Hungary is preparing to introduce an annual wealth tax, and the bill published in October 2026 goes further than many expected.
Beyond the headline threshold of HUF 1 billion, the proposal sets its own valuation rules for companies and real estate, brings trusts and foundations into scope and reaches non-residents with Hungarian assets. For international clients with a Hungarian connection, the statutory value of their assets could be considerably higher than they assume.
The rules are still at the proposal stage and may change before adoption. Here is what the draft currently provides.
At a glance
Threshold: only net wealth above HUF 1 billion would be taxable.
Rates: 1% on the first HUF 100 billion of the tax base and 1.5% above that.
Timing: the legislation would take effect on 15 December 2026. The first liability would be based on assets held as at 31 December 2026.
Compliance: self-assessment, with electronic filing and payment by 31 August 2027.
Who would be taxable?
Individuals. Hungarian residents would be taxed on their worldwide wealth. Hungarian citizenship, including dual citizenship, would in principle be enough to make an individual resident, even without a registered Hungarian address. The exception is where they can show that they have habitually lived abroad for at least ten years. Foreign nationals employed in Hungary could, subject to conditions, be exempt on their worldwide wealth for their first five years.
Non-residents. Non-residents would be taxed only on Hungarian assets: Hungarian real estate and related rights, interests in Hungarian companies, and interests in companies holding Hungarian real estate. Whether a double taxation treaty limits that liability would need to be checked case by case.
Trusts and foundations. Hungarian trusts and asset management foundations, and in limited cases similar foreign structures, would be separate taxpayers. Related structures with the same or connected settlors would share a single HUF 1 billion exemption, so splitting assets across several entities would not multiply it. A foreign structure would be presumed to be managed from Hungary if a settlor with decisive influence, or a beneficiary, is a Hungarian resident. Rebutting that presumption would require evidence that the substantive decisions are genuinely taken abroad.
How wealth would be valued
This is where the proposal is most demanding, and where the numbers may surprise.
Listed shares: the closing price on the last trading day. If it deviates by more than 10% from the 30-day volume-weighted average, the average would be used instead.
Unlisted shares (including most family businesses): a formula combining equity and earnings capacity. One-third of the company's equity is added to two-thirds of its capitalised earnings value, which is three-year average profit after tax divided by 15%. The total is then multiplied by the ownership percentage. Minority discounts of 25% (holdings of 33–50%) or 30% (holdings below 33%) would apply.
Hidden reserves: for companies with equity above HUF 500 million, unrealised gains on non-current assets would be added, net of deferred tax, and reviewed by an independent auditor. In practice, gains that have never been realised could increase the owners' tax.
Hungarian real estate: a recent transaction or official value, an indexed purchase price of up to ten years, the tax authority's valuation model or an expert appraisal. Properties worth HUF 500 million or more (excluding agricultural land) would need a registered judicial expert using at least two methods.
Foreign real estate: acquisition value plus documented capital expenditure, increased each year by 3% or by the local official price index, at the owner's choice.
Personal belongings and household items would generally be excluded. Art, collections and jewellery worth more than HUF 3 million, and vehicles worth more than HUF 10 million, would be included at their full value.
Compliance and anti-avoidance
Every asset would need a documented valuation in the return. Structures created after the law takes effect would have 30 days to register with the Hungarian tax authority (NAV). Unexplained reductions in the tax base could trigger an immediate audit. Local taxes, motor vehicle tax and half of mandatory expert fees (up to HUF 2 million) could be credited, and instalments or deferral could be requested in cases of liquidity pressure.
The most uncertain point is timing for anti-avoidance purposes. NAV could scrutinise arrangements made from the moment the tax became “public knowledge”, a date that is hard to pin down. Restructurings made in recent months could therefore be reviewed, and clear, contemporaneous evidence of genuine economic or family reasons would matter.
Why it matters across borders
The proposal reaches well beyond Hungarian residents. Dual citizens living abroad for less than ten years, foreign investors holding Hungarian property or company interests, and families using trusts or foundations with a Hungarian settlor or beneficiary could all be affected. A sensible first step is to map the assets concerned, apply the proposed valuation rules and plan how any liability would be funded, while the final text is still being settled.
For advice on how the proposed rules could apply in a specific situation, L&N’s member in Hungary, Pál Jalsovszky of Jalsovszky Law Firm, can help.
