Global Employer Services News

A draft Hungarian Wealth Tax Act published in Hungary on 6 October 2026 would impose an annual tax of 1% to 1.5% on net wealth exceeding HUF 1 billion. The first valuation date would be 31 December 2026. Although aimed at high-net-worth individuals, the proposed tax would extend beyond Hungarian residents: nonresidents holding Hungarian property or companies, dual citizens living abroad, expatriates working in Hungary, and foreign trusts and foundations could fall within its scope.
 

Summary of Proposed Measures
Item	Rule
Taxpayers	Resident and nonresident individuals; resident and nonresident "wealth management taxpayers" (i.e., trusts, private foundations and similar foreign arrangements). Spouses would be taxed separately, with each spouse having a separate HUF 1 billion allowance.
Tax base	Net wealth (taxable assets less qualifying debts) above HUF 1 billion (approximately EUR 2.7 million), depending on exchange rates.
Rates	1% on the portion of the tax base up to HUF 100 billion and 1.5% on the excess.
Valuation date	31 December annually; the first valuation date would be 31 December 2026.
Return and payment	The tax would be self-assessed. The return would be filed electronically and payment would be due by 31 August of the following year.
Expected entry into force	15 December 2026

Residents: Tax on Worldwide Wealth

Hungarian resident individuals would be taxed on their worldwide assets, including real estate, company shares, financial assets and crypto-assets, less documented debts. Residence generally would follow the personal income tax rules, although the draft would extend residence to certain dual citizens and expatriates, as discussed below. Tax treaty relief would be available only where the treaty covers wealth or capital taxes. Each relevant treaty, therefore, should be reviewed individually.

A Hungarian dual citizen would be treated as resident and taxed on worldwide wealth — even without a Hungarian address or days spent in Hungary—unless the individual had lived abroad for at least 10 years. The rule could affect members of the Hungarian diaspora who acquired Hungarian citizenship in recent years and have not yet lived abroad for 10 years.

Nonresidents: Only Hungarian Assets Are Taxed

Nonresident individuals would be taxed only on four types of Hungarian assets:

1. Real estate in Hungary;
2. Rights over Hungarian real estate, such as usufruct;
3. Shares in any company incorporated in Hungary, whatever its activity; and
4. Shares in a foreign company more than 75% of whose assets consist of Hungarian real estate.

The third category — shares in a Hungarian company — is likely to be the most significant for foreign entrepreneurs. A nonresident who directly owns a Hungarian Kft. (limited liability company) or Zrt. (private company limited by shares) would fall within scope of the wealth tax if the value of the shares under the draft formula, together with any Hungarian property, exceeds HUF 1 billion. Because the formula can value a profitable company well above its book equity, owners should not rely on balance-sheet figures when determining whether they fall below the threshold.

Shares held through a foreign holding company appear to fall outside the scope of the tax unless the holding company is a real estate company, subject to the indirect-ownership provisions in the final legislation. Nonresidents would be able to deduct debts linked to a taxable Hungarian asset, such as a loan used to acquire Hungarian property.

Expatriates Living in Hungary

Expatriates who become Hungarian resident would be taxed on their worldwide wealth, not just their Hungarian assets. Under the income tax rules, residents include EEA nationals who spend at least 183 days in Hungary in a year and anyone whose only permanent home or centre of vital interests is in Hungary. The draft provides two exceptions:

• Five-year exemption for inbound assignees: Non-Hungarian citizens sent to Hungary by a foreign employer that is not registered in Hungary (i.e., individuals on assignment or secondment or supplied through an employment agency) would not be treated as resident for their first five years in Hungary. For assignees already in Hungary, the five-year period would begin 15 December 2026. Expatriates hired directly by a Hungarian employer would not benefit from this exception.
• Third-country permit holders: Holders of long-term residence permits would not be treated as resident in a year in which they spend fewer than 183 days in Hungary.

If Hungarian residence ends during the year, the tax year would end on the preceding day, and the individual’s worldwide wealth held on that day would be taxed.

Trusts and Foundations

Foreign trusts, private foundations, and similar arrangements would be separate taxpayers under the draft (wealth-management taxpayers). Two rules are particularly important:

• Registration. A structure holding any of the four types of Hungarian assets listed above would be required to register with the Hungarian tax authorities within 30 days after the Act enters into force. If the Act takes effect on 15 December 2026, the registration deadline would fall in mid-January 2027.
• Hungarian-resident settlors. If a settlor is Hungarian resident, the structure would be presumed to be managed in Hungary and therefore taxable on its worldwide assets, not only its Hungarian assets.

Practical Scenarios

The examples below assume the draft is enacted as published. In each case, tax arises only if net taxable wealth exceeds HUF 1 billion.
 

Situation	Status under the draft	What is taxed
German resident owns a Budapest office building directly	Nonresident	The building, less the loan used to purchase it
US resident directly owns 100% of a Hungarian Kft.	Nonresident	The Kft. shares, valued using the statutory formula
US resident owns the Kft. through a Dutch BV	Nonresident	No taxable assets under the draft, unless the BV is mainly a Hungarian real estate holding company.
Hungarian-Romanian dual citizen living in Romania for six years, no Hungarian address	Resident	Worldwide assets (treaty relief only if the treaty covers wealth taxes)
Same person, living abroad for 12 years	Nonresident	The four Hungarian asset types listed above
French national posted to Hungary by their French employer since 2014	Nonresident until 15 December 2031	Nonresident until 15 December 2031
Italian national hired locally, living in Budapest	Resident	Worldwide assets (treaty relief only if the treaty covers wealth taxes)
Liechtenstein foundation set up by a Hungarian resident	Presumed resident	Worldwide assets of the foundation.
Jersey trust with foreign settlor and beneficiaries holding Hungarian property	Nonresident structure	The Hungarian property

Steps to Take Now

The proposal still must complete the legislative process and may be amended. Nevertheless, potentially affected individuals, families and structures with links to Hungary should assess their exposure before the proposed 31 December 2026 valuation date. The review should address the following:

• Residence: Whether any family member holds Hungarian citizenship (and how long the individual has lived abroad) or is an expatriate living in Hungary, and whether the inbound-assignee or permit-holder exceptions apply.
• Hungarian assets: Which Hungarian real estate, real estate rights, and company shares are held directly, and their likely value under the draft valuation rules.
• Trusts and foundations: Whether any trust or foundation holds Hungarian assets and must register, and whether a Hungarian-resident settlor could make the structure taxable on its worldwide assets.

Malina Gabor    
BDO in Hungary