Hungary proposes a 1% annual wealth tax from 2027 on fortunes above one billion forints

Hungary's government proposed a wealth tax on 6 October 2026. Reuters, in copy republished by Internazionale, reported that Prime Minister Péter Magyar set the levy at 1% a year on net assets above 1 billion forints, about $3.08 million, with a higher rate of 1.5% on the portion above 100 billion forints, about $308 million. It is to take effect in January 2027. Bloomberg reported the same thresholds the same day. The base is wide: real estate, investments, company stakes and assets held outside Hungary, with loans deductible. The turn that makes this more than a tax announcement is its timing. The same government is waiting on a Council vote to release EUR 4.2 billion in suspended cohesion commitments, and is about to publish a 2027 budget and a euro-adoption timeline, with the 2026 deficit projected at 7.5% of GDP.

The design

The structure is a flat charge on net wealth above a threshold, not a one-off capital levy. Reuters reported that the 1% rate applies only to the part of a fortune above 1 billion forints and that the 1.5% rate applies only above 100 billion forints, so the marginal design limits the number of payers while concentrating the charge at the top. Loans are deductible from the base, which makes the tax a charge on equity rather than on gross assets, and which gives leveraged holdings a lower effective rate than unencumbered property.

Reuters reported that the proposals would be published on the government website for public consultation before going to parliament, where Magyar's Tisza party holds a large majority after the April election, and that the bill is expected to reach parliament in October alongside the 2027 state budget. Reuters also set out the scale of the fortunes involved by reference to the 2025 rich list: Lőrinc Mészáros, a childhood friend of Viktor Orbán, was first at 1.786 trillion forints, about $5.5 billion, and OTP Bank chairman Sándor Csányi second at 649.7 billion forints, about $2 billion. Both sit above the 100 billion forint line, in Mészáros's case by a wide margin.

The fiscal setting

Reuters reported a projected 2026 deficit of 7.5% of GDP, and that the government would present the 2027 budget and a timetable for euro adoption later in October. Those two things constrain each other. The Maastricht deficit reference value is 3% of GDP, so a government that intends to publish a euro timetable has to show a consolidation path, and a wealth tax on a few hundred payers is unlikely on its own to close a gap of that size. The published design does not state an expected yield, and no allowed source gave one, so the revenue effect is not established here.

The enforcement questions are the ones to watch rather than the headline rate. A base that includes company holdings and assets abroad requires annual valuation of unlisted stakes and information on foreign-held property. Hungary already has an asset-declaration regime for senior public officials, which the European Commission counted among the reforms behind its September proposal, but that covers office-holders, not private fortunes. Nothing in the material published on 6 October sets out the valuation method or the treatment of assets held through non-resident structures.

The Brussels ledger

The money the government is counting on moves under a separate instrument. Euronews reported that the Commission concluded on 23 September 2026 that Hungary had addressed the rule-of-law breaches identified in 2022 and proposed releasing EUR 4.2 billion in cohesion funding, together with full access to Erasmus+ and Horizon Europe for students and researchers at universities run by public interest trusts. Euronews reported that the General Affairs Council was expected to vote by qualified majority on 13 October, and that a further EUR 2.2 billion remained blocked over academic freedom, within a package von der Leyen and Magyar had set at EUR 16.4 billion in May. Al Jazeera reported on 29 May that the package comprised EUR 10 billion from the recovery fund, EUR 4.2 billion in cohesion funds and EUR 2.2 billion on completion of reforms.

The mechanism is narrow and worth stating precisely. Under Council Implementing Decision (EU) 2022/2506 of 15 December 2022, published on EUR-Lex, Article 2(1) suspended 55% of the budgetary commitments of three operational programmes once approved, and Article 2(2) barred new legal commitments with public interest trusts. A Council note of 2 October 2026, document 13880/26, records that the Budget Committee examined the Commission proposal on 24 September and 1 October and accepted it without changes, and invited the Permanent Representatives Committee to suggest that the Council adopt the decision as an A item at one of its forthcoming meetings. The finalised text, document 13568/26 of 6 October 2026, states that the conditions in Article 4 of Regulation (EU, Euratom) 2020/2092 are no longer fulfilled, lifts the Article 2 measures, repeals the 2022 decision, and takes effect on the day of its notification to Hungary.

What is not settled

Three things remain open. The bill has not been voted: the text goes to consultation first, and until it is tabled the thresholds and the deductions can move. The Council had not adopted the lifting decision within the period covered here; the text was finalised on 6 October and the vote was expected the following week. And the EUR 2.2 billion tied to academic freedom, and the further conditions Euronews reported on asylum, social inclusion and LGBTIQ+ protections, were still outstanding at the time of writing.

The wider context is the prosecution of the previous administration's networks, which overlaps with the group the tax would reach. Bloomberg reported on 16 July 2026 that Magyar said an investigation was under way into former foreign minister Péter Szijjártó's ties to Russia. The connection to the tax is not legal but political: a levy whose largest payers are the businessmen associated with the former governing party will be read in Hungary as part of that reckoning, which raises the probability that it survives parliament and lowers the probability that its valuation rules are generous.

Sources

• Reuters — Hungary government proposes wealth tax on ultra-rich (republished by Internazionale)
• Bloomberg — Hungary to Impose Wealth Tax on Billionaires Starting in 2027
• Council of the EU — document 13568/26, 6 October 2026, Council Implementing Decision lifting measures and repealing Implementing Decision (EU) 2022/2506
• Council of the EU — document 13880/26, 2 October 2026, I/A item note on the Commission proposal
• EUR-Lex — Council Implementing Decision (EU) 2022/2506 of 15 December 2022
• Euronews — Von der Leyen says Hungary 'strengthened rule of law', unlocks EUR 4.2bn in EU funding
• Al Jazeera — EU to release billions in frozen funds for Hungary amid Magyar reforms
• Bloomberg — Hungary Investigates Ex-Foreign Minister Szijjártó's Russia Links, Magyar Says