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The 0% Capital Gains Tax Benefit
The Hungarian Tax Advantage
Under Hungarian tax law, if you hold a property for 5 years or more, you pay 0% capital gains tax when you sell. This is one of the most generous tax policies for real estate investors in all of Europe.
Capital Gains Tax (after 5 years)
Years Holding Period
Profit Retained
How the Tax Exemption Works
The Sliding Scale
Hungarian capital gains tax on real estate follows a declining schedule based on how long you hold the property:
Practical Example: The Numbers
Investment Scenario
Result: You keep the entire €60,000 profit. In Israel, you would have paid approximately €15,000 in capital gains tax (25%).
Israel vs. Hungary: Tax Comparison
| Factor | Israel 🇮🇱 | Hungary 🇭🇺 |
|---|---|---|
| Capital Gains Tax Rate | 25% | 0% (after 5 years) |
| Exemption Available | Only for primary residence | For ALL properties after 5 years |
| Tax on €60K Profit | €15,000 | €0 |
| Reporting Requirements | Complex | Straightforward |
Important Note for Israeli Residents
As an Israeli tax resident, you are taxed on worldwide income. However, the Israel-Hungary tax treaty prevents double taxation, and you can credit Hungarian taxes paid against your Israeli tax liability. Since Hungary taxes at 0% after 5 years, strategic planning with a qualified tax advisor is essential.
Interested in Budapest Investment Opportunities?
RealFix specializes in cross-border real estate investments for Israeli investors. We handle property sourcing, due diligence, purchase facilitation, and ongoing management - all with expert tax planning guidance.
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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.
