5% VAT on the sale of storage units and parking spaces

Although the reduced 5% VAT rate has long been applicable to the sale of new residential properties, its applicability to the sale of related storage units and parking spaces had remained uncertain. Based on our experience, the tax authority generally adopted a conservative approach regarding the application of the reduced VAT rate, and as a result, market players typically did not apply it to these ancillary property elements.

Following the relevant judgment of the Curia, we have devoted particular attention to this area. Based on our professional position, which has been discussed with the authorities on several occasions, there were several arguments supporting the view that, in certain cases, the reduced VAT rate could also be applied to the sale of these premises or areas. The uncertainty around applicability primarily concerned whether the transactions in question:

• could follow the VAT treatment of the residential property under the rules of ancillary supply, or
• could qualify for the reduced VAT rate on the basis that the storage unit or surface parking space forms part of the concept of a residential property.

The guidance published by the National Tax and Customs Administration of Hungary (NAV) on 23 April 2026 summarizes the main considerations of these consultations with the authorities and provides substantive guidance for taxpayers.

Sale of Storage Units – When Is 5% VAT Applicable?

According to the position of the tax authority, storage units that are connected to a residential property and serve its intended residential use are considered part of the apartment. Consequently, if the storage unit is sold together with the apartment, the VAT rate applicable to the apartment (including, where relevant, the 5% rate) may also be applied to the storage unit.

However, “sale together” is not merely a contractual issue: NAV emphasizes the importance of examining the economic unity of the transaction, including the buyer’s intention and the actual substance of the transaction.

Calculation of the Usable Floor Area

Under certain conditions, storage units may be included in the usable floor area of the apartment, which is a key factor in determining the applicability of the 5% VAT rate. Inclusion requires, among other things, appropriate ceiling height and construction as a defined room.

This may be particularly relevant for projects where the property is sold close to the applicable floor area thresholds.

Garages and Parking Spaces – Different Treatment

As a general rule, properties serving the parking of vehicles and qualifying as premises (e.g. garages) do not fall within the definition of a residential property and are therefore subject to 27% VAT. If such property parts are sold together with the apartment, the consideration must be split: the apartment may be taxed at 5%, while the garage remains subject to 27% VAT.

Parking Spaces Not Qualifying as Premises

An important element of the NAV guidance is that certain parking spaces that are not constructed as premises may qualify as part of the residential property. In such cases, if they are sold together with the apartment, the 5% VAT rate may be applied.

Whether the area of a surface parking space is included in the 150 m² or 300 m² size threshold depends on how the parking spaces are constructed. As an example, the NAV guidance notes that the net floor area of vehicle parking spaces must be included in the total usable floor area where they are created alongside the external wall of a multi-apartment residential building or residential house, have at least one perpendicular side wall, and are covered to a height of at least 190 cm.

What Does This Mean in Practice?

The guidance confirms that the application of the 5% VAT rate requires a complex assessment, in which the following play a key role:

• the functional connection between the different parts of the property,
• the economic unity of the transaction, and
• the technical and legal design of the property.

Correct VAT treatment may have a significant financial impact; therefore, a review of sales structures and documentation may be justified.

Despite the above guidance, further interpretative questions are expected to arise in practice. These may include, for example, what exactly constitutes a “sale together” and whether any quantitative limitations can be applied to the sale of storage units or parking spaces. To address these issues, careful examination of individual factual circumstances and, where necessary, the involvement of expert support continues to be recommended.

Should you have any questions regarding this topic, our experts would be pleased to assist you.