Moving to Hungary and finances

I think yes Hungary is cheaper in some regards to Western Europe but I do not feel one should compare it to Western Europe due to Hungary does not offer and have the economy of Western Europe. I feel Hungary is very overpriced! For this economy things should not be the prices of Berlin, or London, Paris etc on many things as those are not Budapest.

And i feel many items are of lower quality so you are really paying more!

As a Non EU person Hungary is not really much cheaper than Western Europe due to many of the cheaper things are kept to Hungarians or at least EU people. So I will just as a non EU person the savings i much smaller.

Or I will say that in Hungary bias and discrimination is very high and negative attitudes to where one has to fight to get people to do basic things that they legally have to do, or should do. Like cheaper housing is irrelevant if one can not get someone to sale you a place, so no it is not cheaper. Or you have a repair and get 40 different repairman/companies say they will not fix a shower due to you are not a Hungarian? Etc

I think one just has to look at how they fit in the society and does it work for the things you want and that is really a measure of prices.

Of course for services you have to be prepared to pay more then locals, but I think that is for most countries where you live as an expat, admittedly in Hungary perhaps even more. Indeed a balance of many factors, me and my wife can choose to live where we want (we are EU citizens) and for us Hungary worked out fine (of course finding the right job (if you need any) with the right remuneration is not easy, but then again we can choose, perhaps not all of us can, EU citizens can and we chose to live (and work) in Hungary, work/life/finance balance works out fine. I could have a job in Luxembourg, but looking at renting prices/cost of living combined with daily stress and pressure made us choose for Hungary.


For money just do not go to Hungary, loads of opportunities in Europe, for quality of living Hungary is a yes (in my view). Budapest is too big for me. Even if you are considered a (rich) foreigner life is good but you have to pay a price. Pluses minuses like everywhere. (In general I like Hungarians (in my case in the countryside))


I am speaking from a comfortable background though so my view is probably biased and I am a bit older then most of working people (I did that in my past).

I know life is not fair, it never is, but I prefer to pay 100% more for a guy who looks seriously at your boiler rather then a correct price to a guy who pretends and gets his bill and delivers nothing.

My initial post makes provisions for this, make savings one off by moving countries and then pay 400 times extra for good service. (Boiler maintenance, fire place, ..). Money will pay for quality.

For non-EU persons life of course can be more difficult, perhaps even depending on race and country, I am not going into that topic, the initial and this post was and is meant to be financially. I am Dutch and I did not experience any issues with regards to my home country, but I am admittedly Caucasian (my luck perhaps), what I did experience as indicated are higher prices and unwillingness to serve foreigners by some (I accept)  (then again I do not like formal service, I like real service and support)

Would you believe in Luxembourg we paid EUR 200 for somebody having a look at a shower not working for half an hour and not being able to solve. In Hungary you can work on no cure no pay, but if cure pay EUR 40 (which is already very good for most).
Find a "Hausmeister" (caretaker of your issues) for you and pay him. (He will get his commission)

I agree with Felicia on many things about Hungary.
We are both Americans so perhaps our expectations are high.
Nothing wrong with that.
I just returned to HU from a 5 month vacation in the US.
I am a bit depressed to be back in Hungary, even with their low prices.
Hard to explain, could be the sour faced people I see everywhere even at my own doorway of the house.
I have been back less then 3 weeks and on 3 different daytime errand walks I have had 4 Gypsy Men act weirdo with me on the street.
Kept on walking but dang, what a freak show in Hungary.
I do not wish to be housebound because people are too odd even in the daytime.
Ok, sorry Gypsy men I was minding my own business when you decided to walk on both sides of me at once and try to share your open can of beer at the same time,excuse me!
Things are cheaper here but so are the people on the streets.
We can save more then half our monthly income by living in Hungary but sometimes I do wonder if it's worth it.
We are now "old" mid 60's and early 70's...Think soon enough we may have to leave here and move to a peaceful safe senior style housing area.
We are in great health, have a young attitude about life but can see the dangers of being around idiots who could be dangerous.
People do say Hungary is mostly safe but from my experiences I'd say I lived in better areas in the US, at least people weren't drunk in public in my old neighborhoods or screaming in your ears because they couldn't get a sip of beer on demand.
Live in the 7th district, thought that was a so called middle class hood, maybe not?
Think sometimes all the old style Hungarians have moved and only trash people have moved in to replace those who left the country.
I have no clue how things are in western Europe but if HU is great then I think the west is lost.
I'm ethnically half Ruysn( a Slav from Poland) German, British and a dab of Mohawk although no one would guess that one. I have family on my side from HU as well. Ruysns born in Hungary.
My husband is 100% Hungarian and the first in his fam to ever leave HU to live in the west.
Even he misses the US as far as being allowed to be yourself without anyone giving you a second look.
We also have been scammed a few times in HU these days we are wiser, I do not go into shops before the deal is done. Not exactly a good feeling to know the price might of been higher just because I'm from the west.
In the US we never do such things because of where someone is from.
All I can honestly say is when we bought our flat 12 years back we did intend to remodel the place. Now, I will not sink a dime extra into the apt.
Just feel it's about time to move on.
Hungary is beautiful but in so many ways the people have not caught up to western standards and are way to rough for us.
I've been in hospital in Budapest twice for joint issues and my husband once for a minor hernia surgery.
I have to honestly say it was a nightmare for me both times.
First was the worst but even the second time as a day surgery it was odder then it should of been,.
Took our tips but never even addressed my issues, what a waste of a hospital bed, money and everyone's time.
Not a great place if your health goes bad or your mind is gone in old age, too scary to think about it.
ATM I am very confused about living here much longer, the US does have it's issues but they aren't anything like the issues of living here.
You probably will never have any close friends here in HU, people are not very open to outsiders here.
You can save some money but what good is money when you are afraid to show it.
We used to wear our best clothing out and drive a nice BMW.
Decided life is allot easier if you dress a bit more simple and drive an  average simple car.
Thought about leaving the city but not so sure we would enjoy being the "westerners" in a village.
All the political stuff here is making many locals dislike all foreingers  , doesn't matter where they come from, if you do not speak Hungarian then you are an outsider and not a person who matters much.
Not me saying that, it's just the way it goes.
Hate to be negative but just wait until you get a bit older, then you'll see how it is to be an outsider in Hungary.
Hard enough to age but when people see you as a easy meal ticket it is not exactly comforting.
Come from a middle class American background, never really had to work in all my years of marriage and we both quit work more then a decade sooner then getting full benefits.All because we moved to HU where we could live for so much less.
We also have lowered our living standard allot by living here. Just got used to it but it's lower level then in the US. That could be the biggest reason we can save here, we live cheap.
Was good but prices here are catching up to the west while the people are still so Iron Curtain in many ways.
Or course once the sun comes out and the flowers appear, my mood will once again change.

cdw057 wrote:

All know VAT in Hungary is high, make use of it. (good for Hungary, good for you and possibly good for your ex -employer

Curious.

Care to explain how you see VAT as good in all those cases you mentioned?

One example: VAT has certainly not been good for me. Such as when I had to pay an extra 1,000ish Euros for a 2,000ish Euro purchase, as one example. And remember, I am an American. Where we don't have VAT. And some states don't even have sales tax. So, again, how does coughing up an extra grand, to do regular retail business, benefit me? If one makes 100,000 Euro a year, 1,000 Euro is not much. But if one makes only 10,000 Euro a year that 1,000 VAT tax is quite a hit. VAT is a well known disproportionate tax on the poor. And so there is a level when VAT rates are actually not cost effective, and become a drag on society. Look it up. Hungary is probably near or at that level.

Marilyn Tassy wrote:

Hungary is beautiful but in so many ways the people have not caught up to western standards and are way to rough for us.

As one silly retail example: I tried to get loctite 545 thread sealant recently. Nobody locally carried it. Seriously.... That is silly.  You can trip over this stuff in the USA. It is everywhere. A recent friend visiting from the USA was joking with me if he knew, he would have brought a case of the stuff for me.

And, if one ever checked, many products available in Western Europe are not readily available in Hungary at all (or a delayed by months to their Western Europe availability). Gets tiring. just a few hundred KM and you can not get some things because of a border....

Marilyn Tassy wrote:

All the political stuff here is making many locals dislike all foreingers  , doesn't matter where they come from, if you do not speak Hungarian then you are an outsider and not a person who matters much.
Not me saying that, it's just the way it goes.

True.

And I think that expats that live more in an expat bubble (such as those that don't have Hungarian spouses) are less aware of these trends.

On the VAT, I realize I am in a specific situation, you can only make use of VAT if you collect VAT, ie you have to have a company and create VAT to be paid to you. If you were to deliver services to companies they often do not care too much about VAT as they can offset VAT themselves on products.
Running a company is not too expensive (of course there are costs, but if you are your own employee, healthcare and pension as well as salary is not a real cost, the income tax of 15% is very low in European comparison).
I have to say unfortunately VAT on the purchase of a company car can not be offset, but can be on car repairs,  business lunches, accounting company (which I need anyhow privately as well), some insurances, etc. Tricky things are also possible, but I try to go by the rules and do avoid borderline temptations.
Most of us will have a car, having the cars depreciation against your profit is of course very attractive (providing your company creates sufficient revenues).

I also see VAT as a kind of income tax but a flat rate of 15% is hitting the poor as well.
What I can say is that if you can generate revenues of lets say EUR 2000 pm, your "employer" does not have to worry on social security, redundancy considerations, headcount concerns, ….
You will have minimum wage as a director, your spouse would be insured if he or she would work part time (gap in Hungarian tax system, you can employ the spouse for 20% against minimum (ie just over HUF 30 K pm, and he/she would still have health insurance against less then official minimum). You will also drive a very convenient car against the company (as a side note incredible what discount you can get if you buy a car as a company compared with what private persons can obtain).

Overall VAT is of course hitting all of us very hard and if you can get nothing back it is very frustrating, but VAT clearly is helping the Hungarian budget, if I can get something back within the rules I only welcome it.

I am a bit in conflict here, on one side I like the low income tax rates (for pensioners even zero, partially driven by the fact that people do not live healthy and health care might be more advanced). On the other side VAT is hitting all (and perhaps society and economy as a wholed), but also helps for me personally, I just have to make the best of it where I can.


Apologies if the post sounds chaotic and unclear.

cdw057 wrote:

On the VAT, I realize I am in a specific situation, you can only make use of VAT if you collect VA.

Correct. And in Hungary, you do not have to register or collect VAT unless your income is more than 8,000,000 HUF (25,400 EUR).

cdw057 wrote:

if you can generate revenues of lets say EUR 2000 pm

Or 24,000 EUR a year. Which is less than 8,000,000 HUF. So at that income, one *could* decide to go VAT free if one wanted in Hungary.

So, if one is below the VAT threshold collecting and dealing with VAT is a waste of time and money (since you have to pay your accountant to deal with it). Unless your (EU ) clients require it. But that is your problem... Because you have EU clients. And if you only export outside the EU you do not have to collect any VAT at all. Zero. Despite income. Because export tax rules then apply.

So in short, you are only talking about your special case, or people that are similar to your case, where you either make more than 8,000,000 HUF or you are selling in the EU and need to register and collect VAT. But not in any way describes all possible tax bases. Such as mine. Not close at all. And VAT does not work for me at all. Just saying....

klsallee wrote:

Marilyn Tassy wrote:

Hungary is beautiful but in so many ways the people have not caught up to western standards and are way to rough for us.

As one silly retail example: I tried to get loctite 545 thread sealant recently. Nobody locally carried it. Seriously.... That is silly.  You can trip over this stuff in the USA. It is everywhere. A recent friend visiting from the USA was joking with me if he knew, he would have brought a case of the stuff for me.

And, if one ever checked, many products available in Western Europe are not readily available in Hungary at all (or a delayed by months to their Western Europe availability). Gets tiring. just a few hundred KM and you can not get some things because of a border....

It's not such a silly example.

I had to get my Loctite thread lock in the UK and bring it back here.  It was crazy difficult here to get even something similar.   

In the end, I couldn't get the specific Loctite number I needed (super strength) so I had to get a substitute and in my opinion it worked the same.  Cost about HUF 1600. 

I even got 6 tubes so I had some spare. Surprising how useful it is.

I think it's possible to get stuff here, the problem is just finding it at a reasonable price.  Professionals can find it but where and how do they know? It's almost the same as "knowing a guy".

It's one of those things. If you see it, buy 6 tubes because you might not see it again for a couple of years.

There's always Amazon.de mail order!  I know you said "locally" but beggars can't be choosers etc.

klsallee wrote:

And in Hungary, you do not have to register or collect VAT unless your income is more than 8,000,000 HUF (25,400 EUR).

That threshold was raised to 12mil.

atomheart wrote:

klsallee wrote:

And in Hungary, you do not have to register or collect VAT unless your income is more than 8,000,000 HUF (25,400 EUR).

That threshold was raised to 12mil.

Thanks for the info. 

I can clearly not personally keep up with the law change here anymore. Probably why they require all businesses to have an accountant.