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Hungary Eliminates Real Estate Investment Option From Guest Investor Program

Hungary takes direct real estate option off menu days before slated opening. Move likely aims to safeguard program integrity and reputation, say experts.

Hungary’s government has eliminated the €500,000 direct property investment pathway from its Guest Investor Program (GIP), according to the Hungarian Gazette’s December 20 issue.

The program now maintains two routes to Hungarian residency:

  • A €250,000 investment in approved real estate funds, or
  • A €1 million donation to public education and cultural initiatives.

This change comes fewer than six months after the program’s July 2024 launch and just days before the real estate purchase option would have begun on January 1, 2025.

Discus Holdings Managing Director Laszlo Kiss attributes the change to Hungary’s evolving housing market conditions.

“At the time, it may have made sense, but now, a year later, Hungary has a housing market strain,” he explains.

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He notes that rents are increasing and assumes the government doesn’t want to “inflame that situation through the GIP by creating more direct competition for real estate.”

Arton Capital President and CEO Armand Arton points to market stability concerns in the decision.

“Looking at the experience of other European countries who allowed unregulated real estate purchases, there were many cases of defrauding clients,” he explains.

While the government has not provided an official reason for removing the real estate option, he suggests the fund structure offers enhanced protections.

“By allowing only the fund to invest in real estate, that’s a much more regulated way for them to know which sector the fund will be investing in, if it’s residential or commercial,” Arton notes.

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He points to programs in Portugal, Greece, and Spain that supposedly faced challenges when property market speculation allegedly led to affordability crises for local residents.

Sprint, the only government-approved fund under the GIP, has appointed Arton Capital Hungary Kft as its official partner and exclusive broker for markets outside China and Greater China, where Sprint maintains two separate entities to handle operations.

Kiss highlights potential market distortions the property option might have caused.

He says if the option had remained, then “properties valued at €350,000 would suddenly become €500,000; this would put more pressure on the market.”

He views the elimination of the real estate option as “a logical approach” that “does not impact the housing situation” while protecting the GIP from “potential abuse from bad apples as well as potential public outrage or negative media coverage.”

One World Migration CEO Anastasia Barna suggests the change aims to “consolidate the fund pathway,” noting that this intention existed from the program’s inception.

She points to the initial real estate threshold (double that of the fund option) as proof of her point.

She says the government initially preferred to “focus on funds” as they fit their economic objectives better, and now they’ve decided to “commit fully” to that plan.

Applicants must submit their residence permit applications within 30 days of their first legal entry into Hungary.

The program maintains its original benefits package, granting successful applicants a renewable ten-year residence permit and potential paths to permanent residency after three years.

Russian Nationals No Longer Eligible, Barna Says

Barna has also said that the program is not accepting Russian nationals, including those holding second citizenship.

She says this policy “reverses previous guidance where applicants were told they could qualify if they had a second citizenship or European residency.”

The Hungarian government has not issued an official public statement on the policy change, and Barna says that this may be a current shielding measure for the program until Hungary makes a “concrete decision on the matter.”

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