Real estate expert: small, scenic Hungarian settlements could restrict property purchase, bigger places afraid of locals

The Hungarian Parliament accepted a law yesterday which empowers localities to restrict property purchase for non-locals and foreigners. That is how the Hungarian government would help small localities preserve their traditional characteristics. However, the mayors of Érd and Balatonalmádi both said they would not introduce restrictions because that would harm the interests of the locals.

Analysts don’t expect turmoil in the market

László Balogh, an analyst of ingatlan.com, a Hungarian real estate agency, does not expect significant turmoil in the property market due to the new law. He said there would be some local governments that would use elements of the new law against a massive influx. Furthermore, some localities will see the extra taxes they are entitled to impose on non-resident property buyers as extra revenue amid the decreasing central budget financing, atv.hu wrote.

As we wrote yesterday, thanks to the so-called “Local Identity Act” (Önazonossági törvény), municipal councils may determine who is permitted to move into the settlement and what conditions they must fulfil (e.g. contributing to the extension of utility networks). Councils may even stipulate that newcomers are not allowed to register a residential address in the settlement.

• Hungarian Parliament passes laws on property buying restrictions, cash use and windfall profit taxes

Mayors of Érd, Balatonalmádi refuse to introduce restrictions

According to atv.hu, the new law affects 400 settlements in the agglomeration of Budapest, Lake Balaton and some cities. But not all of them will impose the possible restrictions.

Érd is one of the fastest-growing Hungarian cities. Its population is currently above 71 thousand for two reasons: it is close to Budapest and the M0, M1 and M7 motorways, and is cheaper than the Hungarian capital. However, László Csőzik, the opposition mayor of the city, would not introduce restrictions even though there are not enough places for kids in the nurseries and schools, and local healthcare institutions lack capacity. That is because locals would be enraged if the price of their property decreased due to the restrictions.

The independent mayor of Balatonalmádi told atv.hu the same. He added that the main problem was the lack of jobs for young people.

• But a popular Balaton town is considering limiting property purchases and others may follow – read our article HERE

PM Orbán: Hungarian village must be preserved, protected

Referring to a recent Hungarian law concerning the identity of local communities, PM Orbán said in a morning interview today that “the Hungarian village must be preserved, protected; local communities must be helped to prosperity where they live.” He said, however, that “there is a phenomenon, when towns become cities against the will of locals … it is especially so when larger cities go through a complete transformation when people move in.”

“Each municipality should decide if they want to protect themselves … and how large they want to grow,” he said, but added it was a “legitimate expectation” by municipalities to receive sufficient central support to ensure that “they are in control of their own life”.