In general, personal income tax is payable for the income realised when selling immovable property, unless such is tax-exempt.
The income derived from the sale of immovable property qualifies as a separate form of income. Arable land, plots of land, and apartments qualify as immovable property, and the rules pertaining to immovable property pertain to the sale of concessions (for example, the right of usufruct, use, and land use).
When selling immovable property, the amount of income derived shall be determined by deducting the costs from the revenue, then decreasing the result by taking into account the number of years that have elapsed between the acquisition and the sale of the immovable property.
Whether the private person used the immovable property as a residence or for any other purpose (e.g. lease) is of no consequence when calculating income.
Everything that the private person gains as a result of the transfer of title (usually the sale price specified in the sales contract) shall be considered income.
The following costs can be deduced from the income:
The amount spent on acquisition is typically the value specified in the sales contract. If a private person receives the immovable property as a gift, the value taken into account for the purposes of imposing the duty qualifies as the acquisition value or, if no duty was imposed, the acquisition value shall be 75 % of the income derived from the transfer of title. If a private person inherits an immovable property, the value taken into account for the purposes of imposing the duty qualifies as the acquisition value or, if no duty was imposed, the acquisition value shall be the value specified in the settlement of succession.
The amount arrived at by decreasing the income with the costs can be further reduced based on the time for which the private person owned the immovable property.
If an immovable property is sold in 2021, the income derived shall be calculated as follows:
15 % income tax is payable for the income derived.
The income and the tax thereon shall be determined in the annual personal income tax return and shall be payable by the return deadline.
In certain cases, a part or the entirety of the income derived from the sale of immovable property shall be tax-exempt. For example, this includes the case when a private person sells arable land
If the land is co-owned and undivided, the income of the private person derived from the sale thereof to another co-owner shall be tax-exempt.
A penalty of no more than HUF 200 000 may be imposed on a private person who defaults on the submission of the tax return. A late penalty shall be payable for the late payment of the tax. The calculator on the NTCA website can be used to calculate the penalty:
The deadline for submitting the personal income tax return is 20 May of the year following the tax year.
Private persons shall prepare their personal income tax returns using the 'SZJA form. The reporting obligation can also be fulfilled by supplementing the draft tax return compiled by the NTCA based on the data reported by the paying agent.
The 15 % personal income tax shall be payable at the same time a submitting the personal income tax return.
National Tax and Customs Administration of Hungary
Information on the personal income tax return: https://www.nav.gov.hu/szja
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