If you have a trustworthy property manager, than you don’t have to worry. If you are not sure, than you have to check whether the fields below are in order.
1. Unpaid Utilities
This problem has to come to light quickly if there is a tenant in the apartment, since the services can be cut off after few months of unpaid bills.
In that case, beyond the outstanding amount you have to pay a kind of penalty (“switch back fee”) and sometimes a professional must be involved to check the meter, which is another extra cost.Naturally, this problem can be avoided, if the tenant pays an advance fee. Please note that utility services can be restricted even if the apartment is vacant, but bills are not paid.(Read more about this)
2. Unpaid Common Cost
Common cost is the most dangerous obligation from this point of view if it is unpaid. If there is a strict common Representative, than the unpaid common cost can be noticed earlier.In case of a careless one, you can accumulate a big amount without being noticed. Contrary to the utility services, usually nothing is cut off, which can be a sign of the problem.The worst outcome is that they put a mortgage on the apartment. It can cause problems in case of selling, or in extreme cases, the owner can even lose the property.Don’t forget: common cost is due even if the apartment is empty. (Read more about this)
3. Unpaid Tax
According to our experience many of the foreign property owners in Budapest are not even aware of the fact that there is income tax obligation.Some of them are paying tax after the rental income in their home country.Their problem is that in most cases it is not even necessary.Hungary has double taxation treaty signed with … countries. Normally the tax should be paid only in Hungary after the Budapest rental income. If there is a difference between the tax rates of the two countries, it can be paid at home too.Currently the income tax rate is 16% in Hungary. The unpaid tax in Hungary can be even collected by the Revenue Office of your home country if the Hungarian Tax Office starts an international process.(Read more about this)
