What is property sales tax and duty? What to expect in 2025?

What is property sales tax and duty? What can we expect in 2025?

As a property owner, you should be familiar with the concept of "real estate sales tax"! And it's also important to know that it's not the same as a levy - as the latter is no longer the seller's responsibility, but the buyer's.

Our article will help you navigate the rules of the real estate sales tax and briefly outline what changes are expected in 2025.

What is real estate sales tax?

When you sell real estate, you have to pay personal income tax (PIT) on the resulting gain. The income is the difference between the sale price and the previous purchase price, which can be reduced by certain items, such as:

• Expenses incurred in acquiring the property (e.g. lawyer's fees)
• Costs of renovations before the sale, if they are supported by an invoice and exceed 5% of the sale price

How much is payable in detail?

The real estate sales tax, orSTAT, rate is 15%. You only have to pay it if the house, flat or land is sold at a higher price than you bought it for - as this is the only way to make a profit. As described above, the taxable amount (income) is the difference between the sale price and the purchase price.

The date of acquisition of the property also matters:

• In the year of acquisition and the following year: the entire income is taxable.
• 2 to 4 years: the taxable amount is reduced by 30% per year (90.60 then 30%)
• 5 years after: the sale of the property is exempt from VAT, no tax is payable.

What is the real estate purchase tax?

The real estate purchase tax (property acquisition tax) is a one-off liability payable on acquisition of the property and (below HUF 1 billion) represents 4% of the purchase price. Subsidised loans (e.g. CSOK, Babaváró) are completely exempt from the tax. People under 35 years of age who are buying their first home, the property is newly built and the market value does not exceed 15 million HUF will pay 50% less duty.

Want to know the exact procedure for buying a property? Click here to read this article!

Real estate tax - What to expect in 2025?

According to next year's tax package, adopted in November 2024, the rates of real estate sales tax and real estate purchase tax will remain the same in 2025. 

Some important changes to property taxation:

• The reduced 5% VAT rate for new build residential property has been extended until the end of 2026 (up to 2030 for protracted construction projects)
• Owners of monumented property will benefit from a number of tax breaks. These include exemption from tax after 3 years of sale, exemption from inheritance tax and exemption from building tax for the first three years.

New Airbnb regulation will enter into force: private accommodation with more than 2 million overnight stays in the second year preceding the year under review (Budapest only) will be subject to higher taxes. The annual flat-rate tax per room will rise from HUF 38 400 to HUF 150 000 per year.