Selling real estate is not only an important life event but also a process that is inevitably tied to tax obligations. This is especially true in Hungary, where the tax system strictly regulates residential property transactions. However, there are legal ways to reduce or even avoid paying taxes. The key is understanding how the tax legislation works and what nuances are important to consider.
When does the tax obligation arise?
According to Hungarian law, when selling real estate, an individual may be required to pay capital gains tax. This tax is charged on the difference between the purchase price and the sale price of the apartment. However, if you have owned the property for a sufficiently long time—five years or more—the amount of tax can be significantly reduced or even eliminated altogether. This rule was introduced to encourage long-term property ownership.
Nevertheless, if you decide to sell the apartment before this period ends, it is essential to plan ahead and understand which legal mechanisms can help minimize your tax burden. This is especially relevant for those who received the apartment through inheritance, as a gift, or in a divorce—these situations may come with specific conditions and tax reliefs.
Main ways to reduce the taxable base
Accounting for improvement costs
One of the most effective tools is including all documented expenses related to improving the apartment in the tax base calculation. These may include major renovations, installation of a new heating system, window replacement, or reconfiguration of the layout. All of these expenses reduce the difference between the purchase and sale price, and therefore the tax amount.
The key is to keep receipts, contracts with contractors, and records of completed work. The more documented investments you have, the lower the tax. For example, if you bought the apartment for 20 million forints and sold it for 30 million, the tax would be applied to a gain of 10 million. However, if you invested 5 million in renovation and can prove it, the taxable base becomes 5 million.
Living and registering in the apartment
If you not only owned the apartment but were also officially registered there as your residence, this can influence taxation as well. Long-term registration at the property being sold is often viewed by the tax authority as proof of personal use rather than an investment goal, which offers additional tax benefits.
Price indexation
Hungarian law allows you to take inflationary changes into account if the apartment was purchased a long time ago. This means you are not required to pay tax on the nominal price increase caused by inflation. This is particularly relevant during periods of high inflation, when the actual income from the sale can be much lower against the backdrop of rising prices on everything—from groceries to digital entertainment.
In fact, such inflationary trends in recent years have led many people to seek additional sources of income—especially online. Some opt for digital investments, while others prefer more relaxing formats like participating in tournaments or games on online entertainment platforms, such as online casino oldalak, which feature various types of games from leading global providers. It’s not only a way to take a break from routine calculations but also a chance to test your luck. However, taxation on winnings is a different story.
What should you know about timing and documentation?
The five-year rule and its specifics
If you’ve owned the apartment for more than five years, you are exempt from paying capital gains tax. The five-year period starts from the date the purchase agreement is signed and notarized or registered in the land registry. For secondary properties, it’s also important to consider the date the building was first put into operation.
However, if you sell the apartment before the five-year period ends, the tax rate may vary. In the first few years after purchase, it can be as high as 15% of the profit but decreases each year.
Document preparation
To take advantage of all the benefits, it is important to submit a full set of documents to the tax office: the purchase and sale agreement, receipts and invoices for repairs, documents confirming residence registration, and, if necessary, extracts from the land register. Mistakes or missing documents can result in the tax amount being recalculated upwards.
Savings examples: what does this look like in practice?
Imagine you bought an apartment for 25 million forints, invested another 3 million in renovations, and sold it four years later for 32 million. Without taking renovations into account, the tax would be calculated on a gain of 7 million. But with valid documentation for the renovation costs, the taxable base drops to 4 million. That’s nearly a 50% tax reduction—completely legal and transparent.
If you sold the apartment after six years of ownership, no tax would be charged at all. And if you lived in the apartment and were registered there the entire time—even better.
Conclusion: knowledge is your best protection
Selling an apartment is not only an opportunity to make a profit but also a chance to approach taxation wisely. Hungarian law provides flexible mechanisms to reduce tax burdens if you handle the process correctly. Taking full advantage of deductions, properly documenting expenses, and tracking ownership duration—all of these will help you retain a significant portion of your earnings.
And in your free time, nothing stops you from enjoying your favorite pastimes—be it reading, sports, or unwinding on entertainment platforms. Even ones where you can test your luck and feel the thrill—of course, sensibly and within the bounds of the law.