Tuesday, 10 November 2026
Hungary is preparing further changes to its tax system for 2027, including the removal of the expiry date for the reduced VAT rate on newly built homes, new reporting requirements for businesses and a proposed tax on certain assets held by individuals leaving the country. The measures are included in legislation submitted to Parliament on 27 October 2026 and form part of a broader government tax reform programme.
Under Bill T/927, the existing 5% VAT rate applicable to qualifying new residential properties would continue without a fixed expiry date. The measure would provide greater certainty over the tax treatment of eligible housing developments, although developers would still need to meet the conditions governing the reduced rate. The proposal could be particularly relevant to residential projects with construction and sales schedules extending beyond 2027.
The government also intends to introduce compulsory electronic VAT reporting in stages. From 1 July 2027, the requirements would apply to the largest taxpayers submitting monthly VAT returns, before extending more broadly from 1 January 2028. The system would require transaction-level reporting, increasing the importance of accurate accounting records and compatible financial systems for affected businesses.
Another significant proposal concerns individuals who cease to be Hungarian tax residents. An exit tax would apply to certain unrealised gains on financial assets, including securities, company shareholdings and cryptocurrency holdings. The rules would target individuals who have been Hungarian tax residents for at least five of the previous ten years and whose relevant assets exceed HUF 500 million, or who hold a qualifying shareholding of at least 20% worth HUF 250 million or more.
The proposed exit tax would apply where Hungary loses or restricts its ability to tax subsequent gains. Individuals relocating to another EU or European Economic Area country would generally receive an automatic interest-free deferral, subject to conditions. The measure could be relevant to private investors and company owners with substantial Hungarian shareholdings, although the proposal does not establish a general departure tax on all residential or commercial property holdings.
Hungary is also planning to restore its advertising tax, which has been effectively suspended through a zero rate. The proposed system would introduce progressive taxation, starting above HUF 500 million in taxable advertising revenue and reaching 7.5% for the highest band. Related companies’ tax bases would be combined, while advertisers could face additional tax obligations when dealing with publishers that do not meet the registration and compliance requirements.
The legislation would strengthen rules intended to prevent artificial arrangements designed primarily to secure tax advantages. The proposed changes would place greater emphasis on the commercial substance of transactions and could affect the scrutiny of corporate structures, related-party arrangements and business reorganisations. Transfer pricing information would also be submitted separately from corporate income tax returns.
Other measures would increase the rehabilitation contribution for employers with at least 250 employees, adjust company vehicle taxation and introduce changes to selected excise duties. The proposed reforms would accompany a separate bill establishing a 15% corporate income tax rate for qualifying large companies, while retaining the 9% rate for most businesses.
For Hungary’s property sector, the continuation of reduced VAT on qualifying new homes is among the most directly relevant measures, offering greater predictability for residential development planning. Mandatory electronic VAT reporting and changes to tax compliance would also affect larger developers, investors and property operating companies. The legislation remains under parliamentary consideration, and its final provisions and implementation dates may change before adoption.
Source: CMS
