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The expenses and taxes of the seller of a property in 2017

The expenses of the seller of a property according to the Civil Code and common practice.
  •  Personal Income Tax ( tax rate 15% )
  •  expenses connected to the conveyance, eg. payment of debts for public utilities
  • expenses connected to the registration of the correct conditions in the Land Registry,eg. mortgage delition

When do you need to pay personal income tax?

The sale of a flat, a house or other type of property ( eg. building plot ) means an obligation for the seller on the base of the income realised form the sale.
You are obliged to pay personal income tax after a flat or a house only if you purchased the property  less than 5 years ago.
For other types of properties which were bought more than 5 years ago the income reduced with the expenses for the property must be diminished proportionately to the time of its purchase.

How much is the personal income tax to pay?

When you sell a property, the personal income tax rate to pay is 15%. However to judge the right sum as a base there are some rules to follow.
First of all from the price you get for the property ( flat, house or other type of property ) you have to deduce the following figures ( an official document is needed as a proof )
  • the sum for which the seller bought the property
  • the expenses connected to its purchase ( eg. dues paid )
  • investments made to increase the value of the flat ( eg. refurbishment, enlargement, building a fence, etc… )
  • expenses connected to  the sale of the right for the property ( eg. price of advertisements )
You can not consider as expense  to be deduced those expenses that the owner has already deduced as an expense earlier oppositely to his/her previous income in connection with one of his/her activities.

Properties for habitation

In case of  the sale of a flat or a house after you have deduced the above mentioned sums you have to diminish the figure further according to the following, depending ont he time of acquisition:

Year of acquisition Percent  to be deduced
2016. 0%
2015. 0%
2014. 10%
2013. 40%
2012. 70%

After the fifth year from the acquisition there is no personal income tax to pay.

Properties not for habitat purpose

For properties of other type ( eg. building plot ), the personal income tax can be diminished as the following after the deduction of expenses ( the following year after the acquisition is considered to be the first year )
  • when selling the property between the first and the fifth year, 100 % of the  whole sum received after the deduction of the expenses must be considered as  the base for payment
  • in the fifteenth year after the acquisition and afterwards there is no personal income tax to pay.
 If you purchased the property that you sell 6 years before its sale, this will reduce the value to be taxed by 10%. This way of calculation proceeds in the following years reducing the sum with 10% per year up to fifteen years when the payment obligation ceases.

No income derives from the sale of the sale of the property  if the selling price of the property is less or the same as its purchase price was or int he case of purchases made before 2001 or before.
The date to be considered as the date of purchase is the date when the valid contract about the sale arrives at the Land Registry Office. 

The income deriving from the transfer of property is considered to be acquired on the day when a valid document about it arrives at the property authorities ( deed, deliverance issued by the tribunal or authorities ).