Hungary’s Proposed Wealth Tax: Key Details and Implications

Hungary’s newly proposed wealth tax could represent a significant change in the country’s taxation framework. The Tisza-led government plans to introduce the new tax from 1 January 2027, targeting individuals with net assets exceeding HUF 1 billion.

Under the current draft, a 1% annual tax would apply to the portion of net wealth above HUF 1 billion, while individuals with wealth exceeding HUF 100 billion would face a 1.5% rate on the amount above the relevant threshold. The government expects the measure to generate approximately HUF 800 billion in additional revenue over four years, with around 15,000 wealthy individuals and approximately 2,000 wealth-management structures potentially affected.

Importantly, the proposed regime would not be limited to assets located in Hungary. The draft would also cover foreign assets, company participations and assets held through wealth-management structures, including Hungarian trusts and private foundations, as well as certain comparable foreign structures. This means that traditional wealth-planning arrangements may require careful reassessment under the new rules.

The tax base could include a broad range of assets, including real estate, securities, bank assets, company interests, valuable artwork, jewellery and certain high-value vehicles. An individual’s primary residence would not automatically be exempt.

The valuation rules may prove particularly significant. Real estate would generally be valued according to prescribed transaction-based or indexed valuation methods, while non-listed company interests could be subject to a specific statutory valuation formula. This could result in a substantial taxable value even where the company’s book value is considerably lower.

The draft also provides for the deduction of certain liabilities and taxes, including qualifying foreign taxes, property taxes and vehicle taxes, with mechanisms intended to mitigate double taxation.

Perhaps most notably, the first tax liability could already arise based on the taxpayer’s wealth position on 31 December 2026. The first return and payment would reportedly be due by 31 August 2027. Consequently, year-end wealth structuring and asset ownership arrangements may become highly relevant for affected individuals and families.

The proposal is currently subject to public consultation and may still change before becoming legislation. Nevertheless, high-net-worth individuals with significant Hungarian or international assets should closely monitor the legislative process and review their existing ownership, investment and wealth-management structures well before the end of 2026.

For a private consultation, contact our office today!