Hungarian real estate faces regulatory shifts in 2025, say experts at Schönherr Hungary
Hungary’s commercial real estate sector is navigating a period of intensified legal and regulatory transformation in 2025. According to legal experts László Krüpl and Gergely Horváth of Schönherr Hungary, a series of new legislative and policy initiatives are redefining the development environment, requiring developers and investors to adopt more adaptive, compliance-focused strategies.
One of the most significant changes this year is the phased rollout of the new electronic real estate register, introduced under the Act on Real Estate Registration (Act C of 2021) and its implementing decree. Designed to modernise property records and transactions, the system aims to increase long-term efficiency but has introduced short-term complexity—particularly for institutional players less familiar with digitalised land administration. The transition coincides with the implementation of the new Act on Hungarian Architecture (Act C of 2023) and the TÉKA decree, reshaping planning and building requirements across municipalities.
“These reforms require time, training and revision of internal processes,” notes Krüpl. “While they offer long-term benefits, certain investment-critical areas remain unclear, and practical application will depend heavily on case law as it develops.”
Environmental and ESG-related compliance is also taking centre stage. The EU’s Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD), now being transposed into Hungarian legislation, are beginning to reshape reporting requirements. Large real estate players are under pressure to integrate ESG data collection and monitoring into their project pipelines, contributing to a shift in how investment strategies are structured.
Additionally, a proposed amendment to Governmental Decree No. 143/2018—under discussion since June—could change the permitting process for retail units over 400 sqm. If passed, even the transfer or lease of these properties would require a function change permit, a move that may significantly affect leasing and acquisition practices.
Beyond legal registration, zoning and environmental policy have also evolved. The new architecture law places stronger emphasis on green space protection, affecting how developers approach land selection—particularly in suburban areas. At the same time, a policy preference for brownfield development is becoming more formalised. Measures such as the continuation of reduced VAT rates in designated “rust zones” and priority access to energy grid connections further support redevelopment of underutilised land.
“This shift presents both a challenge and an opportunity,” says Horváth. “Developers who align their strategies with sustainability objectives are likely to be better positioned moving forward.”
In the area of construction law, contract terms are shifting toward more balanced risk-sharing. Recent trends show stronger enforcement of liquidated damages, along with greater contractual detail on force majeure and material price volatility. Meanwhile, alternative dispute resolution mechanisms such as arbitration and mediation are becoming standard practice, especially for cross-border projects, offering greater predictability and confidentiality.
There have also been updates affecting tax and financing. As of January 2025, monument-listed properties are exempt from building tax for up to three years post-acquisition, encouraging redevelopment of historical buildings. The reduced 5% VAT incentive on brownfield residential developments has also been extended. Financing incentives, such as green loans and tax advantages for ESG-certified projects, continue to gain traction, often supported by the Hungarian Development Bank.
Looking ahead to the second half of the year, Krüpl and Horváth caution that while market sentiment is showing signs of stabilisation, key legal risks remain. Although vacancy rates have levelled off, financing remains selective, and concerns persist around regulatory unpredictability. Compliance with new ESG rules, zoning restrictions, and sustainability reporting frameworks will be critical areas for ongoing attention.
“In this evolving landscape, proactive legal planning and risk mapping will be key,” the Schönherr team advises. “Developers and investors who prioritise energy efficiency, regulatory compliance, and long-term adaptability will be best equipped to navigate the current cycle.”
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