Real Estate Lawyer in Budapest, Hungary
I have the right person for you. His law firm has successfully represented me in quite a few real estate transactions in Budapest. It also represented family friends of mine and cut two transactions short, which were deemed too risky for the buyers (my family friends), thus potentially saving them A LOT of grief.
We’ll address the following:
1. Why you need a good real estate lawyer in Budapest, Hungary
2. What are some of the expected government fees that you are expected to pay when purchasing real estate in Budapest, Hungary
3. My lawyer’s fee breakdown
1. Why you need a good lawyer for your property transaction in Budapest
- Hungarian is completely unintelligable unless you speak the language. My lawyer will draft a bilingual English/Hungarian contract.
- Your lawyer should ensure that there are no liens on the real estate nor any outstanding debts related to the property such a home owners association fees, electricity, water, etc.
- Your lawyer can enable you to pay for the real estate using an escrow account in order to garantee everyone’s safety. Essentially, you transfer the purchase price to his account, and only once all verifications have been done and everything is deemed to be fine will he transfer the money to the seller.
- IMPORTANT: Never use a lawyer proposed by your real estate agent. This point is valid for any international market in which you choose to invest. The reality is that there can be a conflict of interest in such cases. Though you are officially the lawyer’s client, who is more important? You and your single transaction, or the agent that brings dozens of clients? Using your own lawyer won’t be more expensive, but will offer you much more security.
2. A few important points you should know before buying real estate in Budapest, Hungary
- There is a stamp duty tax of 4% of the value of the transaction.
- There is a title transfer fee of about HUF6,600 (less than $20)
- IF you do not have an EU citizenship, you must get a foreigners purchase license. The process takes about 2-3 months and costs HUF50,000 (+-$150). It is granted in over 99% of cases.
- BEWARE: The typical process is that you pay 10% into the escrow account after having sign a “pre-contract”, and if the lawyer then validates everything you must transfer the 90% before a deadline. Typically this deadline is two weeks. If you are a foreigner, negotiate for 4-5 weeks at least IN CASE you have issues with your bank. In many cases the compliance department of your bank back home might be worried about large transfers to Hungary and block the transfer until due diligence is done. If due to this you miss the deadline, then you lose your 10%. Hungarian sellers have been known to gladly pocket the 10% and then sell the real estate to someone else.
- This is alo why an English contract is a must for banking purposes.
3. My lawyer’s fee structure
He’s really good, speaks English fluently, and his law form has helped me with numerous transactions and ensured family friends of mine did not get played in two real estate transactions in Budapest, Hungary.
Lawyer fees for a real estate transaction in Budapest, HungaryFull package
- Drafting a bilingual English/Hungarian contract
- Checking the title deed for proper ownership, liens, and claims
- Declaration with tax authorities for the stamp duty
- Legal help with application for foreign purchaser license (non-EU)
- Checking home owners association documents to look for debt or major issues
- Following up to ensure your name gets properly registered on the title deed
- Escrow services for the transaction
- Power of Attorney if needed
- Value Added Tax (VAT) must be added to the 1.2%
DISCLOSURE: If you look hard enough you can find lawyers who will charge 0.8%+VAT of the transaction value. However, you might not get a bilingual contract, which is problematic for your understanding and for banking. Also, my lawyer works on multi-million commercial real estate deals, so he is highly competent and respected in his field.
In all my real estate deals overseas, I’ve learned one thing: don’t cheap out when it comes to the lawyer. It’s just not worth it.
Send an email to email@example.com or contact me below to get introduced to my real estate lawyer in Budapest, Hungary.
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Important to understand: The real estate legal services are performed by a lawyer. We at The Wandering Investor are a middleman and therefore have no liability.