Costs for property owners: Hungary and Germany in comparison
In this article we publish figures and diagrams on the topic of “costs for property owners” and compare Hungary, specifically Budapest, with Germany or other European cities and countries. It shows why many owners in Hungary are very relaxed about owning an empty apartment, as the additional costs (which also apply to an empty apartment) are so low.
1. Additional housing costs in comparison between Germany and Hungary
What exactly are consumption costs?
Consumption costs typically include expenses for electricity, gas, water and internet. These costs are essential for daily use in an apartment and vary depending on consumption and local tariffs. In Hungary, consumption costs are often kept comparatively low due to government subsidies for private households, which is advantageous for tenants and homeowners.
What does the house fee include?
The house allowance covers various costs that arise in connection with the operation, maintenance and management of the residential building. The additional costs that can be included in the house fee include:
- The costs of property management
- Caretaker, repairs and maintenance of common property
- Building and liability insurance: Insurance that can cover the building itself and liability claims.
- The cost of lighting common areas in the residential building.
- Expenses for cleaning shared hallways and stairwells.
- Garbage collection: Provision and collection of various bins, including household waste, plastic and paper.
- In Hungary it is often the water still in the house money included, as many apartments do not yet have their own water meter,
Additional housing costs in Germany since the energy crisis
The average amount of additional costs is: first-hausverwaltung.de between 3 and 4.50 euros per square meter per month Additional costs: What does the tenant pay? Your guide – N26 It's even just under 5 euros.
During an investigation of the IW Cologne The cold and warm additional costs have been determined since the energy crisis, and the following emerged for apartments in large cities:
- The seven largest German cities were recently located cold operating costs at 2.11 euros per square meter and month. However, from the owner's perspective, the maintenance reserve would also have to be taken into account. It is estimated that we are dealing with a total of 2.5 euros per square meter. (200 euros for 80 sqm)
- The warm operating costs (= heating, hot water) are around 2 euros. For 80 square meters that would be 160 euros, to which electricity (80 euros) and internet (30 euros) must be added. That would be around 3.5 euros / sqm (280 euros for 80 sqm)
For an 80 square meter apartment in a major German city, this would mean that the monthly additional living costs including consumption would be around 480 euros.
Additional housing costs for apartments in Budapest
In Hungary, real estate portals such as ingatlan.com Insights into the average consumption and additional costs of apartments. Due to the state subsidization of electricity and gas prices for private households, but also due to the very low administration costs, an 80 square meter apartment in downtown Budapest has consumption costs of just under 100 euros (for electricity, gas, water, internet), as well as a monthly house fee including maintenance reserve of around 80 euros.
However, there are also sometimes clear upward deviations, for example in the case of very well-maintained, listed buildings in the inner districts that are equipped with a modern elevator, or if a WEG has decided to increase its maintenance reserve in order to save money more quickly for an overdue renovation.
More about We have put together the topic of subsidized electricity and gas prices here.
Conclusion and impact for short-term rental
The bottom line is 480 euros in Germany vs 180 euros in Budapest, Hungary. These are 300 euros less costs per month. This is not only positive for tenants, but is also particularly relevant for short-term rental: Since the landlord has to cover 100% of the additional costs in this scenario, a cost of 300 euros per month is a significant difference that can completely destroy the return.
2. Additional purchasing costs in comparison between German federal states and Hungary
When buying a property, in addition to the actual purchase price, there are also various additional purchase costs. These additional costs may vary depending on the state and individual agreements, but in general the following types of additional purchase costs may apply.
1. Real estate transfer tax: The real estate transfer tax is a tax that is incurred when purchasing real estate and must be paid by every buyer. The amount of property transfer tax varies depending on the federal state in Germany. For example, the property transfer tax in North Rhine-Westphalia is currently 6.5% of the purchase price. In Hungary it is 4% nationwide. As a rule, there is no further property tax to pay afterwards, at least we don't know anything about Budapest.
2. Notary fees: The notary costs arise for the certification of the purchase contract by a notary. These costs include the fees for notarization as well as for the certification of signatures and the creation of documents. The amount of the notary fees depends on the purchase price of the property and is set by law. In combination with the costs of the land registry office, you should calculate 2% in Germany. Lawyers take between 0.5% and 1.5%. We expected 0.75% here for a German-speaking lawyer.
3. Land registry costs: The land register costs arise for the registration of the new owner in the land register. These costs are also borne by the buyer and depend on the purchase price of the property and the fee schedules of the respective federal states. In Hungary, the land registry costs are negligible at just under 20 euros.
4. Broker commission: If a real estate agent is involved, there are brokerage commissions, which in Germany have to be paid by both the buyer and the seller. In some cases, the seller can also cover the broker's commission entirely. The amount of the broker's commission is not set by law and can be freely agreed, but is usually between 3% and 7% of the purchase price.
The exact costs may vary depending on the state and individual agreements.
3. Speculation period for real estate in Hungary
What is the speculation period for real estate?
The speculation period determines the period within which you have to pay speculation taxes when selling a property. It begins from the time the property is purchased and ends with the sale. The duration of this period depends on whether you use the property yourself or rent it out:
A speculation period of ten years applies to rented properties. This means that if you rent out a house or apartment, you have to pay speculation taxes within ten years of selling it. After this period, the tax obligation no longer applies.
For owner-occupied properties, the speculation period is only three years. If you lived in the house or apartment in the three years before the sale, you do not have to pay speculation tax. This regulation also applies if the property is only used as a second home or holiday apartment as long as it is not rented out.
How high is the speculation tax in Hungary?
In Hungary, the speculation tax on real estate is called “income tax on capital gains”. The calculation of this tax depends on various factors, including the profit from the property sale and the seller's personal income tax rate.
Here is a basic explanation of how the speculation tax on real estate in Hungary is calculated:
Determination of profit: The profit from the sale of real estate is calculated by reducing the sales price by the purchase price of the property and by all demonstrable costs associated with the sale. These include, for example, broker fees and renovation costs.
Determination of the income tax rate: The profit is then subject to the seller's personal income tax rate. The income tax rate varies depending on the level of income and can reach a maximum of 15%.
Payment of the tax: The speculation tax is calculated on the determined profit based on the seller's personal income tax rate and must be paid to the Hungarian tax office within the specified deadlines.
It is important to note that in Hungary there may be certain exceptions and peculiarities that may affect the calculation of the speculation tax. It is therefore advisable to consult a tax advisor or tax authority to find out the exact tax regulations and obligations that apply to the specific property sale.
Sources: speculation periods and taxes in Czech Republic | France | Germany
