Independent property valuers and valuation requirements – based on the draft

Where expert valuation would fit

Under Section 17, domestic-property valuation would not always begin with an expert. A qualifying transaction value from the preceding twelve months would take priority unless a material legal, technical or use-related change had occurred. An applicable indexed transaction value would follow, then the tax authority's mass-model value. A material change after a recent transaction would trigger the reference to Section 19(3)–(4) in Section 17(1).

Section 17(4) would allow compliant expert market value instead of indexed or model value. Departure from a recent transaction value would require credible evidence that transaction-specific circumstances or price-setting factors unrelated to market value meant it did not reflect year-end market value. If none of the first three methods worked, expert valuation would cease to be merely optional.

Authorisation and independence

Section 19(1) would distinguish eligibility by property type and location. Domestic non-farmland could be valued by a registered forensic expert authorised in property valuation or a person on the tax authority's special register. Domestic farmland would require a forensic expert authorised in farmland valuation. Overseas property would require authorisation under its country's law, rather than automatically requiring Hungarian registration.

Independence from the taxpayer would apply throughout. For wealth-management taxpayers, Section 19(1) would extend it to the settlor, founder, joining contributor, trustee and beneficiary. Entry into the special register under Section 19(2) would require an application by an appropriately authorised individual on the externally referenced statutory register, with five years' documented valuation experience. The draft would refer to those external registration rules without detailing their further content.

The significance of HUF 500 million

Under point 20 of Section 2, property would qualify as high-value if its specified calculated or expert market value reached HUF 500 million. This would classify the property for valuation purposes, rather than establish the HUF 1 billion net-wealth threshold. Section 19(3) would reserve expert valuation of domestic, non-farmland high-value property exclusively to forensic property-valuation experts.

That restriction would also apply where a valuer on the tax authority's special register initially produced a valuation reaching HUF 500 million. Section 19(3) would then require a forensic property expert's report for the draft's purposes. Separately, subsection (7) would require at least two methods for high-value property. The special domestic authorisation requirement and the high-value methodological requirement would therefore remain distinct.

Which valuation date could be used?

Section 19(4) would generally require market value as at the reference year's final day. A valuation dated within the previous twelve months could also qualify if neither the property's legal, technical or use condition nor property-market conditions had changed materially. An earlier report's acceptability would consequently depend on intervening changes as well as its age.

For domestic property, Section 19(5) would permit a valuation date more than twelve months but no more than ten years earlier, with appropriate indexation and no material legal, technical or use-related change. Annex 2, point 1.5, would substitute expert value and valuation date for transaction data; its points 2 and 3 would govern dwellings and farmland. Section 15(5) would govern other property types, while Section 17(6) would specify the indexation tool.

Methods, weighting and twenty-per-cent differences

Section 19(6)–(9) would permit market-comparison, income and cost methods. Reports would identify the method, resulting value, data and sources, significant assumptions and value adjustments. For high-value property, they would explain the weighting of at least two methods and justify any omitted method. The final value would not be an unexplained selection.

Section 17(5) would require further explanation where expert value differed by more than twenty per cent from transaction, indexed or model value. Reasons, individual circumstances and value-forming factors would need detailed presentation. The difference itself would not preclude using expert value. This would be an explanation threshold, not a permitted valuation range, and would not remove the separate conditions for departing from recent transaction value.

Audit protection, not a valuation guarantee

Under Section 27(2), a higher property value established on audit would not attract a tax penalty or late-payment surcharge on the resulting shortfall if a qualifying expert valuation had been used. The report would need to meet substantive and methodological requirements. The taxpayer would have to disclose all known necessary information fully and truthfully, without misleadingly influencing the result. Merely appointing an expert would not suffice.

Section 27(3) would expressly preserve assessment of the tax difference, so protection would not make the declared value conclusive. Under subsection (4), proven tax-avoidance undervaluation would cause the authority's ordinary market value to replace transaction value. For unregulated procedural questions, Section 27(1) would refer to the Art. and Air.; their unstated external rules would not follow from this account.

Expert fees and registration consequences

Section 9(2)(a) would reduce tax only for independent expert, valuation or business-valuation services compulsorily required by the draft. Fifty per cent of invoiced fees actually paid during the reference year or before filing, including borne VAT, would qualify, capped at HUF 2 million. An optional property valuation would not therefore establish universal fee relief, and the reduction would concern tax rather than the tax base.

Section 19(10)–(12) would require removal from the special register following at least three qualifying final decisions within one year finding a valuation below seventy per cent of market value because of professional or statutory valuation breaches. Decisions would need to remain unchallenged or be upheld in litigation. Removal reasons would identify the affected valuations; re-entry could be requested after two years. Not every valuation discrepancy would automatically produce removal.

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