Buying Property in Hungary: Key Checks for Buyers

Buying real estate in Hungary involves a number of legal steps that, if overlooked, can expose a buyer to serious financial and legal risk. Below we outline the key checks our firm carries out on behalf of every buyer we represent.

Always sign on the basis of a same-day title extract

The purchase agreement should always be executed on the basis of a fresh, certified title extract (e-tulajdoni lap) obtained on the day of signing. Our firm obtains a certified electronic title extract on every transaction so that the data in the agreement matches the current state of the land registry exactly — not what it looked like last week or last month.

Buy encumbrance-free — or protect yourself properly

Check the title extract carefully for any encumbrances:

• Usufruct (haszonélvezeti jog): if a third party holds a right of use over the property, this must be formally released before or at completion, or an appropriate purchase price reduction must be agreed.
• Mortgage (jelzálogjog): if the property is mortgaged, the relevant portion of the purchase price must be paid directly to the lender bank to secure a discharge. A competent lawyer will structure the payment mechanics so the mortgage is released in exchange for the funds.

Deposit or advance payment — know the difference

Under Hungarian law, the choice between a deposit (foglaló) and an advance payment (előleg) has significant consequences:

• Advance payment (előleg): if the deal falls through for any reason, the advance is returned to the buyer.
• Deposit (foglaló): if the deal collapses through the buyer's fault, the buyer forfeits the deposit. If the seller is at fault, the seller must repay double.

Choose whichever instrument fits your risk appetite — but make sure it is clearly labelled in the contract.

Escrow: when and why it matters

Some Hungarian real estate transactions require escrow arrangements:

• Document escrow (okirati letét): used, for example, when the registration permit for transfer of title is held by the lawyer pending payment.
• Cash escrow (pénzletét): required when the buyer's financing bank instructs funds into the lawyer's client account rather than directly to the seller.

These structures protect both parties and are standard practice in professionally handled transactions.

Choose a lawyer you trust — and involve them early

Under Hungarian law, a real estate purchase agreement must be countersigned by a lawyer to be valid for land registry purposes. But the lawyer's role should begin well before the signing: reviewing the title, structuring the payment schedule, and coordinating with any financing bank.

Our firm handles every transaction from the initial consultation through to registration of title. Contact us to discuss your purchase — we are happy to advise you before you commit to anything.