One of the biggest changes to income tax is that the taxable period will be cut from 15 years to five. This means that proceeds from the sale of a flat will be fully taxable in the first year, while the vendor will have to pay tax on 90 per cent of the revenues in the second, 30 per cent in the third and fourth years, and will have no tax to pay in the fifth year.

This means people who bought their flats more than five years ago but less than 15 years ago and who do not wish to reinvest all the capital in a new propoerty would be well advised to postpone selling their flat, according to Tamas Locsei, a tax specialist at PricewaterhouseCoopers. "People who bought a flat in or before 2003 will do well out of this," says Akos Muranyi, an analyst at the estate agency Dunahouse, "because they can sell it tax-free next year, and no longer need to wait the full 15 years."

Proceeds from the sale of a propety remain taxable only if the income exceeds the purchase cost of the property and the transaction costs, according to Gergely Beres Molnar, an auditor and tax consultant. If somebody bought a flat in 2004 for 9m forints and then spent 1.8m forints, selling it for this year for 13m forints, then he or she must pay 25 per cent tax on income of 2.2m forints, or 550,000 forints. If the same flat is sold in 2008, only 30 per cent of the returns (660,000 forints) will be taxable, for a total payment of 165,000 forints. Even though this brings the tax burden down to a third of its previous level, it is not necessarily worth waiting until 2008 to sell up.

This is because flat acquisition discounts come to an end in January. At the same time, for a transitional period, people who spend income earned before 1 January 2008 on a new flat within 60 months of the original sale will continue to benefit from it. Such people would be well advised to sell their property this year, whether this is a dwelling, a plot of land, a garage, a shop or a holiday home. The income from the sale must be declared, but the tax need not be paid if the person buys a flat with the proceeds before the tax filing deadline, which falls on 20 May. Otherwise, the tax must be paid, but the proceeds can be reclaimed if a flat is bought within 60 months.