Buying Dubai property from Hungary: exempt, and still declared

Start with the numbering, because the commentary is full of citations to articles this treaty does not use for the purpose claimed. An article on hydrocarbons sits at Article 3 and pushes everything after it down one place against the OECD Model. Income from immovable property is Article 7, not 6; gains on its alienation are Article 14, not 13; the elimination of double taxation is Article 23. A page that cites 6 and 13 has not read the synthesised text the ministry publishes.

Article 7(1) says income derived by a resident of one state from immovable property situated in the other “may be taxed” in that other state, and paragraph 3 extends that to letting. Article 14(1) does the same for gains on sale. Those words grant the source state a permission; on their own they would not withdraw Hungary’s charge. Article 23 is what does that.

Article 23(1) reads, in translation, that where a resident of Hungary derives income which in accordance with the agreement may be taxed in the United Arab Emirates, Hungary shall, subject to paragraph 3, exempt such income from tax. That is the exemption method, and what matters is what is absent from it: no credit limb for this income and no subject-to-tax clause. The exemption does not depend on the UAE having taxed anything, so the Emirates levying no personal income tax leaves the income untaxed in both states. That is the agreement working as drafted rather than a loophole.

Article 23(3) lets Hungary take exempt income into account when computing the tax on the resident’s remaining income. That progression saving is live in law and close to inert in arithmetic, because section 8, paragraph 1 of Act CXVII of 1995 sets a flat 15 per cent with no bands for exempt income to push anything into. That reading is ours, drawn from two provisions we have quoted, not a statement NAV publishes. Social contribution tax does not arrive by a side door either: Act LII of 2018 charges it at 13 per cent, and section 5, paragraph 2, point (h) puts letting income outside the charge.

A gain on sale follows the same path: Article 14(1) gives the Emirates the taxing right and Article 23(1) exempts it in Hungary. Domestic law would otherwise have taxed it under sections 59 to 63 of the personal income tax act, with the section 62, paragraph 4 taper cutting the taxable amount to 100, 90, 60, 30 and then nil per cent across the year of acquisition and the five that follow. None of that machinery is reached, so there is no Hungarian holding period to plan around.

Two structural caveats. Article 14, paragraph 4 also reaches gains on shares deriving more than half their value from immovable property situated there, which matters if the apartment is held through a company. And the Multilateral Instrument has written a principal purpose test into this treaty, refusing a benefit where obtaining it was one of the principal purposes of the arrangement. Letting a genuine apartment is ordinary commercial activity; a structure built to route unrelated income through the agreement is not.

NAV’s booklet on foreign source income is explicit. Income taxable abroad which belongs to the consolidated tax base is left out of that base where a treaty exists, but it “must be shown in the tax return as information data”, and declaring it is the individual’s own obligation even where the return is built from the draft NAV prepares. Section 11, paragraphs 4 and 6 put the deadline at 20 May of the year following the tax year, and treat a draft left uncorrected as filed.

The conversion rule bites in practice. Amounts are determined in forint at the MNB rate in force on the day the revenue is acquired, and a currency absent from the MNB rate sheet goes through the euro first. The dirham is absent, so the two step route below is prescribed rather than a convenience.

This is the question the page turns on, and the one most readers answer wrongly. Section 3, point 2(a) of the act makes a Hungarian citizen a Hungarian resident individual, excepting only a dual citizen with no registered address or place of stay in Hungary, and NAV adds that citizens are resident under Hungarian rules even when they live abroad. Moving to Dubai and keeping a registered Hungarian address does not, by itself, end residence.

Where two states both claim you, Article 5(3) decides in the familiar order: permanent home, centre of vital interests, habitual abode, nationality, then mutual agreement. NAV notes that a refusal by the foreign authority to issue a certificate of residence signals that residence has not yet been acquired there.

Foreign ownership is a carve-out. Article (4) of Law No. (7) of 2006 restricts ownership to UAE and GCC nationals and companies wholly owned by them, then permits freehold for non-UAE nationals in certain areas determined by the Ruler, which Regulation No. (3) of 2006 sets by numbered land plot rather than by marketing name. Off-plan instalments sit in an account which Article (9)(1) of Law No. (8) of 2007 requires to be “dedicated exclusively to the construction of that Real Estate Development project”: ring-fencing, not a refund guarantee. The Land Department publishes its transfer fee as 2 per cent on the seller and 2 per cent on the buyer, and a buyer bearing all 4 per cent is market practice.

On the residence route the two UAE government sources agree on the money and disagree on the term. The government portal gives the investor category a “Minimum capital of AED 2 million” and states five years for real estate; the ICP service page asks for a letter confirming ownership worth at least AED 2,000,000, states that “The property must be fully owned by the investor”, and gives ten years. We print both rather than pick one. AED 2,000,000 is about 172 million forints at the rates below.

The Hungarian National Bank publishes no dirham rate: we established that by querying its own exchange rate service, whose currency list carries no United Arab Emirates row. The Central Bank of the UAE showed 4.267868 dirhams to the euro as at 3 September 2026, and the MNB official rate sheet dated 3 September 2026 gives 366.96 forints to the euro.

On those two rates an AED 3,000,000 apartment is about 702,900 euros, or roughly 258 million forints. The 4 per cent Land Department fee adds AED 120,000, about 10.3 million forints; the trustee fee at that value is AED 4,200, the title deed AED 250, and the knowledge and innovation fees AED 10 each. Registration is therefore about AED 124,470, roughly 10.7 million forints, for around 268.6 million forints all in. The forint figure is the one that moves, and for a return the rate is the one applying on the day each amount is received or paid. Model the purchase on the cost of buying calculator, check the threshold on the golden visa calculator, and see what is selling in the off-plan catalogue.

No Hungarian tax percentage is applied to the Dubai income above, because the agreement exempts it. We found no official source imposing a duty on an individual to report the acquisition of real estate abroad, and no NAV duty to report a foreign bank account as such: a failure to find rather than a proven negative, so we state it that way.

We do not print a golden visa duration as settled, because two government pages give different ones, and we found no official statement on whether an off-plan or mortgaged property qualifies. The euro rate is the Central Bank of the UAE’s own figure, read from its rate feed after its public page returned an error to us. The Hungarian statutes were read from a commercial consolidation, because the official Nemzeti Jogszabalytar refused every connection on the day of writing.