Hungary has tightened its construction rules, allowing authorities to suspend permitting procedures and block new construction or facility permits for at least six months if a project breaches environmental or nature protection requirements.
Hungary’s parliament has approved amendments to the country’s construction rules that significantly strengthen the consequences of environmental violations at major development projects.
Under the new framework, if authorities establish a breach of environmental or nature protection requirements, the relevant construction permitting procedure must be suspended. In addition, new construction or facility permits may be withheld until the unlawful situation is remedied — and for a minimum period of six months, according to Kormány.hu.
Prime Minister Péter Magyar presented the measure as a response to earlier cases in which major projects continued despite environmental concerns.
“We have seen the consequences in recent years when nothing happened after environmental rules were violated during a priority investment. We are putting an end to that now,” Magyar said in a video announcing the change.
The changes also affect major housing developments linked to the Otthon Start programme, where some priority projects may face temporary permitting restrictions while the government reshapes its wider housing construction policy.
Otthon Start projects also face new restrictions
The amendment specifically covers certain large-scale housing projects connected to the government’s fixed 3% Otthon Start housing loan programme.
Under the scheme, large housing projects can receive priority investment status if they meet specific conditions.
According to the government’s Otthon Start Programme Office, qualifying developments generally need to include at least 250 homes, with at least 70% of the units meeting the programme’s eligibility criteria. Priority status can significantly speed up administrative and permitting procedures.
The latest changes, however, introduce the possibility of temporarily halting permits even for projects that have already received priority status.
The government says this is necessary because some previously planned large-scale Otthon Start developments now need to be coordinated with a broader housing construction programme that is still being prepared. The amendment allows the government to set, by decree, a period during which authorities may not issue new permits for certain already-prioritised Otthon Start developments.
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This is potentially significant for developers because priority status was originally designed to speed up these projects. In practice, the new framework means that a fast-track development could still face a pause if environmental rules are breached or if the project needs to be brought into line with the government’s revised housing policy.
New rules for construction material exports
The parliamentary package also removes an earlier restriction on exports of construction materials.
Since 2021, companies planning to export certain building materials have been required to notify the Hungarian state in advance. The state also had a pre-emption right over the products concerned.
That system will now be abolished. Exporters will no longer have to file the same notification, and the state will lose its right to intervene in those transactions or purchase the materials before they are exported.
The change follows a ruling by the Court of Justice of the European Union, which found that the Hungarian mechanism restricted the free movement of goods and therefore conflicted with EU law. The European Commission subsequently launched infringement proceedings after the measure remained in force.
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