Heviz is a unique year-round spa resort town, as well as Europe's largest thermal lake. Accommodation in Hévíz and its surrounding villages provides opportunities for health care improvement through mineral and thermal springs.
Furthermore not far from Hévíz is located Balaton Lake, the largest lake in Hungary, that attracts lovers of beach-related holidays and water sports. Development of the tourism industry in Heviz and Lake Balaton offers opportunities for buyers as well as for investors. The region popularity rise among tourists from Russia is well marked. If in 2009, 3,000 of Russians came here, then in 2012 – came more than 18,000 of Russians.
Heviz
We had a talk with Andrew Pashatsky, Specialist in Exclusive immobilien Heviz, Hungarian real estate agency, about advantages of real estate purchase in Hungary, possibilities of obtaining a residence permit and taxes and expenses for the property. From an ee24.com interview you will also learn why it is better not to buy old houses in Hungary and how kerosine oil affects on relations between the local residents and the Russians.
– With which regions does your company work?
– Office is located in the center of Heviz. The agency works from 1996 in accordance with a classical model, when agents are in permanent contact with the inhabitants of the region and the local authorities in order to be well informed. That is why the company is working with the region where office is located – with surroundings of Hévíz spa town and Balaton Lake. Hévíz and West Balaton is the most prosperous region of Hungary, and Heviz has the highest income per capita in the country.
Heviz
– Who purchases real estate in Balaton Lake and what are advantages of this Hungarian region?
– Typical Balaton property buyers are citizens of Russia, Ukraine and Western Europe, pre-retirement or retirement aged, as well as Russian and European youth, who appreciates a temperate climate and a healthy lifestyle. For elderly people living at Balaton Lake - is an opportunity for treatment and rehabilitation. Moreover, in practice it is easier for pensioners to obtain a residence permit in Hungary.
It is very important that the Heviz resort, unlike most beach resorts, hosts visitors all year round. Hotels, shops and restaurants - everything works. Many people enjoy outdoor swimming in the thermal lake through clouds of warm steam. During the winter time, water temperature in the lake rarely falls below 24 degrees.
Another reason for purchase in Balaton Lake - is an opportunity to travel around the Europe. The sea is located at a distance of 3-4 hours drive and the international airports of Budapest and Vienna at a distance of 2 hours. There are lots of people who prefer to use an air harbor in Austrian capital, from where many flights are made.
By the way, there is a small international airport 15 km away from Heviz, from where you may fly to Germany, and since last year here are seasonal charter flights to Russia. From spring till autumn and in the summer season, my friends managed to buy a round trip ticket for 10 thousand rubles, and during New Year's holidays for - 20 thousand rubles.
Many of those who visit Balaton several times a year, come here by car from Moscow, the trip takes two days. For these people it is important to have own private car at Balaton Lake, to be able to tour around Hungary and also to travel abroad.
At last soft warm climate says in favor of the region. Winter time here is comfortable and summer that lasts from April till October is warm and long. Many older people like to work on the ground, and for them Balaton Lake offers ideal gardening conditions.
- Speaking about gardening, is it easy for foreigner to acquire a ground plot in Hungary?
- It is forbidden for foreigners to acquire plots for agricultural purposes but they are allowed to buy houses with garden plots. In this case, unlike in some other European countries, there is no need to organize a legal entity. Private person may easily acquire house with a small plot.
70% of buyers at Lake Balaton are the Russians
- How popular is your region among Russians and which other foreigners acquire property on the shore of Balaton Lake?
- We have a lot of clients from Switzerland, Austria, Germany and the UK. Active partners are in Norway and Belgium. Regarding Russians, they form about 70% of buyers. We may say that Heviz follows the same way as Karlovy Vary. By the way, if previously Russians preferred to purchase housing, than currently they actively start buying business. Many Russians own mini hotels and shops. There are examples of acquisition of business in agriculture industry: recently Russian investor built and successfully launched sturgeon breeding plant. Russians also operate in the construction of apartments for sale.
- And how do the locals behave towards the Russians, is there any negative attitude because of the historical events of the past?
- Generally speaking, people at the resort just enjoy the life: sun is shining, grapes are ripening, wine muddles. That is why people are amiable and friendly, far from politics. The older generation is familiar with Russian for a long time. At the place where today is located "Heviz Lake Balaton" airport in the times of Soviet era was situated airbase of Eastern Group Forces. The local population was friends with the Russian officers who were stationed here. And these relations were supported by a mutually beneficial exchange of wine for kerosene oil. Today no one will remember the exchange rate, but positive emotions still remained.
Due to the increasing numbers of tourists from Russia, there are waiting lists in language schools for those who want to learn the Russian language. On the other hand, the Russian who had already settled in these regions, learn the Hungarian language at the same school. It is useful to note that the school provides an official document on education. The study of the Hungarian language - is one of the possible grounds for obtaining a residence permit.
Lake Balaton
Residence permit in Hungary is got easier than mortgage
- Are there many European countries that provide a residence permit when buying property? What is the Hungarian policy regarding this issue?
- Hungary is a member of the European Union and in common is committed to the common scheme, about which much has been written and said. Business, education, work in the Hungarian company - everything here is just as it is in other European countries. The highlight is in the fact that Hungary gives residence permit "without labour permit for wealthy citizens." Usage is as follows: if a person has a house in Hungary and living allowance he or she can get a residence permit in Hungary without the labour permit. Practical experience shows that residence permit without labour permit may be changed on residence permit with labour permit.
The living standard in Hungary is not very high, so besides the property ownership is enough to show a bank statement, with at least €10,000. That account may be placed in a Russian bank, not necessarily in Hungarian.
Of course, you need to make a little effort: get the bank statement, take the documents for the property, go to the consulate to be interviewed. Hungary gives first residence permit for one year, and then it is renewed for three years. Although there are those who extend it for five years. Residence permit in Hungary allows the holder to travel along the Europe.
Lake Balaton
As for retirees, they already have a stable income - this is pension. In Hungary residence permit is given to everyone: to young as to pensioners, especially if you have at your account minimum €10,000 and more. In any case, every decision on granting a residence permit is made by Hungarian migration service individually. If you gain the support of a local lawyer in the collection and submission of documents and preparation for the interview, the chances to get residence permit will be very high. Our agency works with lawyers who specialize in visa matters. However there are cases when the Russians went through the procedure for obtaining residence permits by their own.
The second way to obtain a residence permit in Hungary - is to found a company. It has to operate, obey the law, pay taxes and wages. Having lived in Hungary 3 years with a residence permit, a foreigner may submit a request for permanent residence. In many other European countries, this period is 5 years.
- To escape the stage of residence permit and immediately be eligible for permanent residence in Hungary, you must purchase government bonds at least for €250,000. Are your customers who buy property interested in such opportunity?
- I wish to have a lot of such clients! Actually there is the program that gives permanent residence in Hungary in exchange for investments in state papers. Entitled contractors are already defined and we have such contacts among accredited law firms. We are able to arrange this; however, we never faced with this in practice. Everyone who wants to stay in Hungary on a permanent basis, first prefer to receive a residence permit when purchasing a property or creating a company.
- What is the situation with a real estate mortgage, how difficult it is for foreigners, especially Russians to get a bank credit in Hungary?
- It is very difficult for Russians. After the 2008 crisis, local banks are very accurate in credit issues. At our practice, the Russians did not get bank loans because Russia is not the part of the EU. Perhaps in the future in Hungary there will be a bank that will have the authority to make loans with citizens of countries that are not members of the European Union.
Resort Siofok on Balaton Lake
A new home is better than the old two
- Over the last year real estate prices in Hungary decreased on more than 5%. And what is the dynamics of prices in resort areas?
- Prices for real estate in Heviz had already surpassed rates in Budapest. In the center of Heviz square meter is sold for €2,000. Primary housing costs approx. €2,500 per "square". But there are not enough of new housing, almost nothing is being built. There is a shortage of space: a small town from all sides locked by national parks.
Real estate prices in Heviz and surrounding area are increasing and we may say that this are Russians who stimulates the market. However, I 'm not talking about all the shores of Balaton Lake but only about the distance of 15 km far away from Hévíz. This is an area from Keszthely town up to Balatongyorok village. In other places there is no high demand for the real estate, and the prices may even go down.
- What is the minimum price of real estate in Balaton Lake?
- Now in the area of Heviz one may found property for any purse. Starting at €30,000 and more. But let's not jump to conclusions. As an old proverb says: choosing home - choose neighbors. Therefore, in order to buy a modern house in Heviz or resort location at Balaton Lake, it is desirable to have the sum of €120,000.
For €120,000-180,000 you purchase a quality house, built in the 2000s, with 3 bedrooms, living room kitchen and an orchard. It will be located in the resort area with a developed infrastructure.
Why should you buy property in Heviz or next to it? Hévíz streets are crowded with friendly citizens from Western Europe who appreciate the quality and comfort of resort living. Here are developed infrastructure and transport, and the staff speaks several languages. In the villages you will find the ordinary workers worried with everyday problems and hurrying about their business along the roadside because most village streets do not even have sidewalks. To communicate with your neighbors, you have to learn Hungarian first. Buying a house in a remote village, you will probably not be able to resell it.
- Isn’t cheaper buy old houses built in socialism period?
- There is a lot of housing built in socialism period for sale, but it is not in demand neither among Hungarians, nor among Russians. Hungarians realize how costly is to maintain such property (replacement of windows, insulation, etc.). And the Russians have a slightly different view on the quality of housing.
So the houses of the socialist period exist but its cost is decreasing until it equals the price of the plot. And then this house is acquired, but only if the site is well located. New construction takes place here. Restoration of old houses is a very rare case.
You should understand that it is impossible to buy a house at Balaton Lake for €70,000 and enjoy life. This will be a home at settlements; there is not a lot of joy to live there. There are no shops and schools in such places, and Hungarians leave them. In the resort area on the shore, the boundaries of which I defined above, people live all year round, there are shops, schools and the entire infrastructure. The rest of the seaside is "dying" in winter period. If you have €50,000-100,000 better look at townhouses or apartments.
Fast paperwork, low taxes and utilities for €150
– How long does it take to register the real estate purchase and sale transaction in Hungary?
- All the authorities dealing with the registration of ownership for real estate in Hungary, work very well. All transactions are taking place with a participation of licensed attorney with whom we as realtors make a contact.
The process from choosing the house to get the keys may take 1.5 months, of which 1 month is devoted to get a lawyer permission for purchase from the municipality. This is just a formality, and the citizens of Russia, Ukraine and Kazakhstan obtain permits without difficulties. But the holders of Belarusian passport for any reason receive waivers. Transactions are often last longer than six weeks, but only because of the buyer: He stretches the payments, increasing the transaction period up to six months.
In general, buying a property in Hungary is as follows. Having selected the real estate object, the buyer makes a contract, usually final version. While signing the contract, the deposit is paid, academic case is 10%. But it could be even 5%. Then the buyer departs, and when the lawyer receives a permission for purchase, investor transfers the rest of the sum via bank payment directly from Russia. The money are transferred to the account of a lawyer who is the guarantor of the deal. Then the lawyer notifies the seller about receipt of money and pays him.
- How expensive are lawyers and realtor services? What are extra costs when buying property in Hungary?
- Lawyer services constitute 1.27% of the property value, where 1% goes to a lawyer, and 0.27% is a state VAT. Permission for purchase from the local authorities will cost around €200. The biggest waste is a single fee for the purchase of property by foreigners, it is 4% of the property value. State meets the needs as until recently this duty was 6%. As for the realtor usually it is the seller who pays for his services, and only a few exceptions when it is the buyer. For example in Slovenia realtors often charge both the seller and the purchaser.
- How expensive is to aliment a real estate and what is the level of utility bills?
- In winter heating of the old houses may reach €300 or more. Heating and maintenance of a modern house (water, electricity, garbage collection, and so on) will most probably not exceed €150 per month. It is about payment for a modern house with 3 bedrooms, living room and kitchen - the most popular size.
- Now in Hungary are for sale houses seized by banks from defaulters on mortgages. How profitable is it to buy such a property?
- Many people have mortgages. In Hungary, they were given in Swiss francs, and some time ago the exchange rate has changed dramatically in 2 times, and now Hungarians owe 2 times bigger debt. There are no many houses owned by banks, they rather own commercial real estate. People do not bring credit status for the sale by the bank, they sell their homes themselves. And you may bargain with them and get a home below the market price. Bargaining is welcome in real estate purchase and sale transactions, and we as realtors, who have authority in the eyes of sellers, help buyers to reach a compromise price.
Text: Alex Fetyukov, ee24.com