Hungary's wealth tax looks through your foreign holdco

Hungary's wealth tax is described as a narrow tax on non-residents, and that description is wrong at the edge that matters most. The Finance Ministry draft, published for consultation on 6 October 2026, taxes a non-resident on Hungarian property, rights over it and stakes in Hungarian companies. It also reaches interests held through a foreign holding company that owns Hungarian real estate. Putting a holding company between the owner and the building does not take the building out of scope. For a property that is the holding company's only asset, the structure changes who is named on the return and little else.

One limit on all of this comes first. We have not read the draft or the bill in the original Hungarian, so we cannot give section numbers from either ourselves. The government submitted a bill to parliament on 27 October 2026. What follows rests on adviser summaries and Hungarian press reports, and the wording of the foreign-company test differs between them.

What the draft says about non-residents

The headline parameters are consistent across the sources. Net wealth above HUF 1 billion (Hungarian forint) is taxed at 1% on the taxable base up to HUF 100 billion and at 1.5% on the part above. The draft's planned entry into force is 15 December 2026. The first liability is measured on holdings at 31 December 2026, with the return and payment due by 31 August 2027. Public comments on the draft were due on 14 October 2026.

Residents are taxed on worldwide assets. KPMG describes non-residents as taxed only on Hungarian real estate and shares in Hungarian companies. Schoenherr adds related rights and interests held through foreign holding structures with exposure to Hungarian real estate. Andersen lists a third category: interests in companies holding Hungarian real estate. A non-resident may deduct only liabilities directly connected with acquiring, creating, maintaining or improving those taxable Hungarian assets.

Only one of the sources we read gives a number for the test. The report on imidaily.com lists, as a fourth category, stakes in foreign companies whose balance sheets are more than 75% Hungarian property. It also reports the ministry's stated aim: to stop owners taking Hungarian assets out of the tax by inserting a foreign company. Schoenherr, KPMG and Andersen describe the same reach without the figure. We could not confirm the figure against the draft's text.

Why the holdco does not help

The common reading is that a foreign holding company is a shield, because the owner holds shares in a Luxembourg or Cypriot company and not Hungarian land. Under the draft as reported, that shield works only if the company holds enough other assets to fall to 75% or below.

Take a non-resident individual who owns all of a foreign holding company. Its only asset is a Budapest building worth HUF 3 billion, bought with a HUF 1 billion loan. The individual has no other taxable Hungarian assets. Portfolio and Infostart report that the stake in a foreign real estate holding company is valued at the proportional value of its Hungarian real estate. In the 6 October draft, debt was ignored: the stake is HUF 3 billion, the base after the HUF 1 billion threshold is HUF 2 billion, and 1% gives HUF 20 million a year. In the 27 October bill, debts directly linked to acquiring the property are deducted first: HUF 2 billion, a base of HUF 1 billion, and HUF 10 million a year. Andersen's worked example shows the threshold operating as an allowance: net wealth of HUF 1.5 billion gives a base of HUF 500 million and tax of HUF 5 million. The loan changes the bill by half. The holding company changes it by nothing.

Now test the 75% rule that imidaily.com reports for the draft. Add HUF 1.1 billion of cash and securities to the same holding company. Hungarian property is HUF 3 billion of HUF 4.1 billion in assets, or 73.2%. On a plain asset-share test, the stake falls outside the look-through. At HUF 0.9 billion of other assets the share is 3 of 3.9, or 76.9%, and the stake is in scope. The sources do not say which values the test uses. Imidaily.com says "balance sheets", and book and market value differ widely for a property bought years ago. Hungarian real estate is valued under the draft by a fixed order: a qualifying transaction in the prior 12 months, an indexed sale up to ten years old, the tax authority's mass appraisal model, then an independent expert.

Padding a holding company with other assets is also risky. Andersen reports that the Hungarian tax authority, NAV (Nemzeti Adó- és Vámhivatal), may check whether rights were exercised for their intended purpose from the date the tax plan became public. The imidaily.com report puts the look-back start at 14 May 2026, when the government ordered the finance minister to prepare the tax. Taxpayers may have to show an economic reason for transfers and restructurings made since. A holding company topped up with liquid assets in November 2026 for no other reason could attract that scrutiny.

Where the structure still matters

The look-through does not erase every difference between owning directly and owning through a company. Three differences survive on the reporting.

First, the taxpayer is the individual, not the company. Portfolio reports that the taxpayers would be private individual owners and certain asset-holding entities such as trusts and private foundations, not the property companies. Schoenherr says trusts, private foundations and comparable foreign structures are taxed separately from their settlors and beneficiaries. Spouses are assessed separately, each with a threshold.

Second, valuation. Unlisted stakes are valued by a statutory weighted average of equity and capitalised earnings: one part equity to two parts earnings, divided by three. Andersen and imidaily.com report a 15% capitalisation rate on average after-tax profit over the last three completed years. Both also report minority discounts of 25% or 30%, depending on the size of the holding. A stake in a foreign real estate holding company is reported as valued on its Hungarian property rather than on the company, which suggests those earnings formulas and discounts do not apply to it. That is our reading of the reports, not a statement from the text.

Third, double counting. Portfolio ran a piece on 7 October 2026 under a headline saying that one disputed detail could in theory impose a multiple burden on some foreign real estate investors. The article is paywalled, and we read only its opening. It says the wording probably needs clarifying. It does not say what the rule is, and we cannot say more than that.

The window and the moving text

The planned entry into force is 15 December 2026, and the valuation date is 31 December 2026. A restructuring that changes the asset mix must happen, and must be defensible against the anti-abuse test, before that date.

The text is also moving. Pénzcentrum reported on 28 October 2026 that the government has submitted a final bill that differs from the autumn draft in 16 points. The HUF 1 billion threshold, the 1% and 1.5% rates and the 15 December 2026 date are unchanged. Portfolio and Infostart report that the draft valued a stake in a foreign real estate holding company at the proportional value of its Hungarian real estate, ignoring debt. Liabilities directly linked to acquiring, creating, maintaining or improving the property are now expressly deductible, and the reduced value is then multiplied by the ownership share. Portfolio cites section 18 of the bill for this, and section 12(9) of the draft. We have not checked the section numbers against the bill.

None of the three reports mentions a 75% test. Portfolio and Infostart do mention a 90% figure, but in the definition of a holding company, which now also counts securities, cash, own-use property and receivables from owned companies. That is a separate rule. We cannot say whether the 75% test survived unchanged, was reworded or was dropped. Anyone acting on the threshold needs the submitted bill's text, not the consultation draft or this note.

We found no report that parliament has passed the law as of 29 October 2026, and nothing here is tax advice. A structure with Hungarian property should be reviewed against the bill by a Hungarian tax adviser before 15 December 2026.