Addressing Budapest’s housing crisis: Proposal to restrict home purchases by non-EU nationals

Budapest’s leaders are taking bold steps to tackle the housing crisis, proposing a two-year ban on property purchases by non-EEA nationals and pushing for tax reforms to boost long-term rentals.

Addressing the housing crisis in Budapest

Világgazdaság reports that Budapest’s municipal leadership is set to propose a new housing policy aimed at addressing the housing crisis, with a vote expected next Wednesday. Ambrus Kiss, Director General of the Mayor’s Office, outlined key points of the plan during a background meeting. While the capital’s leadership supports the government’s efforts to tackle the housing crisis, they argue that the current measures are insufficient and require additional action. Gergely Karácsony, the city’s mayor, is presenting a ten-point programme seeking government support, which includes the regulation of short-term rentals like Airbnb.

Photo: Daily News Hungary ©

Supporting the rental market

The city is pushing for the government to expedite the implementation of these regulations and introduce tax reforms aimed at encouraging long-term housing. Proposed changes include increasing the tax burden on short-term rentals while reducing taxes for long-term rentals. Specifically, they suggest halving the tourism tax for rentals of more than one year and exempting income tax for housing rented out for more than three years. These measures are designed to motivate homeowners to place their properties on the rental market and alleviate the housing crisis.

Will non-EU nationals be banned from buying a house in Budapest?

Ambrus Kiss has proposed a significant measure to alleviate Budapest’s housing crisis, suggesting a two-year moratorium on property purchases by non-EEA nationals in the capital. This restriction would primarily affect buyers from outside the European Economic Area, including Chinese, Russian, and Arab nationals. The aim is to curb the trend of foreign investors purchasing apartments as assets, which often remain vacant, exacerbating the housing shortage. Kiss emphasised that similar regulations exist in other countries and are not considered discriminatory, highlighting the need to prioritise homes for residents over investments.

Photo: depositphotos.com

Further initiatives

Additionally, the city is urging the government to remove the requirement for parking spaces in new housing developments, arguing that this regulation hinders the adaptive reuse of buildings. This change would enable greater flexibility in repurposing spaces such as former schools into residential units, potentially increasing the housing supply and addressing the ongoing housing crisis in Budapest.

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