By Eva Kovacs, Managing Associate, Jalsovszky
At the beginning of the summer, the regulations governing the land registry in Hungary were amended, introducing significant changes affecting owners of so-called garden plots in the outskirts ( in Hungarian: “zártkerti ingatlanok”), such as weekend houses, garden homes, and similar plots. The practical benefits, however, will largely depend on the location and on whether the local municipality allows their application.
What Exactly Is a Garden Plot in the Outskirts and What’s the Issue?
Garden plots in the outskirts were originally gardens, orchards, or vineyards near residential zones. They often included weekend houses, small holiday homes, or tool sheds. While officially designated for agricultural use, in practice many of these plots are used as residential properties. For example:
- A lakeside weekend house bought for summer vacations,
- A hobby plot with a small structure for storage,
- Or even fully-fledged detached houses in former vacation zones near Budapest now used as primary residences.
- But What is Problem with these plots?
These properties are on the periphery of the Hungarian real estate market. Legally, they are considered special non-urban areas primarily designated for agricultural use and registered as such. Buildings on such plots are often recorded as “agricultural” or “economic” structures rather than residential ones.
This classification presents serious limitations:
Even if a building meets all technical requirements for residential use, its legal classification prevents the owner from obtaining a mortgage or applying for family housing subsidies.
Construction rights (site coverage) on these plots are often severely limited.
Owners may face additional obligations, such as compliance with land protection rules (e.g. cultivation or weed control requirements).
Most importantly, the sale of such properties is governed exclusively by the stricter rules of the Hungarian Land Transactions Act, which includes mandatory posting procedures, pre-emption rights, and more—making transactions slower and often resulting in weaker market positions for sellers.
What Has Changed?
The amendment to the Land Registry Act, which came into effect in July, allows owners of garden plots in the outskirts to rectify the legal status of their properties.
Under the new rules—if the local municipality adopts the relevant decree—owners may request to have their plot reclassified and registered as “land withdrawn from cultivation”.
In practice, this means that the land registry will formally acknowledge that the property is no longer used for agricultural purposes, thus aligning its legal classification with its actual usage.
Furthermore:
- The reclassification can apply to the entire plot or just a defined portion of it.
- This marks a major step in resolving the long-standing discrepancy between usage and legal status.
However, the current legislation only provides a framework. The specific details will be outlined in a forthcoming government decree. Additionally, local governments play a key role, as they decide in which zones such reclassifications will be permitted.
What Does This Mean in Practice?
The amendment provides a central legal framework while leaving room for local discretion. If a municipality opts in and identifies eligible areas by decree, owners of garden plots located in the outskirts can:
- Legally update the status of their property,
- Avoid the complications of agricultural land regulations,
- Sell or utilize their property at a more realistic price.
Additional Benefits:
- The reclassification is not considered “use for other purposes”, meaning owners will not be subject to the land protection levy (in Hungarian: földvédelmi járulék”), which in the past could amount to hundreds of thousands or even millions of forints.
- Once removed from cultivation, these plots no longer fall under the scope of the Agricultural and Forestry Land Transactions Act, so no pre-emption rights relating to agricultural land will apply.
What Should Property Owners Do?
Owners of “zártkerti” properties should carefully monitor the decrees adopted by their local municipality. The opportunity to remove a plot from agricultural use can lead to:
- A clearer legal situation,
- Simplified use,
- And improved marketability.
Originally published on CEE Legal Matters on September 26, 2025.