Is it worth it to legalize your rental?
August 18th, 2015

According to experts it is much more profitable to rent your estate legally for a number of reasons – and not just because you won't have to worry about paying heavy penalties.

Signing a contract provides security for both the landlord and the tenant. If you have a valid contract, a great number of disputes can be settled quickly. If you don't have a signed contract, settling these can take a very long time – but if you do, you can even avoid conflicts before they arise.

Leasing contracts authenticated by a notary will provide more security, as it is an enforceable legal document. With it long years of judicial proceedings can be averted if the tenant uses the apartment unlawfully. The deposit which is agreed on in the contract will grant additional security. The deposit can currently amount to three months of rent according to the civil code.

The landlord is obliged to report that they rent their estate and all revenues resulting from this to the tax authority. It's not a problem if they don't want to give an invoice: they only have to possess a tax identification number and report their revenues every year.

According to experts, a lot of people are still renting out their estates illegally, without reporting it to the tax authority, despite only the fact that a stranger lives in a high-value estate would make it justified to have the legal protection that a contract can provide.

(Source: http://www.napi.hu/ingatlan/lakast_ad_ki_vagy_berel_ezt_jo_ha_tudja.601596.html)