I think it happens because taxes are too high, incomes are too low and not enough checks take place. It's a very similar situation to Ireland in the 1980s. It's such a huge problem that it infiltrates almost every industry over here. Many businesses only exist/employ staff because they pay huge chunks of their wages in cash. Things are getting slightly better though, but the government has only touched the edges of trying to reform this issue. I guess they have more urgent economic issues to sort out first.
Budpest Partner Property Management
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I think it happens because taxes are too high, incomes are too low and not enough checks take place. It's a very similar situation to Ireland in the 1980s. It's such a huge problem that it infiltrates almost every industry over here. Many businesses only exist/employ staff because they pay huge chunks of their wages in cash. Things are getting slightly better though, but the government has only touched the edges of trying to reform this issue. I guess they have more urgent economic issues to sort out first.
H
Hungary
Guest
All what I am trying to say is that we manage 6 classic apartments only(taken over from other companies) which are not "perfect apartments for rent". Therefore, your point of view that we have less success in renting classic apartments might be confusing.
The other point is that tax should be included in reasonable rent, otherwise it does not make sense to compare our rents to other companies' rent. What I mean is that net rent is very low in Budapest if your gross rent is also low.
The key point is that Hungarian owners do not pay tax plus tenant are not interested in higher rent just because of tax liabilities. This is a kind of commitment between tenants and landlords so rent without tax is more common in Budapest.
Tax is an issue if tenant is a corporation that needs a receipt. Thanks to net rent approach, unfortunately, market price does not include tax in most of the cases. I do not think we are able to change people's approach to tax but it is better to know what is your net return after tax and charges.
Do a calculation by yourself if you know taxation rules. You will be surprised that tax liabilites are extremly high (39% if your annual rent is over €4,000 - alternative 1 - but there are other 2 alternatives which can provide you real tax return). Please mind extra charges such as introduction fee, management fee, insurance, accountant fee, maintenance.
(For your information: 3 alternatives are offered to property owners of how to pay tax - you might pay more tax(probably 2 months' rent) if you are not updated on taxation rules!)
If we are talking about financial investments we should focus on net /absolute figures instead.
The other point is that tax should be included in reasonable rent, otherwise it does not make sense to compare our rents to other companies' rent. What I mean is that net rent is very low in Budapest if your gross rent is also low.
The key point is that Hungarian owners do not pay tax plus tenant are not interested in higher rent just because of tax liabilities. This is a kind of commitment between tenants and landlords so rent without tax is more common in Budapest.
Tax is an issue if tenant is a corporation that needs a receipt. Thanks to net rent approach, unfortunately, market price does not include tax in most of the cases. I do not think we are able to change people's approach to tax but it is better to know what is your net return after tax and charges.
Do a calculation by yourself if you know taxation rules. You will be surprised that tax liabilites are extremly high (39% if your annual rent is over €4,000 - alternative 1 - but there are other 2 alternatives which can provide you real tax return). Please mind extra charges such as introduction fee, management fee, insurance, accountant fee, maintenance.
(For your information: 3 alternatives are offered to property owners of how to pay tax - you might pay more tax(probably 2 months' rent) if you are not updated on taxation rules!)
If we are talking about financial investments we should focus on net /absolute figures instead.
Many tenants I know in Budapest are actually interested if their landlords pay tax or not. From an Irish perspective, it is unacceptable that a landlord doesn't pay tax on rental income. Irish owners of property in Bp are very accustomed to this way of thinking. A landlord can still charge reasonable rent, pay their taxes and make a decent return over here.
As I suggested in my last post, I only ever refer to % return in the legal sense.
As I suggested in my last post, I only ever refer to % return in the legal sense.
H
hungarygirl
Guest
Hi everyone, if you are still searching for a management company, take a look at Bradley Edwards & Associates too, (no I'm not an agent, just 
and administrator) as in comparison to other agents who also only deal with foreign clients, they offer a very reliable service without ripping their clients off. If you have any queries, just let me know.
and administrator) as in comparison to other agents who also only deal with foreign clients, they offer a very reliable service without ripping their clients off. If you have any queries, just let me know.- Status