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The Opportunity: Why This Strategy Works
Budapest Sales: Smaller = Higher Price Per Sqm
A large apartment (120 sqm) sells for €1,700/sqm. The same space split into 2 smaller units? Sells for €2,300/sqm on average.
Before Split
- • Apartment: 120 sqm
- • Price: €200,000
- • Price per sqm: €1,667
After Split
- • 2 apartments × 60 sqm
- • Total price: €280,000
- • Price per sqm: €2,333
- Profit: €80,000 - renovation costs
Even after deducting renovation costs (€30,000-€50,000), that is a profit of €30,000-€50,000 - before you have even started renting!
The Market Supports This Strategy
With prices rising 19% in the past year and a shortage of small apartment supply, there is very high demand for 40-60 sqm units. Splitting increases both property value and rental yield.
Legal Warning: Official Split = Nearly Impossible!
Official Land Registry Split Requires 100% Tenant Consent
To officially split an apartment in the Land Registry (Földhivatal), you need consent from every owner in the building (100%). This is nearly impossible in practice.
Illegal splitting = heavy fines + mandatory restoration to original state.
The Legal Solution: Dual-Key Layout
Instead of splitting in the registry, create an "internal duplex": one entrance, but inside there are 2 independent units with a partition.
- • In the registry: Still one apartment (legal)
- • In practice: 2 separate units (profitable)
- • Rental: Can rent each unit separately
Check Airbnb Regulations in Your District
Before splitting an apartment for short-term rental, check if your district still allows Airbnb. Districts 6 and 7 restrict short-term rentals - but long-term rental to students/expats is still very profitable.
Technical Guide: How to Split Properly
Step 1: Find the Right Apartment
- • Size: Minimum 100 sqm (preferably 120+)
- • Layout: Rectangular (not L-shaped)
- • Windows: On two sides (natural light for both units)
- • Location: At least 2nd floor (security + privacy)
Step 2: Partition Planning
- • Drywall: €3,000-€5,000 (fast and affordable)
- • Sound insulation: Essential! (€1,000-€2,000)
- • Locking door: Between the two units (€600)
Step 3: Additional Kitchen + Bathroom
- • Compact kitchen: €8,000-€12,000 (IKEA is sufficient)
- • Bathroom: €10,000-€15,000 (tiles + plumbing)
- • Total: €18,000-€27,000 for the second unit
Need Renovation Financing?
RealFix can help secure renovation loans against the Budapest property or leverage assets in Israel.
Renovation Financing ConsultationFull ROI Calculation
Example: 120 sqm Apartment
ROI: 9.25% before any rental income!
Tax Advantage: 0% Capital Gains After 5 Years
If you hold the split property for 5 years before selling, you will benefit from complete capital gains tax exemption in Hungary. This significantly increases your net profit.
For Israeli Residents
Israeli investors can finance Budapest renovations by leveraging property in Israel. Tax treaties between Israel and Hungary prevent double taxation. Have family in Israel who might be interested in Budapest investment? Share this guide with them.
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Legal Disclaimer
The data and returns presented are for illustrative purposes only and are based on past performance or market estimates. This information should not be considered as a guarantee of returns, investment advice, or a substitute for individual tax advice. Real estate investment involves risks, including regulatory changes, currency fluctuations, changes in property condition, and local market conditions. RealFix does not guarantee the displayed returns and is not responsible for losses resulting from investment. It is recommended to consult with a Certified Public Accountant and tax consultant before making investment decisions. E&OE.
