the subsidy. The income level of those who anticipated having a child was typically lower than that of those who already had children; for them, the subsidy was a great help in buying their own property.

How high can Hungarian house prices rise? There is still room for price rises

napi.hu, 27.09 – The Hungarian real estate market has grown exponentially over the past 10 years, and not even the economic impact of the Coronavirus pandemic has reduced house prices. Hungary is still in the middle of the pack in the European price race, but experts see further room for price increases. Let’s take a look at what the market is like in Europe’s capitals.

The house price index for the European Union shows that house prices rose by 6.1 percent in the first quarter of 2021 compared to the same period last year. The annual growth rate has never been so high since the third quarter of 2007. Compared with the end of last year, despite the impact of the epidemic, a further 1.7 percent increase in prices is forecast for the European housing market. The highest price increases were recorded in Luxembourg (+17%) compared to 12 months earlier, but were also above 10% in Denmark, Lithuania, the Czech Republic and the Netherlands. Among the Visegrád Four, not only the Czechs (11.9 percent) but also the Poles are ahead of Hungary in terms of market development: while Poland recorded a +7.2 percent increase compared to Q1 2020, Hungary had a mere +4.6 percent and Slovakia an even more moderate 2 percent.

Rent growth slowed down in August

napi.hu, 22.09 – The rise in rents slowed down in August, with rents rising by around 1 percent compared to the previous month, with 1.1 percent in Hungary and 1.2 percent in Budapest. Despite seven months of steady increases, prices were on average only 3-4 percent above the level of a year earlier, the Hungarian Central Statistical Office (KSH) said in its latest report on the KSH-ingatlan.com rent index published on Wednesday. Rents in the inner districts, which form the backbone of Budapest’s supply, rose by 2.6 percent over a year, while the most significant increase in the capital was in the transitional districts of Pest, at 5.0 percent, MTI reports. Compared to August last year, rents rose by 3.7 percent nationwide and 2.8 percent in Budapest. Compared to the low in January 2021, the average rent of apartments for rent in Budapest was about 9.8 percent higher, ranging between 7 and 13 percent per district.

There’s no going back: changes in the land registry registration procedure

napi.hu, 17.09 – After 1 February 2023, think carefully about the rights you register in the Land Registry. Under the new Land Registry Code, which will enter into force on that date, you will not be able to “change your mind” after registration, i.e. to cancel the contract on which your registered right is based and ask for the land register to be restored to its original state. Although this is a substantial tightening of the current rules, the legislative objective is not entirely clear and there are some practical difficulties to be expected. The essence of a property title transfer is that the owner transfers ownership of the property to another person, and the land registry registers the new owner in the land register accordingly. In practice, it happens from time to time that the parties change their minds afterwards for some reason and decide to terminate the previous title transfer contract.

Rents in university towns up by ten thousand forints

napi.hu, 23.08. – According to the KSH-ingatlan.com rent index, rents in several university towns increased by 2.7 percent per month in the peak summer season, but they are still below the peak values of January 2020. In several university cities, rents have risen by 10,000 forints a month. Nationally, rents in the supply market rose by 2.7 percent in August compared to June, with the capital showing a 2.4 percent increase. Compared to the low point in January this year, average rents are up by more than 8 percent. A recovery was expected and rents were also expected to rise, mainly due to the start of the summer rental season in July, with students entering the demand side after the announcement of the university entrance limit scores. Although students are basically the main demand generators in the summer months, those looking for work in the city are also playing a role in the recovery. Compared to 2015 averages, the rent index showed that national rents were 38 percent higher in July this year, while rents in Budapest were 30 percent higher, but this is still below the record high of January 2020, when both the national and the capital’s indexes were a good 40 percent higher than in 2015.

Project to alleviate Budapest housing crisis

napi.hu, 27.08.21 – Budapest Housing Agency may start its operation as soon as in 2022 to increase the pool of council properties available for rent and alleviate the housing crisis of the capital. The project is jointly run by the Municipality of Budapest, the Utcáról Lakásba Egyesület and Városkutatás Kft. with the help of international partners like the Municipal Institute of Housing and Renovation in Barcelona and Habitat for Humanity Poland. At first, the Agency would expand the pool of council housing by private rental properties. Apart from the approximately 3700 vacant municipal and district council apartments there are many unused private residential properties in Budapest. These would be rented by the Agency below market price from willing owners who would be exempt from personal income tax in return and would also be freed from the expenses and risks of renting a property. At a later stage the project would include vacant council homes, too, and, provided that the Agency can drum up EU or government funding, it would buy or construct residential units to expand the affordable pool of council housing of the capital.

What would Hungarians invest HUF 10 million in?

napi.hu, 27.08. – In a recent survey, 46% of those surveyed replied that they would invest their HUF 10 million primarily in real estate. Foreign currency is in second place, but it lags way behind. 12 percent said they would put their money in dollars or euros. Gold is in third place, 11% have the highest confidence in precious metals and only 10% of the population would buy government bonds with the money. Only 5 percent are considering riskier investments such as shares, and the same number said they would buy cryptocurrency with HUF 10 million. The latter is considered an even riskier investment than shares. On a positive note, only 3 percent of respondents said they would keep their HUF 10 million in cash, and 8 percent would have chosen some other form of investment. 54 percent of women would invest their HUF 10 million in real estate, compared to only 38 percent of men. Government bonds came second for men, but not far behind in the popularity rankings were the euro and the dollar, as well as gold. For women, foreign currency was the second most popular investment, followed by gold, and government bonds were only in fourth place.

Property market records in 2020

napi.hu, 04.01 – The property market may have stalled in 2020 but the quickest sales still happened within a single day: in Budapest a 200 square metre detached house in District 22 was sold for HUF 38.9 million within 24 hours in May 2020. Another detached house with a floor space of 110 square metres and two bedrooms on a 1000 square metre plot in Hajdúböszörmény was also sold within a day. The priciest residential property of Hungary at the moment is a residential palace on Andrássy út: its 2000 square metre, luxurious living space is located on a 1000 square metre plot and it is on the market for HUF 6 billion. The most expensive concrete block apartment was sold not in Budapest but in Siófok at Lake Balaton: the 79 square metre property fetched HUF 74 million. The least expensive home on sale, a 60 square metre derelict clay house on a 600 sq. m. plot in Négyes, a small village County Borsod, was offered for sale for HUF 300. The cheapest apartment of 2020 is on the market in Salgótarján for HUF 600,000.

Property prices to decrease in 2021

Napi.hu, 04.12. – For the next twelve months experts expect to see a residential property price decrease of 3-4% on average in Budapest. With the exception of the green belt of Buda and of detached houses market expectations have changed for the worse, i.e. market players expect that oversupply will increase in the future. In the country, however, the outlook has improved a little. In the Eastern part of the country two of three experts queried expect to see stagnation; the overall forecast promises a 3% price decrease. In the Western part of the country, on the other hand, 72% and 22% of property experts expect stagnating and decreasing prices, respectively. According to the overall prognosis the price decrease will be a mere 2%. As far as property rental fees are concerned 57% of experts say there will be a decrease, 36% expect stagnation and a mere 7% believes rental fees will increase in 2021. The expected decrease (5%) is smaller than  before.

Recent housing market data, Q2 2020

napi.hu, 05.11. – In Budapest, new flats can be bought for an average of HUF 40.3 million, HUF 2.5 million more than in 2019. The average square meter of an apartment increased from 687 thousand in 2019 to 784 thousand forints. In the county capitals of Western Transdanubia, where many new flats were sold, the average price of a new flat rose from HUF 24.4 million to HUF 27.4 million. In the smaller cities of the region the typical size of dwellings decreased, and, as a result, the average price per square meter increased from 375 thousand to 388 thousand forints, while the total average price remained unchanged. In the settlements around Lake Balaton the prices of new flats exceeded 600 thousand forints per square meter. Among the county capitals of the Great Plain, the unit price of new dwellings increased in Debrecen, which has a significant new housing market, from HUF 430 thousand to HUF 515 thousand in 2019, in Kecskemét from HUF 426 thousand to HUF 448 thousand, and in Nyíregyháza from HUF 359 thousand to HUF 378 thousand.

The price of new homes handed over in 2019-2020 was largely set in contracts concluded around 2018. For this reason, the price level of the new housing market presented here is lower than the typical asking prices of the given period and provides information only on the price development of the apartments actually handed over.

The average price per square meter in Budapest stagnated at HUF 643 thousand in the first quarter, then decreased to HUF 610 thousand in the second quarter.

Real estate market recovered

napi.hu, 06.10 – According to Q3 2020 data the real estate turnover in the Hungarian market has already recovered. Judged by the analysis of a major real estate agency the number of sales in these three months was the same, about 38 thousand, as in July-September last year. The company expects a balanced market in the last quarter of the year and the same activity as last year, which could mean 34-35 thousand sales.

According to data published by the company, 2,708 properties changed hands in September nationwide, and buyers took out residential mortgages worth HUF 75 billion. Although real estate sales fell short of September by about 5 percent year-on-year, the entire quarter saw no sign of the previous decline, and the market now shows the intensity of a year ago.

According to the company, the mortgage loan market is also showing signs of recovery, as the estimated volume of HUF 75 billion is the same as last year’s central bank data, and the market performed well on a quarterly basis, too. In the third quarter of this year, people spent a total of nearly HUF 225 billion on housing loans for residential purposes, based on estimates and central bank data.

Pandemic catches up with residential property market

napi.hu, 24 March – The Coronavirus hit the property market in a period of consolidation and its effects will undoubtedly depend on how fast and effectively the individual governments respond to the pandemic. There is a suggested (and not obligatory) quarantine, i.e. people tend to stay at home which resulted in a reduction of propensity to buy and even the number of property visits by 60 per cent compared to previous months. However, urgent sales transactions are still completed rapidly. The effects of the new virus are mostly felt in Budapest – there are significantly less inquiries. In the country, on the other hand, the market is still seeing some brisk activity and there are almost no signs of a panic. That said, the situation is changing rapidly in response to the latest news and government measures. During first couple of weeks of the month we were witnessing the usual March market slowly waking up from its winter sleep. Last week, however, the number of new inquiries suddenly fell by more than 60 per cent and also the volume of new assignments given to property agents has fallen by 30 per cent.

Coronavirus: a new age dawning on the property market

Napi.hu — The Coronavirus pandemic and the declaration of state of emergency have brought about an almost instantly perceivable change on the property market, too. There are no signs of a wide-spread and significant price decrease as yet, but there may be more and more “good buys” appearing on the market in the near future.

Personal visits will be replace by informative and relevant online advertisements and the role of real estate agents will gain importance, too.

Demand has decreased over the past few weeks but supply has increased. Also, buyers have a wider bargaining span because those who really want to sell their properties can count on 10-15 per cent less potential buyers than before the crisis.

Another reason of the decrease in demand is that some buyers postpone their purchase and “rubbernecks”, who have less serious purchase intentions, may also vanish from the market. Those who are still in the market as buyers have serious intentions and strive for a quick and effective transaction.

Apartment market: price hike stalled?

Napi.hu, 30 April 2019 – Although the annual rate of increase of apartment prices has fallen, there is still a significant hike exceeding 20 per cent in Budapest, according to the latest survey published by the National Bank of Hungary.

In Budapest, the Q4 2018 the annual acceleration rate of prices was slightly slower but still strong at 22.9 per cent. The latest apartment price index shows a slower nominal annual rate of increase of 18.2 per cent for country towns, which exceeds the figure for the previous quarter.

In small settlements, the nominal price hike was 2.3 per cent, 13 percentage points less than the national average, which indicates a further increase of the difference between smaller and larger settlements.

That said, according to the summary report published by the National Bank of Hungary, the nominal price increase was only 0.2 per cent on average in the fourth quarter of 2018, while the annual rate of increase was 15.2 per cent, compared to 16.2 per cent in the previous quarter. The national average of apartment price increase was 11.6 per cent. In Q4 2018 the national average of real price increase was 11.6 per cent.

Skyrocketing apartment prices

napi.hu, 29 January 2019 – As a result of last years’ price increases we need to work years more for an apartment, assuming we save up our entire salary. According to the calculations of a large real estate agency the price of an average apartment in a high-rise concrete block equals 8.5 years’ salary, while an apartment in a brick and mortar building costs the equivalent of 14 years’ salary. The exact figures depend on the job of the buyer, but an average concrete and a brick and mortar apartment cost 103 and 169 months’ average salary, respectively – assuming the buyer is not taking out a loan to finance the purchase.

Employees of the financial sector are in the best position here: their high average salaries enable them to acquire an apartment for 4.5 and 7.5 years’ entire wages, respectively. Naturally, their situation has also deteriorated compared to 2014. Employees in the catering industry are facing the biggest difficulties, but those in health care don’t have it easy either. They need to work 13 years for an apartment in a high-rise and 21-22 years in a traditional building. For catering and health care employees the same figures in 2014 were 8 and 14 years, respectively.

Is it worth moving to the suburbs?

napi.hu, 31. January 2019 – A recent study showed that for the price of an apartment in an old-school condominium apartment or in a popular housing estate you can easily buy a detached house in the suburbs. Apart from the price the lush, green environment and the lower coverage of built-up areas have a strong appeal.

According to another study the unpleasant side-effects of commuting to and from work pose an unexpected burden on those moving to the suburbs. The results showed that people tend to overestimate the positive effects of the suburbs and underestimate the negative impact of commuting, which are probably very difficult to get used to. A German study even expressed these burdens in monetary figures: their calculation shows that 23 minutes of commuter traffic can only be compensated by a 19 per cent higher salary. Overall, they found that commuting is evidently a serious mental and physical difficulty and also a key source of stress for people.

Which is the most expensive country town?

napi.hu, 27 December 2018 – In 2018 apartments in high-rise concrete blocks in Buda and in the Budapest conurbation sold fastest, within six weeks on average. Turnover increased by 13 per cent in the Budapest conurbation. Owners of apartments in high-rise concrete blocks in small towns had to wait for a buyer the longest, three months on average. Pre-owned apartments in Central Budapest sold for an average price of HUF 900 thousand per square metre, an increase of 11 per cent compared to 2017. The record holder among the Buda districts was District 1, with an average price exceeding HUF 700 thousand per square metre. In the country, the town with the biggest price increase was Debrecen: average prices per square metre increased by more than 25 per cent. The title of the most expensive country town in Hungary went to Sopron, where a pre-owned condominium apartment fetched a price of HUF 375 thousand per square metre.

This is how property sales are taxed

napi.hu, 18. November 2018 – Property sales are subject to personal income tax, unless you bought that property before 2013. Sales tax is payable if the property is sold at a higher price than it was bought. If the seller of the property or of an intangible asset (e.g. a usufruct) is a private person, then the earnings is subject to a 15 per cent personal income tax. The earnings equals the difference of the revenue and the deductible expenses. In the extreme fall where the expenses exceed the sales price, no tax shall be paid.

The following items qualify as revenue: the sales price, the market value of any items received in return for the property and the late payment interest paid by the buyer.

The following expenses can used to reduce the tax base: the price originally paid for the property, public dues paid in connection with the purchase, certain invoiced developments effected since the purchase that increase the value or conserve the physical repair of the property (e.g. the replacement of doors and windows, a heating system upgrade etc.), legal and consulting fees and the expenses related to the sale.