HUNGARY Law and Practice Contributed by: Attila Ungár and Júlia Várkonyi, Lakatos, Köves & Partners
Although the ratio of home ownership in Hungary is one of the highest (close to 95%), institutional housing properties might become a new asset class because of the so-called “golden visa” programme (a special investment visa requiring investment into real estate funds that also have a residential portfolio). Housing property prices have been increasing intensely but the buying power of locals has not kept pace, so a wider spread of renting is expected, thereby raising the opportunity for investors to invest in larger residential projects. Interest rates stared to decrease and bank financing is less expensive, but banks are more cautious when selecting their projects. To miti - gate risks, banks are turning towards alterna - tive projects, such as mixed-use developments (office, retail, hotel, residential within the same building complex) and renewable energy pro - The most significant reform for real estate is the ongoing renewal of the land registry system. The framework of legislation has become effective; however, the introduction of the IT background is still in progress. The introduction of the new “E-Land Registry System” is expected to cre - ate a safer, more transparent and faster system, which will allow automatic decision-making pro - cesses in certain cases. A new construction act (Act C of 2023) became effective in October 2024. There is a housing development programme in place to promote the renewal of neglected urban rust areas by encouraging development in these areas. Rust projects are classed as “priority investments in the public interest” , which speeds up and simplifies the process of obtaining the jects (primarily solar parks). 1.3 Proposals for Reform
necessary permits. The Hungarian government continuously determines rust areas, which are mostly (but not exclusively) located in Budapest. In February 2024, a new change of control rule was introduced. Accordingly, if there is a change in the direct or indirect majority ownership of a real property qualifying as a rust area after it was designated as such, then the property in ques - tion shall lose its rust area status, which may result in severe fines for the owners. An act regulating ESG requirements (Act CVIII of 2023) came into force on 1 January 2024, setting out ESG reporting obligations for so- called “public interest entities” and certain large companies registered in Hungary; fines for non- compliance with such obligations shall only be due as of 2026. The “Golden Visa” was introduced on 1 July 2024, meaning that non-EU and non-EEA citi - zens and their family members may acquire “guest investor visa” in Hungary for ten years by investing in bonds issued by certain real estate funds in the amount of EUR250,000. At this stage, only a limited number of investment products are in place. Property rights range from full ownership to con - tractual usage rights. Most property rights can be registered in the land registry. Some rights – such as ownership – are established by reg - istration, whereas others – such as pre-emption rights or options – are valid irrespective thereof. 2.2 Laws Applicable to Transfer of Title The rules for the transfer of title are contained in the Hungarian Civil Code, the Act on Real 2. Sale and Purchase 2.1 Categories of Property Rights
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