Hungary is an appealing destination for many expatriates, offering rich cultural heritage, scenic landscapes, and a relatively low cost of living compared to Western Europe. This guide will help you navigate the best places to live in Budapest and understand the complex process of obtaining Hungarian citizenship.
Best Places to Live in Budapest
District V (Belváros-Lipótváros)
Luxury Hotels: This district is home to high-end hotels such as the Four Seasons and Intercontinental along the bank of the Danube, and the Ritz-Carlton and Kempinski at Deak Ferenc Ter.
Pros: Central location, historic sights, great accessibility.
Cons: Lack of new buildings and parking. Properties are in high demand and sell quickly.
District XIII (Angyalföld) and Marina Part
Pros: Modern and green areas, good location, more availability of new apartments.
Cons: Slightly farther from the city center compared to District V.
District II and III (Buda Hills)
Pros: Ideal for purchasing houses, home to embassies, international schools, private houses, and historic mansions. Scenic views and prestigious addresses.
Cons: Located on hills, requiring a car to move around.
Hungarian Citizenship Process
Obtaining Hungarian citizenship is a lengthy process with strict requirements:
Initial Residence Permit: Secure a regular residence permit and live in Hungary for 3-5 years. The shorter period applies if Hungary has a national interest in your presence; otherwise, it is 5 years for everyone else.
Permanent Residence: After fulfilling the residency requirement, apply for permanent residence. You must wait another 8 years living in Hungary to qualify for citizenship.
Physical Presence: You cannot leave Hungary for more than 90 days a year during this period.
Language Proficiency: Achieve a B2 level in Hungarian, which typically requires 1.5-2 years of intensive daily studies from a zero level.
Civic Knowledge: Pass exams on Hungarian history, culture, and the constitution, all in Hungarian.
Cultural and Social Aspects
Traditions and Society
Hungarians are very proud of their heritage, language, and traditions. They have a pragmatic Slavic mindset, similar to Russians and Serbians. Despite being part of the EU, Hungary maintains strict laws regarding public demonstrations and adoption by LGBTQ individuals. However, Budapest hosts an annual Pride parade approved by the city's mayor, reflecting a more liberal stance in the capital.
Emigration Trends
Younger generations in Hungary tend to migrate to Western European countries, seeking more liberal environments and better economic opportunities. Despite this, Hungary has a strong sense of national identity and success in preserving its cultural values.
Taxation in Hungary
Investment Taxation
Currency Reevaluation: Foreign currency investments are subject to reevaluation for tax purposes. For example, if you invest 2,000 EUR (worth 600,000 forints) and a year later sell it for the same 2,000 EUR (now worth 700,000 forints), you must pay a 15% tax on the 100,000-forint difference.
Annual Devaluation: The forint historically devalues by approximately 8% per year, impacting your foreign currency profits by about 1.5%.
Total Tax Rate
In addition to the 15% income tax, there is a 13% social contribution tax on most passive income, making the effective tax rate 28%.
Despite this, Hungary's tax rate is still lower than many Western European countries, where tax rates can approach 50%.
Conclusion
Hungary offers a unique blend of rich cultural heritage, strategic location, and relatively favorable tax conditions for expatriates. While the process of obtaining Hungarian citizenship is rigorous and requires a long-term commitment, the benefits of living in this beautiful country can be significant.
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