The best kept secrets of the Budapest real estate market.
Did you hear that Budapest won the Best European destination 2019 award according to EBD tourist organization?
Euromonitor International says that Budapest preceded Peking in 2018 what concerns its number of foreign visitors. While it was 3 million 766 thousands in the Chinese capital, Budapest was visited by 4 million 4 thousands tourists last year. The number of nights spent by tourists in Budapest increased by 58% since 2010 and it continues. In the Central-Eastern European region the leading cities, Prage (9 million tourists a year) and Vienna (6,3 million) – which is followed by Budapest at the 3rd position – shows us the growth potential for the Hungarian capital in the future!
How tourism effects your property investment? You can benefit from it in a direct way to rent your apartment on Airbnb but in any case you will benefit from the growth of the economy driven by tourism. The increasing number of tourists need a variety of services which will generate more workplaces, more development works, more potential tenants.
Budapest is beautiful. Budapest is safe. Budapest is liveable. Budapest is booming.
Last but not least, Hungary has the lowest tax level on property in the entire Europe. It has the highest VAT, but that is not so much of importance when you invest into real estate. More relevant that stamp duty due at the purchase of a property has a flat rate of 4%. You pay the same rate no matter how much you pay for the property while in many EU countries it gets significantly higher with a more expensive apartment. Annual tax for those owners who do not live permanently in the apartment is charged in most districts. Its amount is around 5 EUR/sqm/year. When selling your apartment, the capital gains tax is only 15% which is decreasing already from the 1st year after the purchase. After keeping an apartment 5 years, you can sell your apartment taxfree! I just read that in Germany you pay 25% CGT tax for 10 years, in the UK you pay 18% or 28% depending on the tax bracket you are. Here you sell by paying zero tax after 5 years.
At the start of my career, my ex Irish boss kept saying that these benefits of investing in Budapest should not be kept in secret!