Property Management for Foreign Owners | Budapest

Property Management for Foreign Owners: Remote Management, Taxation, and Legal Essentials in Budapest

An increasing number of our clients from London, Vienna, Tel Aviv, or New York own real estate in downtown Budapest — many of them without living in Hungary. Distance is no longer an obstacle: with the right expertise and local support, tax and legal matters, as well as the daily operation of the property, can be managed securely, meaning the owner does not need to be constantly present in Budapest to generate income from their property. In this guide, we summarize the most important information for owners living abroad who wish to rent out their Budapest property.

Why is the Situation Different as a Foreign Owner?

One of the core principles of Hungarian tax law is that income from real estate is always taxed where the property itself is located — regardless of where the owner has their tax residency. This means that income earned from renting out a Budapest apartment is taxable in Hungary, even if the owner lives abroad and pays taxes on their other income there.

The good news is that Hungary has concluded double taxation avoidance agreements with numerous countries — including most Western European nations and the United States — so the same income is, in principle, not taxed twice.

How is Rental Income Taxed?

Here are some basic rules worth knowing:

• Flat 15% Personal Income Tax (PIT). Income from renting out property is subject to personal income tax, and the rate is 15%, regardless of whether the owner is a domestic or foreign resident.

• Two accounting methods are available. The simpler option is the 10% expense ratio, where 90% of the revenue is taxed without needing to present invoices. The other option is the itemized expense deduction, where actual, invoice-proven costs of renovation, maintenance, or depreciation reduce the tax base — this can be particularly advantageous for renovated apartments with higher maintenance costs.

• No social contribution tax (SZOCHO) applies to long-term rentals, which significantly reduces the total tax burden compared to short-term rentals.

• No VAT needs to be calculated, and as an individual, obtaining a tax number is not mandatory either, unless the tenant is a company requesting an invoice, or if the owner decides to register for VAT voluntarily.

• Foreign resident owners are not subject to the health contribution obligation, which burdens domestic owners in certain cases.

What to Pay Special Attention to as a Foreign Owner

There are two administrative tasks that, in our experience, foreign owners omit most frequently:

1. Filing the annual tax return independently. The Hungarian Tax Authority (NAV) does not automatically generate a draft tax return for non-resident taxpayers; therefore, the return must be prepared and filed by the owner (or their representative) before the deadline — typically by May 20th of the year following the tax year.

2. Quarterly tax advance payments. If the tenant is an individual, the tax advance must be paid quarterly by the owner. However, if the tenant is a company (a so-called payer), calculating and paying the tax advance is the tenant's responsibility.

Missing these deadlines can lead to penalties and late payment interest — this is exactly the area where a local property manager can save the owner from the most headaches. 

Midas Management provides full support in this area as well: for our clients, we also handle tax returns related to property utilization, allowing owners to keep all administrative tasks in one place. 

Long-Term Rental Instead of Short-Term Rental — Why are More and More Owners Choosing It?

In recent years, the regulation of short-term rentals in Budapest has changed significantly. Currently, between January 1, 2025, and December 31, 2026, a moratorium is in effect on the registration of new short-term accommodations across the entire capital. Additionally, in the 6th district, a complete ban has been implemented from January 1, 2026, while in the 5th district, only previously authorized and registered properties are allowed to continue operating. 

This regulatory environment encourages many owners to pivot from short-term rentals to the more predictable, professionally managed long-term rentals — where a single reliable tenant lives in the property, wear and tear is reduced, and there is no need for daily operational presence.

How Does Remote Management Work in Practice?

As a foreign owner, alongside maximizing income, the most important question is how to ensure all this from afar, legally and predictably. The best solution for this is a reliable local partner who:

• handles tenant hunting, contracting, and check-in locally,

• transfers the rent directly to the owner's foreign bank account,

• provides regular financial statements prepared in the owner’s language,

• prepares and submits the tax return related to the utilization of the property

Midas Management fulfills exactly this role: from daily administration through tenant liaison to financial administration, we handle everything so that the owner does not need to be in Budapest to keep their property secure and profitable.

Important Disclaimer: This article provides general information and does not constitute personalized tax or legal advice. Individual situations (e.g., co-ownership, specific double taxation treaties, ownership through a company) may be subject to different assessments, and therefore it is always recommended to consult an accountant or tax advisor for individual tax matters.

As a Budapest property owner living abroad, would you like to keep your investment in expert hands? Contact us — we will help you find a transparent solution managed easily even from afar.

📞 +36 30 551 1722 ✉️ info@midaspm.com 📍 Budapest, Dorottya utca 6.