Replacement Purchase (Cserepótló Vétel)

What is the essence and legal background of the replacement purchase on the property market?

On the Hungarian housing market, more than one hundred thousand sales are concluded each year, and turnover has picked up in recent years. The vast majority of these transactions are entered into by natural persons who finance their next housing solution from the sale of their existing property assets, so optimising the public charges on the acquisition of property is a vital interest for them.

The legal institution known in everyday language as cserepótló vétel (replacement purchase) is officially termed in the statute a “purchase substituting for an exchange” (cserét pótló vétel). The rules are contained in Act XCIII of 1990 on Duties (the Duties Act), Section 21, which, as a special provision, breaks through the general regime of duty assessment. As a general rule, the rate of the property transfer duty is 4% of the market value per property up to HUF 1 billion and 2% on the part exceeding that, but not more than HUF 200 million (Act XCIII of 1990, Section 19(1)). On grounds of equity, the legislature exempts the home buyer from the obligation to pay on the full value of the asset where the purchase in fact serves to give up and replace a previous home. Accordingly, the duty base is not the full purchase price but the difference between the market value of the property sold and that of the property purchased.

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What statutory conditions apply to claiming a purchase substituting for an exchange?

The application of the relief is subject to strict legal and personal conditions; in their absence the National Tax and Customs Administration assesses the property acquisition duty on the full market value.

Who is entitled to the relief under the personal conditions?

Under the provisions of the Duties Act, only natural persons, that is, private individuals, may take advantage of the relief for a purchase substituting for an exchange (Act XCIII of 1990, Section 21(2)). Where a home is acquired by a business company, foundation, association or other organisation with legal personality, the relief cannot be applied; in their case the 4% duty rate on the full market value remains applicable.

Which properties fall within the statutory concept of residential property?

The statute expressly narrows the material scope of eligibility for the relief to the acquisition and sale of residential property. Only a building or part of a building registered in the real estate register under the designation of dwelling house or flat qualifies as residential property, including a structure that has reached the shell-completed state — that is, has a roof structure — together with the land parcel belonging to it (Act XCIII of 1990, Section 102(1)(f)).

The relief cannot be applied if the asset sold or acquired is a building plot, weekend house, resort property, holiday home, closed-garden property, industrial facility, or a garage or storage unit registered under a separate land registry number. If a private individual sells a home and from the proceeds buys a building plot or a holiday home, the full 4% duty must be paid on the transaction.

What qualifies as a sale according to court practice?

To claim the relief, the earlier residential property must have been transferred for consideration. Titles of gratuitous acquisition, such as gift or inheritance, cannot form the basis of a replacement purchase.

Whether properties lost through an enforcement auction may be taken into account was a contested legal question for a long time. In the tax authority’s view, an auction constitutes an original acquisition of ownership within the system of the Civil Code (Act V of 2013), and therefore did not qualify as a contractual sale. In its precedent-setting judgment No. Kfv.V.35.027/2025/7, the Curia held that, on a teleological interpretation of Article 28 of the Fundamental Law, the concept of “sale” must be applied extensively. Since the duty payment obligation falls on the new owner who buys at the official auction, the duty relief for a purchase substituting for an exchange cannot be denied to the former owner who lost the property under compulsion either, when that person later buys a home.

How does marital community of property operate in the assessment of duty?

The civil law presumption of marital community property (Act V of 2013, Section 4:37) does not apply automatically in duty assessment proceedings. According to court practice, when establishing the duty base the tax authority proceeds, as a general rule, from the ownership shares recorded in the real estate register and does not examine the spouses’ internal property relations. If the property sold was owned exclusively by one spouse in a 1/1 share, the sale proceeds received may be set only against the ownership share newly acquired by that spouse and cannot reduce the duty base of the share acquired by the other spouse.

Can the relief be claimed in the case of undivided joint ownership?

It often happens that several separate dwellings are located under one and the same land registry number and are legally held in undivided joint ownership. The Curia’s judgment No. Kfv.I.35.100/2023/7 made it clear that a purchase substituting for an exchange may also be applied where the home sold and the home purchased are physically located on the same property. In practice, proving this usually requires a written use-division agreement between the parties that precisely delimits the exclusive use and independent function of each dwelling.

Which deadlines and sequencing rules must be observed in the sale and purchase?

The statute precisely defines the time frame within which the sale and purchase transactions must take place for the relief to be recognised.

When do we speak of a past and when of a future sale of a home?

A private individual may rely on the rules on a purchase substituting for an exchange in two transaction sequences:

• Past sale: An earlier residential property sold within 5 years before the acquisition of the new home may be taken into account in the duty base of the purchase.
• Future sale: A residential property sold within 1 year after the acquisition of the new home likewise gives rise to the duty relief.

In the case of a future sale, the acquirer declares the intention to sell on form B400 when reporting the new property and requests the suspension of NAV’s procedure. The fact of the sale must be evidenced to the tax authority by the last day of the 13th month following the purchase, with a sale and purchase agreement endorsed by the land registry office.

How do the one-to-one principle and the right of choice work where there are several homes?

The basic principle of the legislation in force is that, against each individual purchase of a home, the value of only one home sold may be set off (Act XCIII of 1990, Section 21(4)). If the buyer sells several homes during the five-year period, their sale prices cannot be combined and set against the value of the new home.

The legislature has lifted the earlier strict restriction which mandatorily required the sale closest in time to the purchase to be taken into account. The buyer is entitled to choose freely, from among the homes sold within the five-year window, the one that results in the most favourable duty base — that is, the lowest positive difference or full exemption from duty.

How is the property acquisition duty calculated in practice?

When establishing the property acquisition duty, the tax authority proceeds not from the purchase price determined by the parties but from the market value of the properties not reduced by encumbrances (Act XCIII of 1990, Section 21(5)). The market value is based on comparative market data, which NAV may adjust, where necessary, by an on-site inspection or an expert estimate.

How much duty must be paid when buying a more expensive or a cheaper property?

Two basic situations may arise in the calculation of duty:

1. Purchase of a more expensive home: The market value of the home sold must be deducted from the market value of the home purchased. A 4% property transfer duty is payable on the positive difference.
2. Purchase of a cheaper home: If the buyer purchases a home with a lower market value than the one sold, the difference is negative. In this case full exemption from duty arises by operation of law, and the amount of duty payable is HUF 0.

The financial effects of the transactions are shown in the comparative table below:

Type of property transaction	Market value of the home sold	Market value of the home purchased	Calculated duty base	Standard duty without relief	Differential duty payable	Property acquisition duty saved
Buying a more expensive home	HUF 50,000,000	HUF 75,000,000	HUF 25,000,000	HUF 3,000,000	HUF 1,000,000	HUF 2,000,000
Buying a cheaper home	HUF 65,000,000	HUF 45,000,000	HUF 0	HUF 1,800,000	HUF 0	HUF 1,800,000
Exchange at equal value	HUF 50,000,000	HUF 50,000,000	HUF 0	HUF 2,000,000	HUF 0	HUF 2,000,000

In all three scenarios the differential duty base cuts the payable duty substantially — and to zero where the new home is worth less.

How does a usufruct affect the duty base?

In the case of a home acquired encumbered by a right of pecuniary value, most commonly a usufruct, the owner’s duty base is the market value reduced by the value of the right of pecuniary value (Act XCIII of 1990, Section 20; for the calculation of the value: Section 72). The one-year value of a right of pecuniary value is one twentieth, that is, 5%, of the market value. In the case of a lifetime right, the value of the right of pecuniary value is determined by the age of the usufructuary:

Age of the usufructuary at the time of acquisition	Multiplier applied	Value of the usufruct relative to the market value
Under 25 years of age	10 times the one-year value	50% of the market value
Between 25 and 50 years of age	8 times the one-year value	40% of the market value
Between 51 and 65 years of age	6 times the one-year value	30% of the market value
Over 65 years of age	4 times the one-year value	20% of the market value

A practical calculation example: A private individual buys a home with a market value of HUF 60,000,000, on which a lifetime usufruct is created in favour of his 62-year-old mother. The one-year value of the property is one twentieth of the market value, that is, HUF 3,000,000. Based on the 51–65 age bracket, the applicable multiplier is 6, so the value of the usufruct is: one-year value × 6 = HUF 18,000,000. The value of the ownership (the value of the substance) acquired by the buyer is accordingly: HUF 60,000,000 – HUF 18,000,000 = HUF 42,000,000. If the buyer takes into account, as a replacement purchase, a home previously sold for HUF 40,000,000, his duty base will be: HUF 42,000,000 – HUF 40,000,000 = HUF 2,000,000, on which, at the 4% rate, he pays only HUF 80,000 in duty. The usufructuary pays 4% duty on her own acquisition of HUF 18,000,000, unless she is entitled to a statutory personal exemption as a lineal relative.

What procedural steps are needed to report the relief to the tax authority?

The duty relief does not apply automatically; the acquirer must expressly declare his eligibility on the official form provided for this purpose.

On which form and in what way must the request be submitted to NAV?

A purchase substituting for an exchange is reported on form B400 (marked B400e in electronic administration), which is typically submitted by the attorney drafting the agreement, together with the sale and purchase agreement, to the land registry office, which forwards it to NAV; in justified cases the report may also be made directly to NAV. If the earlier home has already been sold, a copy of the contract evidencing the sale must be attached to the form.

In the case of a future sale, the undertaking to sell and the request for the suspension of the procedure must be recorded in the box provided for this on the form. After examining the conditions, the tax authority issues a payment notice, and the duty assessed must be paid within 15 days of the payment notice becoming final.

What risks and late payment surcharge arise if the sale does not take place?

It carries a serious financial risk if the buyer is unable to sell his existing property within the one-year preclusive deadline, or fails to evidence the sale by the end of the month following that deadline. In such a case the tax authority terminates the suspension and imposes the 4% property transfer duty on the full market value of the property purchased.

Under Act CL of 2017 on the Rules of Taxation, a late payment surcharge may be charged on the unpaid duty from the due date, which places a significant financial burden on the taxpayer. If it becomes apparent that the old property cannot be sold in time, it is advisable to make a voluntary report to the authority before the deadline expires and to request payment in instalments on equitable grounds for the duty arising.