About this Episode
Hungary plans to introduce a wealth tax from 1 January 2027. Prime Minister Péter Magyar says net wealth above one billion forints, around €2.7 million, would generally be taxed at 1% annually. The government is considering a higher rate for fortunes above 500 billion forints, roughly €1.4 billion, with further details still to be announced.
The plan marks a significant change from Hungary’s previous tax approach under Viktor Orbán. Hungary has a flat personal income tax and a 9% corporate income tax rate, while the European Commission has criticised the tax system for lacking progressivity and doing little to address high wealth concentration. In 2022, the wealthiest 1% held around one-third of the country’s net personal wealth.
One concern surrounding wealth taxes is that wealthy taxpayers may move abroad. Research using Scandinavian data found that a one-percentage-point increase in wealth tax reduced the number of wealthy taxpayers by around 2%. However, the estimated wider economic effects were small, reducing investment by about 0.07% and employment by 0.02%.
The Hungarian government expects the new wealth tax to raise between 300 billion and 600 billion forints annually. Part of the revenue is intended to finance lower personal income taxes for people earning below the median wage, while the Tisza government has also announced plans for pension increases and expanded social support.
