Finance Ministry: Focus on Tax Cuts and Support for Families and Businesses in New Bill.

The new bill would double tax preferences for families with children, extend the preferential VAT rate for home purchases, and phase out some taxes on businesses. The Finance Ministry stated that tax cuts, support for families and businesses, and streamlining the tax system with the aim of ensuring tax compliance are the focus of the government’s tax policy.

According to About Hungary, a tax bill submitted by the ministry to parliament on Wednesday aims to double tax preferences for families with children, extend the preferential VAT rate for home purchases, and phase out some taxes on businesses. The proposed legislation outlines a two-step increase in the tax preference for families with children. Starting July 1, 2025, the monthly tax preference would rise to HUF 15,000 for one child, HUF 30,000 for two children, and HUF 49,500 for three children and each additional child. By January 1, 2026, these figures would increase to HUF 20,000 for one child, HUF 40,000 for two children, and HUF 66,000 for three c
hildren and each additional child.

The bill also proposes an extension of the 5 percent preferential VAT rate on home purchases, which would now last for two more years until the end of 2030. Additionally, it would permit Hungarians to access their savings in pension funds for home purchases and renovations during the 2025 calendar year. Furthermore, the legislation would allow up to half of the balances on SZEP voucher card accounts to be used for home-related expenditures.

In an effort to reduce the tax burden on businesses, the bill suggests phasing out sectoral taxes on airlines, pharmaceutical companies, and telecommunications companies by the end of 2024. This move is intended to stimulate economic growth and encourage investment in these sectors.