Hungary may not have tax rates as low as Montenegro or Serbia but it sports an affordable cost of living, pleasant weather, and a quiet lifestyle. In this article, I’m going to walk you through everything you need to know if you’re planning to retire in Hungary!
Table of Contents
Cost of Living in Hungary
Renting is very affordable in Hungary with a one-bedroom apartment outside the city center costing $300 per month on average. Even a three-bedroom apartment in the capital city center of Budapest will still cost you less than $900 per month.
Taxes in Hungary
Hungary’s personal income tax is set at a flat 15% rate. Residents are taxed on their worldwide income while non-residents are only taxed on their Hungary-sourced income. Hungary also imposes a high value-added tax (VAT) rate of 27%.
How to Become a Permanent Resident in Hungary
If you’re already a legal national in the European Economic Area (EEA) then you can apply for an interim permanent residency card. The card is valid for five years and renewable. After holding the card for five years, the resident can apply for a permanent residence card which is valid indefinitely.
The easiest way for non-EEA nationals to become a permanent resident in Hungary is to apply for a residence permit for “the pursuit of gainful activity.” This residence permit is available to non-EEA nationals who want to either start a business in Hungary or work as a self-employed resident.
You’ll need a private entrepreneurial license, business plan, service contract, or other documentation to verify the purpose of your residency application. If you’re going to start a business, there are a few criteria you’ll need to meet.
First of all, you’ll need to employ at least three full-time Hungarian citizens for six consecutive months without any interruptions.
Alternatively, you could assert that your residence in the country is necessary for the company to succeed and provide supporting documents to back up your claim.
The residence permit is valid for three years but can be renewed for three additional years if the requirements for economic activity are still met. Spouse, children, and parents can be included in the residency application.
After five years of continuous residence in Hungary, you’ll be able to apply for an EC Permanent Residence card which is valid for five years and renewable. After a total eight years of residence (either temporary or permanent) you’ll be eligible for Hungarian citizenship by naturalization.
An exam on constitutional studies and the Hungarian language will be provided before citizenship is granted.
If you were born in the country, married a Hungarian citizen, or are the parent of a Hungarian citizen then the eight-year naturalization timeline is shorted to three to five years.
Hungary Passport Visa-Free Countries
Hungarian citizens are able to travel to 113 countries visa-free:
A Hungarian passport provides visa-free access to 113 countries. This includes the entirety of Europe and Latin America (except Guyana). Citizens can also travel visa-free to certain countries in Asia like Japan, Thailand, Malaysia, Singapore, and the Philippines.
Hungarian citizens also get Electronic Travel Authorization (eTA) access to the United States, Canada, Australia, New Zealand, and South Korea. In summary, a Hungarian passport can get you almost anywhere you need to go — including nations in Central Asia!
Safety in Hungary
Hungary is one of the safest countries in the world. It has lower crime rates than other European countries like Italy, Spain, Sweden, Poland, Norway, and Germany according to the Global Peace Index:
The US Department of State gives Hungary a Level 1 classification, only asking that travelers exercise normal precautions while in the country. There are no specific cities or regions in Hungary that have been flagged as a high-risk area.
Conclusion
As you can see, Hungary is a very attractive retirement destination. It has the perfect combination of low taxes, safe cities, and easy access to other Schengen area countries. If you’re still not sure that Hungary is the right option for you, feel free to check out my full guide on the best low-tax countries in Europe to retire in.