Hungary Accelerates
New Investment Law 2026 —
What does it mean for you?
Hungary has unveiled a €3 billion investment incentive package targeting foreign capital in the real estate sector. This represents more than a standard pro-business initiative; it is a new legal framework specifically engineered for international investors.
1. Tax Relief — What Has Changed?
Exemption from Purchase Tax for 5 Years
Foreign investors purchasing residential properties (up to €200,000) are exempt from the 4% purchase tax. This exemption remains valid until the end of 2028.
Reduced Capital Gains Tax to 10%
For properties held for at least 5 years, the capital gains tax rate drops from 15% to 10%, generating savings of €5,000–€25,000 per transaction.
Deduction of Renovation Costs from Taxes
Renovation costs up to €50,000 can be fully deducted from taxable income, significantly enhancing net returns.
2. Accelerated Licensing Procedures
The new legislation introduces the following measures:
- Accelerated Building Permits: Processing time reduced from over a year to 30–60 days (previously up to 14 days in specific streamlined cases, now standardized).
- Fast Track for Foreigners: Property registration completed within 7 days, down from the previous 14–30 days.
- English Language: All permits are issued in English, eliminating the requirement for a Hungarian translator.
3. Joint Investments (Hungary–Israel)
Dedicated Track for Israelis
Hungary has launched a specialized track for economic partnerships between Israel and Hungary, featuring consulting groups, joint forums, and a direct government investment channel.
4. Impact on Real Estate Prices
Our Forecast: By 2027, we anticipate a 15-25% increase in demand within the local real estate market, particularly in residential sectors. While prices will rise in response, the increase is projected to remain moderate due to a concurrent surge in supply from new projects.
5. What Can Investors Do Now?
- Apply for Purchase Tax Exemption: Secure the discount while it remains valid (until the end of 2028).
- Capitalize on the Reduced Tax Rate: If you plan to hold the property for 5+ years, the tax reduction offers substantial value.
- Enter the Market Before Demand Surges: Following this announcement, prices are expected to rise. Entering the market now is the strategic choice.
6. Comparison: Before 2026 vs. After 2026
| Item | Before 2026 | With 2026 Law |
|---|---|---|
| Purchase Tax | 4% (exemption only for first property) | 0% up to €200K (until 2028) |
| Capital Gains Tax (5+ years) | 15% | 10% ✅ |
| Property Registration Time | 14–30 days | 7 days ✅ |
| Deduction of Renovation Costs | Maximum €5,000 | €50,000 ✅ |
7. What Does the Hungarian Government Say?
The Hungarian President and Parliament have declared: "Hungary's investment announcements are open to all international investors, regardless of origin, religion, or nationality."
The message is clear: to establish economic partners, boost tourism, and unlock new opportunities for foreign investors.
Summary — The Opportunity is Now
The new law represents the optimal strategy for the next two years for foreign investors in Hungary. With tax breaks, accelerated procedures, and credits, there is no reason to wait.
Frequently Asked Questions — 2026 Investment Law
Q: Does the law also apply to Israelis?
A: Yes — the law applies to all international investors, regardless of origin. Israelis can take advantage of the tax exemptions and benefits to the same extent as any EU citizen.
Q: How much tax do I actually save?
A: On an investment of €200,000, savings range from €4,000–€15,000 in taxes (depending on the property type and holding period). If held for 5+ years, the tax rate is reduced from 15% to 10%.
Q: When does the law come into effect?
A: The law comes into effect on January 1, 2026. Transactions concluded before this date do not benefit from the incentives, but it is still possible to apply for an exemption by March 31, 2026.
Want to know how the new law affects you?
Our team will explain all the benefits to you and assist with the application for tax exemption.
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