Pros for obtaining a property in Hungary
Hungary has strategic location in the heart of Europe and it's climate can be called south-central (great weather from March to mid-October). Wizzair - the Hungarian airline - offers connections to hundreds of destinations across Europe every day; including over 30 flights to London daily. Real estate prices are fairly moderate 1.5-3k EUR/m2 and the growth yield is around a reasonable 6%. Tourism over the 25 years - increased from 3 to 9 million visitors per year. The economy is stable; national debt is dropping while the growth is around 5% annually. Unemployment rate is very low - 4.5%. Budapest is a great expat center - EU citizens, Russia, China, and other countries. Hungarian passport offers visa free travel to all Schengen countries, US, New Zealand, UK and Australia and Canada. Healthcare and educations systems are quite good.
Residence permits on the grounds of owning real estate
Personal investment in property: at least 250,000 EUR investment is required. Incorporating a company can keep the costs lower, but it is not a solution for a single property ownership.
Residence permits on the grounds of company formation
Setting up a company to own the property and generating revenues on leased properties is possible; the minimum investment threshold is 180,000 EUR. The company can be involved in other areas of business as well apart from property management. Rental income tax: you can choose 10% of the gross income or 15% of the net income; you can deduct the costs for the tax office.
Other residence types in Hungary
Foreign investment program for overseas entrepreneurs - though business formation: 50,000 EUR is required but you cannot become an EU national before applying on this type of visa. The business owners become the controllers and as hired employees pay taxes. There is no way for obtaining residency based ion the investment scheme of government bonds residency program - suspended in 2017.
Which residence permits offer a path to permanent residency and citizenship?
All the previously mentioned programs open the path to permanent citizenship after 8 years of temporary residency.
Restrictions & Challenges
Buy-sell cost is around 10%. Taxes at purchasing the property are: stamp duty - 4%, VAT 20%, legal costs - 1%. Non-EU citizens need to pay additional 200 EUR is the cost of a permission fee. Capital Gains Tax - 15% which can be decreased; the longer you keep the property the lower the tax; there is no CGT after 5 years of owning the property. After 8 years of holding temporary residence the applicants can go for Citizenship, together with their dependents such as the Spouse and children aged 18 and less. Passing a language test in required.