Fraternity-Testvériség, 2002 (80. évfolyam, 1-4. szám)
2002-04-01 / 2. szám
Page 16 TESTVÉRISÉG This is the first of a four-part series on buying residences in Hungary to assist Federation members contemplating a move to Hungary. Part One discusses the general outlook for and framework of the Hungarian real estate market. Subsequent articles will explore some of the legal requirements andfinancing options open to American Hungarians who wish to buy homes in Hungary. Hungary’s National Tourist Office estimates that 360,000 Americans visited Hungary in 2001. Of those, 108,000 were American Hungarians. As American Hungarians increase their visits, many are considering moving back to the land of their ancestors. However, the distance and the many changes in Hungary generally can make buying a residence a confusing and daunting endeavor. The good news is that real estate prices may be attractive to Americans. The U.S. State Department estimated that the average price of a residential unit in Hungary was between $21,000 and $25,000 in 1998. However, like all real estate, the cost will vary widely depending on the size, location and condition of the property. Moreover, U.S. citizens and other foreigners have shown an ongoing interest since 1998 in buying residences in Hungary, according to industry analyses. And that means prices are likely to rise. Buying Real Estate in Hungary by Katalin Melamed Property sales in Budapest are popular, accounting for 15% of the estimated 11,300 residential sales to foreigners in 1998. Americans bought 5% of those homes in Budapest. The most popular locations in Budapest were the residential areas of Buda in Districts 2,11 and 12; and on the Pest side in the downtown Districts 5, 6, 7 and 8. Budapest, however, is not the most popular real estate location. The largest number of houses, apartments and holiday residences sold in 1998 were in Győr-Moson-Sopron County in western Hungary. This location puts residents relatively close to both Budapest and Vienna. Getting Permission Americans who have retained their Hungarian citizenship will have an easier time legally buying property in Hungary. In contrast, foreigners must get permission to buy homes and flats, officials from the Hungarian Embassy in Washington, DC explained. Under the Hungarian system, this permission is not provided by the national government. Instead, U.S. citizens (and other foreigners) must get permission from the authorities in the metropolitan district in Budapest or the county in which the property is located. For example, an individual wishing to buy a property outside of Budapest, but which is located in the county of Pest, would have to apply for permission from the county administration in Pest. Some of the key rules governing the sale to foreigners are mandated by Government Decree 7/1996 (1.18.). The decree empowers the local authorities to reject applications that affect farm land, real estate of historical significance and environmentally protected areas. A Caution The Hungarian real estate market differs in many fundamental ways from the U.S. system. The government decree on sales to foreigners is only one of almost two dozen laws and decrees with which foreign purchasers (and Hungarian citizens) must contend. This is in addition to the fundamental rules contained in the Hungarian Constitution. The legal complexity coupled with the time difference and the vast distance from the U.S. will require the American buyer to pay close attention to the details and gain an understanding of the Hungarian real estate system. This means that as you begin your planning, you should remember that there is no substitute for visiting the property you intend to buy and using reputable Hungarian real estate and legal professionals in the area. (Katalin Melamed is a real estate agent alfiliated with Long & Foster in Washington, DC and Northern Virginia.She can be reached at: katalin.melamed@longandfoster.com) Fraternity has published the foregoing article believing that it will be of interest to many of our readers. However, neither the editors of Fraternity, nor the Hungarian Reformed Federation of America, have verified the accuracy or currency of any information contained therein. Readers are strongly advised to obtain the benefit of competent legal counsel, both in the United States and in Hungary, before undertaking any of the transactions contemplated in this article.
