Budapest real estate gets busy in 2012 August 23, 2012 Home Property News Despite the general downturn in the market (less sales, less construction) the first half of 2012 has been very busy in the central districts of Budapest. The number of apartments sold and rented by Catherine Dickens Properties has significantly increased when compared with the same period last year. The primary buyers are Hungarians, especially for property under 100,000 euros. The apartments above 100,000 euros are usually bought by Western Europeans, at least half of whom have some Hungarian family connection. Other agents also report increasing numbers. The increasing demand means the price of property in the prime areas is beginning to rise slowly. Budapest is still relatively cheap compared to the neighbouring countries and rentals in proportion have not decreased as much as the purchase prices, meaning the yields are higher. It is definitely a buyer’s market. Tenants’ payment discipline has somewhat deteriorated over the past year. Landlords do well to appreciate well-paying stable tenants. It is advisable to consider replacing furniture and appliances and renewing the apartment in between tenants because apartment ownership inevitably draws maintenance expenses. If these repairs are neglected, it becomes very challenging to rent a vacant flat or keep an existing tenant satisfied, which result in even higher expenses for the owner. The primary deciding factor for a potential tenant after the first impression is the “new feel” of the apartment when it is shown. Vacant apartments are almost exclusively the consequence of worn interiors, non matching furniture, dark & dirty stairwells, ugly building entrances, or some major inconvenience (3rd floor and no lift, awkward layout). Successfully maintaining or creating this “new feel” ultimately decides how long the apartment will stay empty. The management and staff behind Catherine Dickens Properties pride themselves in giving apartments the necessary face lift to move them out of a deadlock. Be sure to ask for a quotation. Taxation Last quarter’s personal income tax returns, for the year 2011, are due for payment. This may be a larger unexpected expense for apartment owners who have not paid regular tax advances. Another obligation for private owners (not companies) is the payment of quarterly tax advances. This tax advance of the owner is actually paid by the ternant in case the tenant is a company. The deduction of this tax advance is an obligation; the tax authority wants to be sure it gets its share. Even though the tax requirement turns out to be less after expenses are deducted, the advance still has to be paid in full. Only after payment is it possible to fill out the forms and reclaim the tax. Reclaiming any tax from the government automatically brings on a personal audit, which accountants are reluctant to initiate because of the hassle and responsibility, as there are smaller fines, penalties and inconsistencies usually. However there is no other way to keep the taxes low, sooner or later the tax refund process must be started. Be sure to ask your property manager where this stands with your reported earnings.