Hungary’s wealth tax: liability, valuation and the budget timetable

What the committee amendment changes

Bill T/930 proposes an annual wealth tax. The Finance and Budget Committee submitted the 30-page, 58-point amendment T/930/2 on 11 November at 16:14. It remains a proposal: submission does not mean that individual changes or the entire bill have been enacted.

The principal decisions concern the higher-rate threshold, valuation of property and business holdings, deductible liabilities, taxpayer protection and expert responsibility, and the timing of the first tax year. Commencement can also affect the delivery of planned 2027 revenue.

Who would be liable?

The original bill taxes net wealth exceeding HUF 1 billion. Domestic-resident individuals and wealth-management taxpayers generally include domestic and overseas assets; non-residents include specified Hungarian assets. Applicable treaties require separate examination.

Wealth is different from annual income or a bank balance. Property, company holdings, financial instruments and rights can enter the calculation. Spouses are separate taxpayers; connected wealth-management structures share an allowance. The amendment must be read with the original provisions it leaves unchanged.

The allowance and tax bands

The original bill applies 1% to the first HUF 100 billion of the tax base and 1.5% above that. As the HUF 1 billion allowance has already been deducted, its higher rate applies to net wealth above HUF 101 billion. Point 8 lowers the tax-base threshold to HUF 99 billion, bringing net wealth above HUF 100 billion into the higher band.

Illustrations before further tax reductions: HUF 1.2 billion of properly valued wealth after deductible debts gives a HUF 200 million base and HUF 2 million annual tax. HUF 2 billion gives a HUF 1 billion base and HUF 10 million tax. At HUF 101 billion net wealth, the threshold change raises the original HUF 1 billion tax to HUF 1.005 billion, a HUF 5 million annual difference.

Points 9–12 prevent tax reductions from producing a negative tax liability. The credit for mandatory valuation remains 50% of the invoiced fee actually paid, capped at HUF 2 million; the same service fee can be used only once. Credits for paid foreign taxes on vehicle or property ownership and related rights are clarified; refundable tax is excluded.

Liabilities, shared property and wealth management

Point 3 adds outstanding instalments on an acquired asset to deductible liabilities. The debt must actually exist and be supported by a public instrument or a private instrument with full probative force. For a non-resident, it must also be directly connected to the taxable asset.

Deductible liabilities linked to jointly owned assets follow the allocation of those assets to the tax base. Other jointly owed spousal liabilities follow obligations to the creditor. When a wealth-management taxpayer ceases, same-calendar-year double taxation of distributed wealth can be reduced by the attributable tax base, limited to the value still remaining when the recipient’s tax liability arises.

Property valuation and compliance costs

The substantial-renovation threshold rises from 20% to 30% of transaction value. More cases could therefore retain indexed valuation and avoid mandatory expert costs. The tax authority would operate domestic indexation and mass-valuation calculators electronically and provide certified electronic records of the results.

Point 27 introduces two conditional simplifications. Where preceding valuation methods are unavailable, undeveloped arable land, meadow or pasture can use county and land-use-specific statistical average prices, limited to HUF 1 million per property or ownership share and HUF 5 million across all assets valued this way. This is valuation relief, not a tax exemption.

Where the preceding methods are unavailable, non-residential property can use comparable advertised asking prices without an expert up to HUF 20 million, with a proportionate ceiling for an ownership share. Relevant differences must be adjusted, and advertisements and calculations retained until the tax-assessment limitation period expires.

Expert valuation of Hungarian non-agricultural property reaching HUF 500 million requires a judicial property valuation expert; high-value property requires at least two methods. Valuations up to twelve months old are usable only without material subsequent changes. Point 27 contains inconsistent paragraph numbering which needs reconciliation in the consolidated proposal.

Overseas property and agricultural-land indices

For overseas property, taxpayers could no longer freely choose between an official price index and 3% annual indexation. The authority’s published official country and property-type index takes priority; 3% remains only where it is unavailable. Previous-year indices or their unavailability must be published by 1 March, with a calculator provided.

Point 57 broadens domestic agricultural-land indexation using national statistical land-price data, with grassland data for meadow and pasture. Missing reference data or a change in registered land use between acquisition and year end prevents indexation. Later publications or revisions do not alter that year’s valuation. This is separate from the county-average simplification for low-value land.

Business holdings and holding companies

Point 53 makes equity adjusted for hidden reserves the general rule. With equity of no more than HUF 500 million, the taxpayer can choose unadjusted equity. Related deferred tax reduces hidden reserves, which cannot be negative. Audit review is normally required, but can be omitted when underlying assets use calculated values under the Act.

A holding company preparing consolidated accounts cannot use the holding-specific equity-only valuation; consolidated figures must be used. Direct and indirect interests of close relatives are aggregated for minority-interest relief.

A newly established non-holding company can choose a zero income-based value in its founding financial year and the following two years. This option ends when equity exceeds HUF 500 million or available income-based value exceeds 25% of equity. Exactly 25% does not satisfy that latter exclusion.

The simplified valuation linked to equity of no more than HUF 100 million extends to organisations other than companies. Special employee-ownership programmes can use existing mandatory valuations for, or updated to, year end. Such a holding within a wealth-management taxpayer is counted only there. At an ownership-right holder’s request, the company must supply necessary information to the valuer within 30 days.

Usufruct, movables and financial assets

A property share subject to inherited usufruct is excluded from the owner’s tax base while that right exists, including rights created before commencement. The usufructuary’s liability is unaffected. Building-right valuation is treated separately, while the owner’s deduction cannot exceed the asset’s calculated value.

An insurance value for a movable asset must represent current market value; replacement cost alone is insufficient. Listed debt securities use available closing prices during the preceding twenty trading days; complete price unavailability triggers the fallback rule. A justified and documented expert market valuation can replace nominal value where nominal value does not represent the market.

Regularly traded company holdings require non-negligible trading volume on at least 60 days and annual traded volume reaching at least 10% of the average amount in circulation. The priority of an appropriate published or certified net asset value and fallback valuation rules for collective investment securities are also clarified.

Taxpayer protection and expert responsibility

Point 40 extends protection from tax penalties and late-payment surcharges to expert valuations of all asset types. The valuation must comply with the Act, information supplied must be complete and true, and there must be no misleading interference. Additional tax remains payable. A lawfully used mass-valuation result can be displaced only if the authority proves that false property parameters were supplied.

Data reconciliation allows 15 days. For an unavoidable external reason, an extension requested before expiry can be granted once for up to 30 days. Failure to comply, or an unresolved tax-base change of at least HUF 500 million after a statement, leads to a tax audit. The separate data-reconciliation default fine is not applied.

Expert registration extends across valuation fields and requires independence. Company valuers must separately meet the revenue condition in at least two of the preceding three years: valuation revenue must exceed HUF 125 million, or 25% of total revenue but at least HUF 25 million. An unlawfully prepared valuation below 70% of actual value incurs a HUF 100,000 fine. Three final such fines within 365 days lead to removal from the register; readmission can normally be requested after two years.

Allocating 5% of the tax

A 5% allocation to the National Cooperation Fund can be elected only in a return filed on time. A self-correction cannot subsequently add or withdraw the election. Transfers depend on tax actually paid in full, with separate adjustments for later increases and reductions. This distributes tax receipts rather than granting an additional taxpayer credit.

The 31-day rule and HUF 200 billion revenue plan

The explanatory tax-package breakdown in the 2027 budget bill plans HUF 200 billion in wealth-tax revenue. This is an estimate, not money collected. The original tax bill envisages 15 December commencement, a first year-end assessment in 2026 and filing and payment by 31 August 2027. Point 51 replaces fixed commencement with the 31st day following promulgation.

Calendar calculation gives 31 December commencement following promulgation on 30 November, or 1 January 2027 following promulgation on 1 December. The amendment does not separately rewrite every transitional date referring to 2026. The first tax year and payment date must therefore be established from the final consolidated and promulgated Act; a move of first payment to 2028 is not an already settled decision.

If final rules prevented the planned HUF 200 billion arriving during 2027, that would be an equally sized revenue deviation before other adjustments. It does not automatically imply the same final deficit increase: spending, other receipts, reserves and cash versus accrual accounting also matter. Asset ownership does not guarantee cash to pay the tax. Valuation capacity and preparation time affect collectability.

What remains to be decided and implemented?

The package combines substantive tax changes, relocation of existing rules, internal-reference corrections and language edits. Point 58 is a separate editorial-corrections package. Amendment votes, consolidated text, the final vote, promulgation and actual commencement remain separate stages.

Existing wealth-management taxpayers would have 30 days from commencement to register. Tax-authority calculators and registers, implementing regulations and guidance determine practical readiness. The budget plan must be reconsidered when the first tax year and payment deadline are final.