In Hungarian law if a purchase substituting a swap takes place and the private individual owner sells or exchanges their residential property within the period of one year before or after the purchase of their residence, the base of the duty is the difference between the market values of the purchased and the sold or exchanged residential properties – without the additional liabilities.
According to legislation valid until 31st December 2014 if the sale takes place in one year following the purchase, than the buyer was obligated to pay duty after the purchased estate and could only apply for reimbursement after the successful sale, according to the Hungarian Tax and Financial Control Administration.
From 1 January 2015 the law, while maintaining the old legislation, will offer another solution. According to the Act XCIII of 1990 on Duties if the private individual owner reports it before the duty is imposed that they will sell their another property within a year, and requests the duty to be base on the rules regarding the purchase substituting a swap, than the tax administration determines the market value of the purchased estate and stay the proceedings of imposing the duty without disclosure.
If the private individual certifies the selling of the other real estate within the year, the tax administration will continue the proceedings and will determine the payable duty based on the difference between the market value of the sold and purchased estates.
If the private owner does not certify the selling of the real estate within the year, than the administration will impose duty after the market value of the purchased estate. They will also impose additional duty calculated with the double of the prevailing base rate and from the day the individual submitted their declaration.
