Opportunities for residency through real estate investment in Europe have dwindled in recent years, to the dismay of overseas buyers. Many Golden Visas have been taken off the market, with Ireland having scrapped its program last year, and Portugal set to do so within the next couple of months. With this, investors are in want of new routes to EU residency; Enter, Hungary.
Hungary only introduced its new Residency-by-Investment visa program this year and it still remains largely under the radar. Many investors are yet to discover the program, which grants non-EU investors residency in Hungary, along with access to all 27 countries within the Schengen Area. With the closure of Portugal’s Golden Visa looming, its timely entrance is a blessing for investors eager to acquire EU residency.
Prior to 2017, Hungary offered the Hungarian Residency Bond program which required a minimum investment of €300,000. At the end of the five years, investors received their capital back in full, with no returns. Now, though, Hungary has emerged with a simpler and more affordable route to residency for overseas property buyers.
An Affordable Option for Buyers
One of the most attractive things about the new visa in Hungary is its price point. Many of the Golden Visas in Europe come at a hefty cost, but Hungary has emerged with an affordable alternative. Its new visa program, launched this year, is one of the cheapest routes to EU residency on the continent for property investors.
To qualify, applicants must buy any completed residential property worth more than €155,000 EUR. Alternatively, foreign investors can establish a company in the country which provides services or trades with goods. Both routes grant investors a temporary residence permit for themselves and their family members. Those that invest in real estate can acquire a permit lasting 5 years, whilst those that establish a company can remain in the country for up to 3 years.
Visa holders can renew their temporary residence permit indefinitely, granted they have spent 60 days within the Schengen Area 183 days before the visa is renewed.
Visa holders are not entitled to work in Hungary under the “other purpose” temporary permit, but if you make your intention to work known during the application process, you may be able to switch to an “employment purpose” permit.
If the visa holder spends three years in Hungary without interruption—excluding occasional holidays—they can apply for a permanent residence permit.
An interrupted seven-year stay in Hungary qualifies visa holders for citizenship and a Hungarian passport—which grants full working rights—although applicants must also complete a Hungarian language exam.
Applying for the Visa
Applications are submitted by the Hungarian embassy in your country of residence and will include:
- A motivation letter
- A Hungarian address (this can be a nominal address or hotel booking)
- Health insurance
- Proof of bank account funds totalling €10,000.
It takes around 2 months on average to obtain your residence permit. For new build properties, investors can apply before the property is completed as an agreement is already in place.
Why Hungary?
Boasting a high quality of life along with some great investor incentives, Hungary is a very attractive place to live and own property.
The country offers a stable economy and thriving business environment, combined with developed infrastructure and a strong inflow of tourists. It bustling capital city, Budapest, has seen its status as a tourist destination and commercial hub grow rapidly over the past few years.
Subsequently, property owners in Hungary can enjoy a high quality of life for a low cost compared to other parts of Europe. Both the cost of living and the price of real estate are relatively affordable, making Hungary the ultimate destination for expats and those in the market for a second home.
And what about the benefits for investors? Hungary’s corporate tax rate on profits is only 9%, which is the lowest rate in the European Union. Its personal income tax is also one of the lowest on the continent, at just 15%, and there is no tax on dividends or capital gains.
The Property Market
Capital appreciation in Hungary has been significant in recent years. According to CEIC data, house prices jumped 23% year-on-year in September 2022, following a record-breaking increase of 24.3% in the previous quarter.
Despite this, property remains very affordable compared to other parts of Europe, particularly in the capital.
The value of newly built apartments in Budapest has increased by over 30% in the last couple of years. However, prices remain much lower than those of other capital cities. In the city centre, newly built apartments cost 5,700 EUR/sqm in Budapest, compared to 12,000 EURO/sqm in Vienna, 16,000 EURO/sqm in Berlin, 15,000 EURO/sqm in Frankfurt, and 8,000 EURO/sqm in Prague.
If you’d like to be one of the first to obtain EU residency through Hungary’s new visa, we have the perfect opportunity. Spirit Residence is being built at a popular site in one of the most rapidly evolving districts of Budapest. The 8-storey development comprises 210 apartments ranging from 27 sqm studio apartments to 99 sqm penthouses. Investors can obtain EU residency with investments over €155,000 and own an apartment in the heart of Budapest.
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and contact us today to secure your perfect property.
