Saturday, 10 October 2026
Hungary’s government is preparing a new annual tax on substantial private wealth that could introduce additional costs for property investors, business owners and individuals holding assets through corporate structures. The proposed legislation would apply to net wealth exceeding HUF 1 billion, approximately EUR 2.7 million, with rates ranging from 1% to 1.5%. If adopted, the measure could influence how high-value property portfolios and privately owned businesses are valued, financed and held.
Under the proposal, individuals would pay 1% annually on taxable wealth above HUF 1 billion, with a higher rate of 1.5% applying to the portion exceeding HUF 100 billion. The calculation would generally take account of qualifying liabilities, meaning the tax would be assessed on the difference between recognised assets and deductible debt. The government intends to introduce the legislation before the end of 2026, with the first reporting obligations expected in August 2027, based on asset values at the close of this year.
The proposed framework would cover a broad range of holdings, including residential and commercial real estate, financial investments, company ownership interests and other valuable assets. Hungarian tax residents could be assessed on qualifying assets held both domestically and internationally. Foreign individuals could also become liable where they own Hungarian property or interests in businesses connected to Hungarian real estate. This cross-border dimension makes the proposal particularly relevant to international investors using holding companies or other ownership arrangements.
For Hungary’s real estate market, one of the principal considerations is the potential effect on investors with substantial property holdings. Individuals owning multiple residential buildings, commercial premises, development land or income-producing assets could face an additional recurring financial obligation where their total taxable wealth exceeds the threshold. Although the legislation would not impose a general tax on every property transaction, it could affect the annual cost of maintaining large investment portfolios and influence longer-term ownership decisions.
Privately controlled property development and investment companies could also face additional scrutiny because their ownership interests would form part of an individual’s taxable assets. The proposed valuation approach for unlisted companies would consider financial indicators such as shareholder equity and earnings rather than relying exclusively on the original acquisition cost. For businesses holding substantial real estate, this could create differences between accounting values, estimated market values and the figures ultimately used for taxation. The treatment of company ownership would therefore be particularly important for family-controlled developers and investment groups.
Property valuation is another area likely to require attention. The draft legislation provides several methods for determining the taxable value of Hungarian real estate, including recent transaction evidence, adjusted historical prices and independent assessments. Owners of properties with limited comparable market data, such as specialised commercial buildings, development sites or mixed-use portfolios, may need additional professional advice to establish appropriate valuations. The administrative costs associated with these assessments could become a consideration alongside the tax itself.
The proposal also addresses assets held through trusts, private foundations and international ownership arrangements. These structures could face separate reporting and taxation requirements depending on their legal establishment and management arrangements. Provisions intended to prevent the artificial reduction of taxable wealth would also examine certain asset transfers dating back to May 2026. Consequently, investors considering changes to ownership structures would need to assess the potential consequences before completing transactions.
For international capital active in Hungary, the proposed treatment of non-residents could introduce further complexity. Investors holding Hungarian property directly or through companies established abroad may need to determine whether their interests fall within the legislation. Existing double-taxation agreements could provide relief in certain circumstances, although this would depend on the specific treaty provisions and the nature of the assets involved. The interaction between Hungarian taxation and obligations in an investor’s country of residence may therefore become an important consideration.
The introduction of an annual wealth tax was among the policy commitments advanced by the Tisza Party before forming Hungary’s new government. The proposed implementation timetable would bring the measure into effect in December 2026, with the first assessment linked to year-end asset ownership. However, the legislation remains subject to the parliamentary process, and its final provisions, exemptions and administrative requirements could change before adoption.
For Hungary’s property investment sector, the proposal represents a potential change in the financial considerations surrounding substantial private asset ownership. Its eventual effect will depend on the final legislation, the treatment of liabilities and ownership structures, and how taxable values are determined. While the measure is not yet law, investors with significant Hungarian real estate exposure may need to incorporate the proposed requirements into their year-end financial and ownership planning.
Source: CMS
