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Budapest housing market boosted by holiday rentals

Banking

Home sales in the center of Budapest saw a 40% rise last year, with demand being highest for 40-60 sqm apartments in need of renovation, Hungarian news agency MTI reported this morning, citing data from real estate agency Otthon Centrum.

Interest is especially high in the 7th district, where local ruin pubs attract international youth, as well as more traditional touristic areas for "non-partying" guest, the real-estate agency remarked.

Hungaryʼs National Tax and Customs Authority NAV told MTI that homes rented to travelers online by their owners qualify as commercial accommodation and require licensing and a tax number. Such accommodation is subject to an 18% VAT but are exempt up to an annual tax base of 6 million.

NAV also said they are conducting test purchases to determine compliance with the tax, threatening violators with fines of up to HUF 1 million.

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