Hungary’s new government proposes wealth tax of 1% and 1.5%

Hungary is proposing a wealth tax that would apply to high-net-worth individuals, but potentially also to family-owned businesses and cross-border asset structures meeting the HUF one billion (approx. EUR 2.7 million) threshold. The wealth tax is expected to go into effect by the end of 2026. 

With rates of 1% and 1.5%, a broad asset base, detailed anti-avoidance rules and the fact non-residents, trusts and private foundations will also be targeted, affected parties are encouraged to prepare early to determine whether the tax is applicable to them and the scope of their tax exposure. 

The introduction of a wealth tax was a central element of the Tisza Party’s election campaign, and the new government began preparing the measure shortly after taking office. 

Tax rates, base and filing timeline

The proposed tax would apply annually at 1% of net wealth above HUF 1 billion. The rate would increase to 1.5% for the portion exceeding HUF 100 billion. Net wealth would generally equal assets minus deductible debts. The bill is expected to come into force on 15 December 2026 with first tax returns due by 31 August 2027, based on assets held on 31 December 2026. 

Assets, individuals and entities within scope

Hungarian residents would potentially be taxed on their worldwide assets, including real estate, bank deposits, securities, corporate participations, options, crypto-assets, investment precious metals, insurance surrender values, artworks, collections, jewellery and vehicles over HUF 10 million.

Non-residents would be liable for Hungarian real estate, and related property rights, as well as participations in Hungarian companies and foreign companies holding Hungarian real- estate. 

Trusts and private foundations are to be treated as separate taxpayers and are also categorised as domestic or foreign, based on establishment jurisdiction as well as place of effective management. Existing structures also face a 30-day registration deadline after the new law comes into force.

Spouses would be taxed separately and could allocate jointly owned assets by agreement. The assets of minors would generally be counted with their parents. 

Valuation rules

The draft contains complex valuation rules for the various asset types.

Real estate: Hungarian real estate could be valued by reference to recent transactions, indexed historic prices, valuation based on a new public database or via an individual valuation. Slightly different rules apply to foreign property.

Corporate shareholdings: Similar to Swiss wealth-tax rules, unlisted corporate shareholdings would be valued under a formula based on the company’s equity and capitalised earnings, with specific adjustments for hidden reserves, minority interests, holding companies and newly established businesses. Listed and OTC traded securities will be valued based on the open market price.

Relief and treaty protection 

Hungarian double taxation treaties also covering wealth taxes may exempt particular assets, but the outcome will depend on the wording of the relevant treaty and the taxpayer’s circumstances. Certain Hungarian and comparable foreign taxes on taxable assets could be credited against the wealth tax liability. Mandatory valuation costs are also deductible, subject to a cap.

Recommended next steps

Although the final text of the legislation may change, taxpayers should start assessing their exposure now: the first return would be based on assets held on 31 December 2026. 

Express anti-avoidance rules are proposed to apply retroactively from 14 May 2026, increasing the importance of reviewing recent and planned asset transfers.

For analysis of your exposure, potential treaty protection, asset and business valuation rules and advice on next steps, contact your CMS client partner or the CMS experts who wrote this article. 

The article was co-authored by Botond Nagy.