Major shift in Budapest: District council approves ban on short-term rentals, package for affordable housing adopted

The local council of Budapest’s District VI, in the city centre, voted on a short-term rental ban from 1 January 2026 at a meeting on Thursday.

In a statement, the local council said residents’ “peace at home” had trumped the decline in budget revenue the ban would entail.

In a referendum in September, around 54pc of the residents of the district voted for the homestay ban. The 20.5pc participation rate was “well over” that for similar votes, such as the 9pc rate for a city-wide survey of residents, the local council noted.

Economy minister discusses affordable housing measures with industry insiders

National Economy Minister Márton Nagy has met with representatives of the biggest property companies in the country and of the construction industry association EVOSZ to discuss government measures to ensure affordable housing, his ministry said on Thursday.

The sides weighed potential state programmes that could pump HUF 20bn-30bn into the local property market to support the development of affordable housing, rental properties and student dormitories, the ministry said.

Nagy said the government would consider a role for state-backed capital funds in supporting the endeavour to ensure affordable housing.

The matter of lowering the VAT rate on home rentals from 27pc to 5pc was also raised.

Nagy said the government was counting on industry players’ active participation in the construction of new homes and rental properties as well as the expansion of dormitory stock. He noted that ten of the 21 measures in the government’s recently unveiled New Economic Policy Action Plan aimed to ensure affordable housing.

Consultations on affordable housing will continue on a regular basis.

Budapest assembly adopts package to ensure affordable housing

The municipal assembly of Budapest adopted a package of proposals aimed at securing government assistance to the city’s housing programmes and to promote optimum use of the existing housing stock and other properties, late on Wednesday.

In his introduction to the package, Mayor Gergely Karácsony said the housing crisis in Budapest called for the initiatives of the city and its districts, targeted use of European Union funding, and a more active role by the central government.

Under the adopted package, the government is requested to publish without delay tenders for municipal housing programmes to be financed from EU structural funds.

The body has authorised the mayor to propose that the government should provide capital funding to municipalities as well as subsidised loans to increase the municipal rental stock. The package also aims to obtain funds from central coffers or EU funding to top up municipal subsidies for energy-saving home renovations.

The assembly expressed its approval of the government’s position that the practice of using flats in Budapest for tourism should be restricted, but suggested that the government’s two-year moratorium should be further shortened “to a legal minimum”.

Read also:

• Addressing Budapest’s housing crisis: Proposal to restrict home purchases by non-EU nationals
• New housing model proposed to address Budapest’s growing housing crisis

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