Certain New Parents Won’t Have to Pay Personal Income Tax and the Baby-Expecting Loan Has Been Extended
The Hungarian government recently announced good news for parents. Various family support schemes have been extended, including the baby-expected loan and personal income tax exemption.
Baby-Expecting Loan
The baby-expecting loan provides prenatal support for soon-to-be parents. It was scheduled to end but has now been extended for two more years. The loan will now be available until December 31, 2024. Given that this is the most popular type of family support in Hungary, this change is likely in response to public demand. This loan has been in place since 2019, and the majority of parents use it to get housing.
This loan is available to families expecting their first child to be born within the next five years. The mother must be between 18 and 41 years old. The prenatal loan is an impressive HUF 10 million (EUR 24,800) and it comes without interest. That zero-interest nature of the loan kicks in when the child is born. Before this, the loan’s interest rate is just 3%. At this point, parents don’t need to make any repayments for three years.
Additional Waivers and Exemptions
The extension of the loan period is not the only big news regarding this baby-expecting loan. Additionally, if a family has a second child, 30% of their outstanding loan is written off. The second child’s birth also extends the repayment suspension for another three years. If they have a third child, the full remainder of the loan is waived.
Personal Income Tax Exemption
For several years, mothers have been able to get a personal income tax exemption. Hungarian officials have now extended this exemption to mothers under the age of 30. Importantly, this exemption applies to both mothers who give birth and those who adopt. It does not discriminate based on marital status. For reference, this benefit previously only applied to mothers under age 25.
The benefit is available for mothers with at least four children. This benefit can save mothers up to 899,914 HUF (over EUR 2,000).
Student Loan Forgiveness for Mothers
Yet another scheme to support parents comes in the form of student loan forgiveness. This applies to women who either give birth while studying or give birth within two years of studying. This student loan forgiveness went into effect in January 2023 and was a new measure. To take advantage of this measure, mothers must submit a child support application to the relevant student loan organization.
Expanded Benefits for Severely Disabled or Chronically Ill Children
While announcing these various family support schemes, the Hungarian government also announced an increase in assistance to parents of severely disabled or chronically ill children. The existing benefits remain in place. But now, eligible families can get a monthly home care allowance equal to HUF 232,000 along with HUF 10,000 in tax relief.
Rural Family Housing Support Extended
Hungary has also extended the rural family housing support scheme. This scheme will now be available until 2024 comes to a close.
Some Parental Benefits Are Gone
While all of the above family assistance schemes have been expanded, some programs have gone in the other direction. Large Hungarian families no longer receive a car purchase benefit. Additionally, the home renovation subsidy has been eliminated.
The Goal of the Family Support
The combination of family support programs serves multiple purposes. One is to encourage Hungarians to have more children. Additionally, the programs ensure that families with children keep more money.
Conclusion
The Hungarian government has extended the duration of multiple family support schemes, including the baby-expecting loan and personal income tax exemption, to encourage Hungarians to have more children. Student loan forgiveness and personal income tax exemption for young mothers was also introduced.
Sources:
https://dailynewshungary.com/prenatal-baby-support-loan-extended-until-end-2024-in-hungary/
https://hungarytoday.hu/government-extends-family-support-measures/
https://hungarytoday.hu/married-couples-spend-baby-expecting-loan-mainly-on-buying-homes/
https://www.bbc.com/news/world-europe-47192612
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