Hungary Plans Wealth Tax Above 1 Billion Forints

Hungary intends to introduce an annual wealth tax targeting large fortunes from 2027. The government has confirmed a threshold of 1 billion forints, equivalent to about $3.1 million at current exchange rates, but final legislation has yet to be published. Earlier proposals envisaged a 1% levy on the portion of net wealth exceeding the threshold and a broad base potentially including real estate, company stakes and financial assets. Those details remain proposals rather than enacted rules. The government estimates that the tax could eventually raise 300 billion to 600 billion forints a year.

Hungary Confirms Plans for a Wealth Tax

Hungary’s government confirmed on Sept. 2 that it intends to introduce a tax targeting the country’s largest fortunes.

Bálint Ruff, the minister heading the Prime Minister’s Office, said the rules had been under preparation for some time and referred to a threshold of 1 billion forints.

Bloomberg values that threshold at approximately $3.1 million and reports that the measure is intended to be introduced next year. Final legislation defining the tax rate, asset base and assessment methodology had not been published as of Sept. 2.

The distinction is important. The policy decision and threshold are increasingly clear, but investors still cannot calculate an actual future liability from the information currently available.

The 1 Billion-Forint Threshold Is Confirmed

In his interview with Telex, Ruff confirmed that Hungary will have a wealth tax linked to the 1 billion-forint threshold.

Telex’s summary refers to the taxation of income above 1 billion forints, while Bloomberg describes the measure as applying to assets exceeding the threshold. Ruff did not explain the detailed calculation mechanism or provide a complete definition of the tax base in the interview.

Earlier government statements and tax analysis have consistently described the broader policy as an annual tax on wealth. The difference in the latest wording is another reason not to treat the headline threshold as a complete tax rule before legislation is published.

The 1% Rate Remains a Proposed Feature

The clearest description of the expected structure was provided in June by EY Hungary.

Based on information available at the time, EY expected an annual 1% tax on the portion of a Hungarian tax resident’s net wealth exceeding 1 billion forints, then equivalent to approximately €2.81 million.

The distinction between total wealth and wealth above the threshold is substantial.

Under that model, an individual with net assets of 1.2 billion forints would have 200 million forints in the taxable band rather than the entire 1.2 billion. A 1% levy would therefore amount to 2 million forints.

That is an illustration of the earlier proposal, not a calculation under enacted law.

Real Estate Could Be Included

The expected tax base has been described as broad.

The June concept potentially covered real estate, bank deposits, brokerage and investment accounts, cash, securities, company holdings and possibly certain vehicles and other high-value personal assets.

For property investors, this means the 1 billion-forint threshold may ultimately apply to an individual’s combined wealth rather than to a single property.

A person owning 600 million forints of real estate and another 600 million in company interests could therefore exceed the threshold under a broad net-wealth regime even though neither asset alone is worth 1 billion forints.

Important details remain unresolved, including possible relief for a primary residence, deductions for mortgage and other debt and the method used to value property.

Legislative Preparation Began in May

The policy has already passed an important formal stage.

Government Resolution 1147/2026, published on May 14 in the official Magyar Közlöny, ordered preparation of legislation establishing the legal framework for wealth taxation. The finance minister was given a June 5 deadline for the preparatory work. The resolution also called for legislation related to ending the tax exemption associated with trust-based asset management.

The resolution itself does not impose a wealth tax. It launches the legislative process, which is why parameters discussed since May need to be distinguished from rules already in force.

Implementation Is Planned for 2027

Prime Minister Péter Magyar said in June that the government was examining several versions of the tax.

At the time, the government intended to link legislation to preparations for the 2027 budget. Bloomberg Law reported that Budapest expected annual revenue of 300 billion to 600 billion forints and was considering company stakes, real estate and other assets as part of the base.

Government statements in June indicated that legislation could be adopted by the end of October, potentially allowing the rules to take effect on Jan. 1, 2027.

As of Sept. 2, it is more accurate to describe 2027 as the intended start year rather than to present Jan. 1 as a final statutory effective date.

Private Company Stakes Could Dominate the Base

Property may be the most visible potential component of the tax, but company ownership could account for a larger share of taxable wealth.

Magyar previously indicated that a substantial portion of the base was expected to consist of company stakes. One idea under consideration was to use company values at the end of 2025, based on financial statements filed in 2026.

Valuing private companies will be one of the most difficult technical issues.

Publicly traded shares have observable market prices. A family business, private developer or industrial company does not. Its value can differ materially depending on whether authorities use book value, earnings, cash flows or comparable-company multiples.

The final valuation method could therefore substantially alter an individual taxpayer’s assessed wealth.

Government Targets Up to 600 Billion Forints

Budapest has estimated that the new tax could eventually raise between 300 billion and 600 billion forints a year.

Research group GKI compared that target with available wealth data. The combined fortune of Hungary’s 100 richest people was estimated at 12.579 trillion forints in 2026. Applying a simple 1% rate to that entire amount would generate approximately 125 billion forints.

That calculation should not be interpreted as disproving the government estimate. The rich list covers only 100 individuals, while a wealth tax could reach a significantly wider group.

GKI also cites household holdings of unlisted company shares at roughly 40 trillion forints and household non-financial assets at around 235 trillion forints at the end of 2025.

The institute therefore concludes that revenue at the government’s target level could be possible if the tax base is broad and exemptions remain limited.

Hungary Is Seeking Additional Fiscal Revenue

The reform is being prepared as Hungary revises its public-finance outlook.

The government has increased its 2026 deficit target to 7.5% of GDP. The public debt ratio could temporarily rise from 74.6% to 77.5% of GDP this year before the authorities expect it to begin falling again.

Those figures appear in the government’s August budget revision statement. A detailed medium-term debt-reduction plan is due to be published alongside the 2027 budget proposal in October.

Even the upper estimate of 600 billion forints of annual wealth-tax revenue would not resolve the fiscal imbalance on its own, but it could become a recurring additional source of revenue from 2027.

Trust Structures Are Part of the Reform

The treatment of assets held through trusts could prove important for large private fortunes.

The May government resolution links preparation of wealth taxation with ending the tax exemption associated with trust-based asset management.

This could limit one of the obvious ways in which assets might otherwise sit outside direct personal ownership.

The detailed attribution rules remain unknown. Legislation will need to determine whether assets held in such structures are attributed to the original owner, the beneficiary or another legal person for wealth-tax purposes.

That could have a substantial impact on family wealth and complex private ownership structures.

Tax Residence Will Matter for Foreign Investors

The working model described by tax advisers has focused primarily on individuals who are Hungarian tax residents.

It remains unclear whether residents will be required to include worldwide assets or only property and investments located in Hungary.

Public discussion has also touched on anti-avoidance measures for wealthy individuals who change tax residence before the new regime takes effect, including a possible exit tax. No such mechanism has yet been enacted.

The distinction matters for international property owners. Owning valuable Hungarian real estate and being a Hungarian tax resident are not the same legal circumstance.

It is therefore premature to conclude that every foreign owner of Hungarian property above a particular value will automatically become liable for the new tax.

Property Creates a Valuation Challenge

Unlike cash or listed securities, real estate has no continuously observable single market price.

A standard Budapest apartment can be assessed using comparable transactions. An historic villa, hotel, development site or specialised commercial property may have a much wider valuation range.

An annual wealth tax would therefore require rules defining how often property values are updated, who performs the valuation and how taxpayers can challenge assessments.

Debt treatment is equally important.

A property worth 1 billion forints with no borrowing attached creates a very different net-wealth position from an identical property with a 600 million-forint outstanding mortgage.

For property investors, debt deductions may ultimately matter as much as the headline tax rate.

Final Legislation Will Determine the Market Impact

Three elements are reasonably clear by early September: Hungary intends to introduce a wealth tax, the government is using 1 billion forints as its threshold, and implementation is planned for 2027.

The proposed 1% rate, taxation only of wealth above the threshold, complete asset list, company and property valuation rules, debt deductions and exemptions have not yet been established in final legislation.

That distinction is especially important for property owners. It is not yet possible to calculate reliably how the tax would affect a luxury apartment, rental portfolio, hotel or commercial building.

As International Investment experts report, the eventual effect of Hungary’s wealth tax will depend less on the widely discussed 1% rate than on the definition of net wealth. Including real estate and privately held companies with few exemptions could create a substantial tax base, but it would also require a complex valuation system. Owners of capital-intensive assets face a particular issue because a high assessed value does not necessarily generate a comparable amount of free cash flow with which to pay an annual tax. Until final legislation is published, it is premature to forecast a decline in Hungary’s property-investment appeal or a direct effect on real-estate prices.

FAQ: Hungary’s Planned Wealth Tax

What threshold is Hungary planning?

The government is using 1 billion forints as the threshold. Bloomberg valued that amount at approximately $3.1 million in early September 2026.

Has the wealth-tax law already been passed?

No. The government has formally ordered legislative preparation and senior officials have confirmed the policy, but final rules had not been published as of Sept. 2.

What tax rate is proposed?

Earlier plans envisaged an annual 1% levy on the portion of net wealth exceeding 1 billion forints. The final rate has not yet been enacted.

When could the tax take effect?

The government intends to introduce it in 2027. Jan. 1 was previously identified as a possible start date if legislation is adopted in autumn 2026.

Will real estate be included?

Real estate was included in the expected asset base described in June. Final legislation still needs to establish exemptions, valuation methods and the treatment of mortgages and other liabilities.

Will the entire fortune become taxable above the threshold?

The earlier model envisaged taxing only net wealth above 1 billion forints rather than the entire fortune. The final mechanism still needs legislative confirmation.

Will privately held companies be included?

Company stakes are expected to be an important component of the tax base. Final valuation rules for unlisted businesses remain unresolved.

How much revenue does Hungary expect?

The government has estimated annual revenue of between 300 billion and 600 billion forints.

Will foreign property owners have to pay?

That is not yet clear. The working model primarily concerns Hungarian tax residents, while rules for non-residents and foreign assets remain to be defined.