Property Sale Tax in Hungary 2026 – The 5-Year Rule Explained

The 5-year rule – the most important fact

In Hungary, gains from property sales are subject to 15% personal income tax (PIT). However, annual reduction multipliers significantly reduce the tax burden:

This means if you have owned the property for at least 5 years, the sale is completely tax-free.

Concrete examples

Example: Bought for HUF 30M, sold for HUF 50M, owned 3 years

Example: Waiting for the 5-year threshold

What costs can be deducted?

• The purchase price stated in the sale and purchase agreement
• Stamp duty paid at acquisition
• Legal and notarial fees
• Documented value-adding renovations
• Energy efficiency improvements (solar panels, insulation etc.)

The five-year rule explained

One of the most important rules of Hungarian property taxation is that the taxable portion of income from a property sale decreases with the number of years elapsed. In the year of acquisition and the following year, the entire profit is taxable, then it decreases year by year: from the fifth year after acquisition, the sale becomes completely tax-free. This means anyone who has owned their property for at least five years pays no personal income tax on the sale profit.

The reduction is tiered: 100% of the profit is taxable in the year of acquisition and the first year, 90% in the second year, 60% in the third, 30% in the fourth, and 0% from the fifth year. Importantly, the years are counted as the difference between the year of acquisition and the year of sale, not as calendar years. If you bought in 2021 and sell in 2026, five full years have passed and the transaction is tax-free.

Which costs can you deduct?

The tax base is not the sale price but the profit — the sale price minus the acquisition cost and documented expenses. The acquisition value is the purchase price evidenced by the contract. On top of that, you can deduct many costs that reduce the tax base.

Deductible costs include the property transfer duty paid at acquisition, legal fees, the documented cost of value-increasing investments (such as renovation, modernisation, or extension), and expenses related to the sale, such as real estate agent commission or the energy certificate fee. All of these require an invoice or contract, so it is worth keeping every document.

When must you pay and declare?

Income from a property sale must be included in the personal income tax return for the year of the sale, which must be submitted by 20 May of the following year. The tax must be paid by the same deadline. The draft tax return prepared by the authority does not automatically include the property sale, so you must add it yourself.

If you acquired the property more than five years ago, you have no filing obligation, since the income is tax-free. For a sale within five years, however, the transaction must be reported even if deductible costs mean no taxable profit ultimately arises — the zero tax base must also be documented.

Frequently asked questions

How is an inherited property treated on sale?

In the case of inheritance, the date of acquisition is the day of the testator's death, and the acquisition value is the value established in the probate procedure. The five-year rule counts from here, so if five years have passed since the death, the sale is tax-free.

What about a gifted property?

For a gift, the acquisition date is the date of the gift contract, and the acquisition value is the value serving as the basis of the duty. The five-year rule applies in the same way.

If I sell at a loss, do I still pay tax?

No. If the sale price is lower than the combined acquisition value and deductible costs, no taxable income arises, so no tax is payable.

Worked calculation example

Suppose you bought a flat in 2023 for 30 million HUF and sell it in 2026 for 50 million. The gross profit is 20 million. You paid a 4% transfer duty of 1.2 million at acquisition plus 150,000 HUF in legal fees, spent 2 million on renovating the bathroom and kitchen with invoices, and paid 500,000 HUF in agent commission on sale. Total deductible costs are 3.85 million, so the calculated income is 16.15 million. Since acquisition was in 2023 and the sale in 2026 — the third year — 60% of the income is taxable, giving a tax base of about 9.69 million and a 15% tax of roughly 1.45 million HUF. Sold in 2028, the same property would be entirely tax-free.