The Government decree no. 251/2014 replaces the former government decree no. 7/1996 on the purchase of property by foreigners. The new decree stipulates more severe provisions than the former, namely for the deadlines; the required circle of documents that shall be attached to the foreigner’s application – though it does not require the former notarial form of for the foreigner’s identification -, even in case of private entrepreneurs or sole proprietorship and for the foreigner’s acquisition of ownership.
The new decree shall prevail for the foreign natural and legal person’s acquisition of ownership of non-agricultural and – forestry property. The acquisition of the ownership of a property of a Hungarian branch registered in a non-EU country does not fall within the scope of application of the decree.
According to the decree the application in the annex shall be handed in to the competent Budapest and county government agency. The foreigner applicant shall attach to the application the certified true copy of a document eligible for the identification of him/her; in case of a branch the certified true copy of or notarial attested excerpt from the commercial register not older than 21 days.
Furthermore the draft of the purchase agreement or the purchase agreement and the statement of the seller - attached in the annex of the decree - on his/her intent of transferring the ownership title of the property and lastly the certified true copy of the title deed not older than 21 days.
The private entrepreneur or sole proprietor member applicant shall, besides the above, hand in the certified true copy or authentic instrument of its business activity not older than 21 days. If the applicant’s home country does not provide at least the same rights for Hungarian citizens, or companies registered in Hungary by an international treaty or mutualism then the foreigner shall attach the certification of his/her employment provided by the tax authority. In case of the former the acquisition is approved if the applicant is willing the pursue a habitual life and business activity in Hungary, the property is required for his/her business operation and it does not violate public interest. The applicant has a 90-day deadline for the initiation of his/her life and business activity. In case of the latter the acquisition is approved if it serves the termination of jointly owned ownership or the applicant continuously resides in Hungary at least for 5 years and possesses altogether 3 years of employment. The acquisition shall be approved if it does not violate public interest or the interest of the local authority.
In case of a natural person the violation of public interest means that there is an expulsion, ban of entry and residence, warrant of arrest or imprisonment punishment inflicted on the applicant or the violation of public interest may be assessed for other public security, public order or public health reasons. In case of a legal person violation of publc interest it mean that the national tax authority suspended or terminated its tax number, it is under an operation ban or liquidation, forced termination or other process according to the Branch Act.
Violation of local authority’s interest refers to the violation of the duties of the local authority or Budapest local authority set out in the law and undertaken voluntarily or mandatorily.
The Minister of Foreign Affairs is responsible for the approval of purchase by diplomacy or consulate and any other similar international association.
If the foreigner wishes to purchase the property by means of auction a preliminary general permission will be granted to the applicant to purchase a property in its competence.
The deadline for administration is 15 days, though the mayor has 30 days to give his/her opinion on the violation of local authority interest upon the government agency’s request and then the government agency shall decide within 10 days upon the receipt of the mayor’s opinion or if the deadline passes without action on giving permission for the acquisition.