Hungary’s government plans to tax wealth above one billion forint at 1% a year. The proposal goes to parliament in October, alongside the 2027 state budget.
Balint Ruff, the minister leading the Prime Minister’s Office, said on Wednesday that the drafting is finished. He told the news website Telex there will be a wealth tax, and that in practice it reaches income and wealth above one billion forint.
Ruff gave no rate and no asset list in that interview. Both were already public.
Finance Minister Andras Karman set out the design in June. The rate is 1% a year.
It applies above one billion forint, to financial assets, property, securities, and stakes in companies.
Peter Magyar’s government expects 300 to 600 billion forint a year from the tax. The cabinet has just amended its budget, widening this year’s deficit target.
Magyar’s own figure has tightened since he put the idea to voters. His original plan taxed wealth above five billion forint.
Hungary levies no wealth tax today. PwC’s Worldwide Tax Summaries and the tax advisers WTS Klient both record that no tax on total net wealth has existed there.
The valuation problem that killed the last one
Hungary tried this in 2009 and the Constitutional Court struck it down within months.
The court annulled the residential property provisions of Act LXXVIII of 2009 with retroactive effect. Taxpayers had to declare a market value for their own property, the tax authority could substitute its own figure, and a wide enough gap drew a penalty.
Market values can swing by as much as 40% with no transaction to fix them, the court found. So the law pushed the whole risk of that uncertainty onto the taxpayer and breached legal certainty.
This plan meets the same problem in a harder form. Government communications expect most of the revenue to come from business assets, and Index calls the valuation of company stakes one of the most sensitive questions in the whole design.
Magyar points more and more to the Swiss model, where a working tax system already prices stakes in private companies.
Sandor Csanyi, chairman of OTP Bank, told Index he does not understand why some Hungarian billionaires are already pledging support for the plan “without knowing its concrete details, the tax’s structure and its rate.”
One design question is unresolved in public. Nobody has said whether the 1% applies to wealth above the threshold alone, or to a whole estate once it crosses one billion forint.
A short list, and a country leaving it
Hungary would become the fifth OECD member to tax net wealth. IMI counts Norway, Spain, Switzerland, and Colombia across the 38 members, with France, Italy, Belgium, and the Netherlands taxing narrower classes of asset.
Norway is moving the other way. A government-mandated commission reported in June that Norway’s wealth tax rate should come down, and departures by wealthy Norwegians are the reason it was asked.
Guest investors fall outside the residence test
Hungary’s Guest Investor Program grants a residence permit, and a residence permit does not make anyone a Hungarian taxpayer.
Hungarian tax residence turns on a short sequence of tests. A third-country national is resident by default once permanently settled in Hungary.
Three further tests apply to everyone else. Someone is resident when their single permanent home is in Hungary, or when their center of vital interests is in Hungary.
The 183-day count is the third test, and it decides what the other two cannot. Someone who spends at least 183 days in Hungary in a calendar year is resident there.
A guest investor permit is temporary, and temporary residence is not permanent settlement. Nor does the program set any minimum physical presence requirement.
So an investor who qualifies and then lives elsewhere is not a Hungarian tax resident, and a residence-based wealth tax would pass them by. IMI’s practitioner roadmap for the program reached the same reading.
Their qualifying investment is a different question. The National Directorate-General for Aliens Policing sets two routes into the program.
An applicant either acquires investment certificates worth at least 250,000 euros from a property fund registered with the Hungarian National Bank, or donates at least one million euros to a higher-education institution.
Those certificates go into a blocked securities sub-account for five years. They are Hungarian assets in a Hungarian fund, and nobody in the government has yet said whether the tax reaches Hungarian assets owned by people living abroad.
The self-employed route many advisers now recommend instead is built around independent work done in Hungary. Someone using it meets the tests above, and pays Hungary’s 15% flat income tax on the income that follows.
That program is small either way. It drew 192 preliminary visa applications and 25 residence permit applications by February 2025, and Tisza has not said what it plans to do with it.
The bill arrives in October. Until it does, nobody outside the government knows which assets it counts.
