Real Estate Law Made Simple – Key Legal Facts for Buyers and Sellers

Buying or selling property is one of the most significant financial decisions in life.

Understanding the basic legal rules is essential to avoid risks and ensure a smooth transaction.
Below is a practical overview of the most important aspects of Hungarian real estate law explained simply.

1. The sales contract – the foundation of the transaction

Every property sale must be completed through a lawyer-certified sales contract.
This document defines the purchase price, payment terms, transfer date, and rights and obligations of both parties.
Clear and accurate wording is essential to avoid future disputes.

2. Title deed and encumbrances

Before signing, the property’s title deed must be checked. It shows:

the current owner(s),
any existing encumbrances (mortgage, usufruct rights, etc.),
the official plot number and property details.
Buy only encumbrance-free properties — or make sure that any burdens are legally resolved before purchase.

3. Deposit vs. advance payment

A deposit is legally binding:

if the buyer withdraws, they lose it,
if the seller withdraws, they must return it double.
An advance payment, however, is refundable if the sale fails.
Always specify clearly in the contract which one applies.

4. Registration of ownership

Ownership only becomes official once the Land Registry records the new owner.
This process is handled by the lawyer and takes about 30 days.
Until registration, the buyer appears on the preliminary record, granting legal protection.

5. Taxes and duties

The seller may owe income tax on capital gains if selling within 5 years.
The buyer must pay a 4% property transfer tax, with certain exemptions available for first-time buyers or new builds.

6. The lawyer’s role – legal safety for both sides

A lawyer’s involvement is both mandatory and crucial for legal security.
They verify the title, prepare the contract, manage payments, and ensure that the entire process complies with Hungarian law.

Summary

Real estate law doesn’t have to be complicated.
With proper legal support and preparation, a property transaction can be safe, transparent, and efficient.
The key takeaway: never compromise on legal security — it’s your best protection.