Stamp Duty on Budapest Property?

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neilgarv

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I currently own a new build property in Budapest, the total cost was €80,751. I have been sent a letter from a Company called Sigma Company Limited. It states on the letter that they are acting by the authorization of the Ministry of Finance. It states that I have a liability due for Stamp duty, for a total of HUF 701,864. I was sure I didn`t have to pay any stamp duty; I looked this up on the internet and it states on numerous webpages that no Stamp duty is payable on a new build property less than 30M HUF, equating to approx €109K at the current exchange rate. Has the law changed or is this information that I was using incorrect?

Thanks
 
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Only up to a 15m purchase is exempt unfortunately for new apartments. It changed several years ago. Storage spaces and parking places are also charged at the higher rate which may explain the higher figure if applicable.
 
Thanks for that Budapest. I`ve used the cut-off you have mentioned here and I`m calculating a figure much lower than the figure they quoted! my calculations are as follows:

Value of Apartment €71,753
Value of Parking Space €9,000
Total Value of apartment €81,753
Assuming a current exchange rate of approx 275HUF/1 EUR, I get:

Exempt: €54,545
Payable of apartment: (€71,753-€54,545)*0.06=€1,032
Payable on Parking Space €9,000*0.06=€540

Total €1,578. Convert back to HUF=432,432

This is considerably lower than the 701,864 HUF they have quoted. Your help would be much appreciated on this one!
 
sorry slight mistake in above calc-doesn`t effect the overall figure. The total value of the apartment is €80,753
 
Stamp duty of the parking space is at 10%, so would affect those figures slightly, but still shouldn't add up to the figure you were quoted. I've sent you an email address privately if you want to send the document through that you received and I can check it over. Usually, they give an exact breakdown of the costs involved.
 
Hi Budapest, can you advise when this changed? I had bought an apartment in November 2007 which completed in June of this year, however I was always led to believe that I was exempt from any stamp duty. Thanks.
 
If your new-build property cost less than 15M, then it was and would continue to be exempt. Between 15M-30M, the rate is 6%. If the purchase price is above 30M, then it is not eligible for new-build stamp duty exemption.

I don't remember exactly when the law changed. I'm pretty sure that it was earlier than Nov. 2007 though - possibly some time in 2006.
 
Ok. And would the finance office get in touch with me in the UK? Another thing that I have just noticed is that I am unsure whether my property has been registered with the land registry in Budapest, as although I had been assured everything had been dealt with I now suspect since I havent paid any stamp duty then it is likely that my property is not registered!? Do you have any advice on how I can find out or what actions I should take? I'm concerned as I think there may be a 6 month window for registering it. Thank you.
 
Stamp duty is treated as a separate issue from ownership registration. In my experience, it can take even up to 24 months for a stamp duty request to come through. The request may be sent to the property or to your lawyer, so best to keep an eye on all of the various addresses.

If you ask your lawyer for an up-to-date property sheet (tulajdoni lap), you will be able to see who is currently registered as the owner of your apartment. This is absolutely worth doing if you have any doubts about ownership.
 
Given that the whole buying process was dealt with the property agent and developer, I am unsure of the solicitor used. However, I have requested an up to date property sheet for the property so hopefully this will shed some light on things, and I have contacted the developer and selling agent also.

Fingers crossed it will take a while longer for the stamp duty to catch up with me, to allow me to save up!
 
interestingly I also got a letter from Sigma during the week for what appears to be a request for additional Stamp duty due; even though I paid the amount requested by Sigma in 2005 (!) in full.

Its for an additional €513, requested four year on!

Any thoughts? There must be others getting these letters too. Is the Revenue ministry retro-applying new stamp duty rules?
 
Maybe they made a mistake in 2005, or alternatively, if you paid late, they may be claiming a fine now. Or it may be for something separate such as a parking or storage space. Best to check it out. If it's in Hungarian and you want me to check it over, just send an email to [email protected]
 
thanks, just dug up the records from '05, and I notice the one in '05 says 'Sale Duty', whereas the latest one says 'Stamp Duty'? The calculations used in both are the same;

In '05 I paid on-time and in full, so its not a fine. Will give them a call

edit: just noticed the Sigma case officer has his direct email listed.
 
Thanks Budapest. Using the 10% on the parking, and the 6% on the balance over 15M HUF, at Mar 09 exchange rates the total value I have calculated is close to the quoted figure. My lawyer in Hungary sent me a calculation of what he expected the total to be and it was a similar figure also, so everything seems to be ok.
Investpest, the purchase date and the completed date of your apartment is nearly the same as mine, and I only received the letter this week so if your apartment is valued over the 15M HUF threshold there is the possibility that you will receive it quite soon.
 
you guys completed in June 09, and I was over 3 years earlier, but we all received this letter from Sigma the same week; they are probably batched.

Did either of you pay any duty before you completed the sale?
 
I dont recall paying any duty before or since I completed the sale, and have not received any notification yet, although I expect to hear soon now that I have ready your replies. I have been told to expect to pay around 500,000 HUF so I guess I will just need to wait and see, although this figure seems pretty close to what I have since expected after some further reading. I've also been advised that this can be paid in 12 monthly interest free instalments?
 
investpest said:
Given that the whole buying process was dealt with the property agent and developer, I am unsure of the solicitor used. However, I have requested an up to date property sheet for the property so hopefully this will shed some light on things, and I have contacted the developer and selling agent also.

Fingers crossed it will take a while longer for the stamp duty to catch up with me, to allow me to save up!
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You should have used your own independent solicitor. Whose side do you expect the solicitor chosen by the proerty agent and developer to be on? It certainly won't be yours!
 
neilgarv said:
I have been sent a letter from a Company called Sigma Company Limited. It states on the letter that they are acting by the authorization of the Ministry of Finance. It states that I have a liability due for Stamp duty, for a total of HUF 701,864. I was sure I didn`t have to pay any stamp duty
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Why is a third party company you never heard of collecting taxes on behalf of a government ?
Maybe everyone here is familiar with the company and with Sigma but this seems like a strange situation to me. Could it be a Phony Invoice scam trying to con money from you which you do not owe ? I'd think someone who didnt use an independent solicitor and who does'nt understand the language or how things are done would in general be an easy target and can be easily frightened by bills in a strange and foreign language.
If on the other hand the company is legitimate; I still say pay your taxes directly to the Hungarian government. If the third party folds and takes your money with it, you will still be liable for paying the taxes directly to the government and thats an unnecessary risk I would not wish to take.
 
Nice to see the xmas spirit alive and kicking by SteveD the prophet of doom and gloom, havent had any problems with solicitor/developer/selling agent, if anything it has just been an oversight on my part with regards to stamp duty so i'm not unduly concerned. In terms of making payments for it, then I wont just be sending money left right and centre to third parties without doing any research first. I'm not completely stupid.
 
bullworth said:
Why is a third party company you never heard of collecting taxes on behalf of a government ?
Maybe everyone here is familiar with the company and with Sigma but this seems like a strange situation to me. Could it be a Phony Invoice scam trying to con money from you which you do not owe ? I'd think someone who didnt use an independent solicitor and who does'nt understand the language or how things are done would in general be an easy target and can be easily frightened by bills in a strange and foreign language.
If on the other hand the company is legitimate; I still say pay your taxes directly to the Hungarian government. If the third party folds and takes your money with it, you will still be liable for paying the taxes directly to the government and thats an unnecessary risk I would not wish to take.
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I had the same reaction when I received an invoice from Sigma, so I sent it to the woman who does my taxes in Hungary and she said it was okay to pay. Apparently, the Hungarian government contract out the collection of stamp duty. However, I would check that the invoice really is from Sigma and that the bank details it gives are correct. There is nothng to stop somebody with access to Land Registration records from sending out bills on lookalike Sigma notepaper with their own bank account details.
 
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