Hungary Unveils Wealth Tax Plan, Raising Burden on Ultra-Rich

Hungary will impose a wealth tax from next year, Prime Minister Peter Magyar said, fulfilling a election pledge to make the rich shoulder a larger share of public obligations.

A 1% levy will be applied on assets exceeding 1 billion forint ($3.1 million) while the tax rises to 1.5% above 100 billion forint, Magyar said in a Facebook video on Tuesday. The tax will come into force on Jan. 1, 2027, he said.

Magyar won a landslide election in April after railing against corruption under the 16-year rule of Viktor Orban, which saw a new class of politically-connected super-rich emerge, including Orban’s own family.

“There were a lot of newly minted billionaire compatriots who tried to lobby against the wealth,” Magyar said, adding that they were unsuccessful. “I suggest they pay the tax honorably.”

Wealth levy proposals are gaining ground on both sides of the Atlantic as politicians seek to boost funding and reduce inequality. California is weighing a billionaires’ tax and New York has floated several new levies. Swedish political parties have also been considering a wealth tax while in Norway that has led scores to move abroad to escape higher levies.

Read More: Hungary Plans Wealth Tax on Assets Exceeding $3.1 Million

In Hungary, the latest rich list from the local publication of Forbes had 28 Hungarians with an estimated wealth exceeding 100 billion forint. Lorinc Meszaros, Orban’s childhood friend who has wide-ranging interests in banking, energy, tourism, construction and agriculture, topped the list with assets valued at $5.5 billion.

The tax would be paid once a year based on a self-assessment filed by individuals, with only those with assets of more than a billion forint needing to file the paperwork by Aug. 31 of next year, based on asset valuations at the end of 2026.

Magyar didn’t say how much revenue the government intended to generate from the wealth tax. The levy will be part of next year’s highly anticipated budget draft, which is due to be published by Oct. 15 and which is seen as a litmus test of the government’s commitment to consolidate the budget.

Magyar has pledged to reduce the budget shortfall to 3% of gross domestic product by 2030 in order to meet euro criteria, including on debt and deficit, by the end of the decade, ahead of the eventual adoption of the common currency.